India: Indian Ferro chrome prices inch up on resurgence in Chinese demand

Indian ferro chrome prices are trending higher on healthy export demand. Sentiments have strengthened after the Chinese stainless steel mills hiked their purchase prices for January 2023.

As per SteelMint's assessment on 5 January, ferro chrome offers are hovering around INR 103,000-105,000/t exw-Jajpur. Around 2,000 t of deals have been concluded at these levels this week.

Market highlights

• Demand improves: Multiple inquiries from the domestic and international markets were sent to smelters. This week, Chinese buyers were more active since they wanted to order their material before the Lunar New Year holidays. Producers increased their prices as a result.
  Following the release of purchase tender prices of Chinese stainless steel mills, Indian buyers began reserving material. Smaller buyers, however, were waiting for FACOR's ferro chrome auction on 5 January. As a result, trading remained restricted this week.
  
  
• Low-phosphorus production improves: Most smelters produced low-phosphorus material for overseas buyers. So, availability of the standard grade with phosphorus level of 0.04% was limited. In addition, material was reserved for the international market with better realisations.
  
  
• High cost of raw material: Chrome ore prices were also on the higher side due to improved buying amid low inventory. Meanwhile, UG2 chrome ore was offered at $255/dmtu, while Turkish chrome ore was offered at $345/dmtu on CNF China basis. This also nudged ferro chrome buyers to hike their prices.
  
  
• Stainless steel prices rise: According to SteelMint assessment on 5 January, stainless steel prices rose by INR 2,000/t for 200 series HRC and CRC. The hike was effected by India's largest stainless steel producer on the back of increased demand.
  
  

Outlook
South Africa has announced power cuts for about 2-3 hours for households through to mid-2023. Market participants predict a power crisis in the South African ferro alloys industry if the load shedding continues. In the event of production reduction, disruption in supplies will be inevitable. As a result, more overseas interest will shift to Indian ferro chrome. So, ferro chrome prices may remain firm in the coming days.