India: Ferrochrome prices fall after Chinese stainless mills release tender prices

Indian ferrochrome prices went down after Chinese ferrochrome tender prices were released. Meanwhile, producers were under pressure in the domestic market for the past few weeks as Chinese buying dried off. Thus, buyers in the domestic market remained wary of procuring much material.

Currently, the prices are hovering at around INR 85,000/t Ex-Jajpur. However, not many deals were recorded this week. Meanwhile, the export demand remained muted, discouraging the domestic smelters.

Key highlights of the week

Chinese ferrochrome tender prices dropped by $162/t
At the start of the week, Baosteel sharply reduced its purchase price of HC ferrochrome for May '21 by 1,050 yuan/t ($162/t) m-o-m to RMB 7,495/t ($1,155/t) for HC 50% min, delivered including tax. Although, the Chinese prices remained down trended earlier but after the release of the tender prices, spot market fell further by around RMB 200-300/t and is currently at around RMB 7,300-7,500/t in Inner Mongolia.

Fall in the UG2 price comes to a halt
Although the price of ferrochrome in the Chinese market was slashed early in the week, South African miners choose to remain firm at their prices. The main reason behind this is the increased demand for chrome ore and improved buying tendency from China. Although the production of ferrochrome was earlier affected by the dual-energy control policy in Inner Mongolia, the production of ferrochrome was significantly higher in the Southern provinces and thus the increased demand was bound to come. Currently, prices of UG2 are at $150/t CNF China.

Indian offers remain scattered
Indian ferrochrome offers remain scattered as the producers with better financial records believe that there are chances that the market might bounce back by end-May. Thus, they are holding inventories till the market bounces back. Meanwhile, some sellers who are facing liquidity crunch are wishing to sell out the inventory and are offering at lower levels as well. Currently, the offers are at around INR 85,000/t, but a bulk deal was also concluded at INR 84,000/t, as per market sources.

Indian Stainless-steel producers are in wait and watch mode
Indian Stainless-steel producers are aggressive in negotiations, as they are firm that after the Chinese tender prices, Indian producers would have to reduce their prices. Meanwhile, the confidence is also strong as the Chinese inquiries have dried off. They expect the Indian prices to come down to INR 80,000/t by mid-May.