India: Ferro Chrome Producers under selling pressure amid downfall in global demand

Indian Ferro Chrome market is equally dependent on exports as the consumption of Ferro Chrome in the domestic market stands at only 50% of the total sales. With the global market on a downturn, producers in India remained under pressure to conclude deals in the domestic market. Transparency in the market is creating plentiful problems for the producers, as the traders and buyers are aggressively negotiating for lower prices, knowing very well that the global market is abstaining from procuring Ferro Chrome, and therefore the producers will be more dependent on the domestic market.

Prices of Chrome Ore raised marginally in the recent auctions on 26^th Oct'19 as the procurement of Chrome ore is still affected in the major producing areas. Although the Ferro Chrome prices were higher in the past month in line with the sudden rise in the prices of Chrome ore, the prices were not accepted in the market and the prices were put down. Currently, the domestic price for Ferro Chrome in India is assessed at around INR 67,000-68,000/MT. However, a few producers are concluding deals at prices below such levels also, as they are in urgent need of cash. Offers for CNF South Korea (10-50 mm, HC 60%) is at around 73 cents/lb, CNF Japan (10-50 mm, HC 60%) is at 74 cents/lb and for CNF China the prices are at around 70 cents/lb. Even though the prices for China came down, there is no demand, as the buyers were waiting for the Chinese purchase tenders.

Major Chinese steel mills have released their purchase prices for the November deliveries. Tsingshan rolled over their prices for November; meanwhile, Baosteel's high carbon Ferro Chrome purchase price is down by 100 yuan / 50 base tons, in November was 6,400 yuan / 50 base tons (including tax to factory price). Chrome Ore prices in the global market are also moving lower as there is adequate material at the Chinese ports. Low demand and falling prices of Ferro Chrome has also kept the Chinese producers at bay from procuring any further ores as oversupply is already affecting the price trend.

On the future outlook, the prices may go down, as the selles are highly competitive and the market remains buyer-oriented. Moreover, any positive trend can only be seen after the demand increases from China.