India: Supply constraints strengthen Indian ferro chrome market

Indian ferro chrome prices rose by INR 2,950/tonne (t) w-o-w due to supply-demand mismatch.

According to SteelMint's assessment on 25 May, Indian producers have started quoting at around INR 112,000-113,000/t exw-Jajpur. However, around 1,700 t of transactions have been concluded at around INR 111,000-112,000/t exw-Jajpur.

Factors strengthening ferro chrome prices

• Supply-demand mismatch: In anticipation of more price increases, some ferro chrome producers held back their offerings for the domestic market. One of the large smelters reduced production, which led to a shortage in the market. Additionally, as smelters boosted their supply to the export market, local supply also decreased.
  
  
• China's tender price supports Indian offers: This week, increased raw material costs and better market mood led to an increase in ferro chrome prices in China. The domestic price per tonne was between RMB 9,100-9,300/t (USD 1,286-1,314/t). Demand for ferro chrome has increased as a result of increased production of stainless steel. Future prices, however, will be determined by the stainless-steel industry's demand for ferro chrome. In addition, hike in purchase tender prices by Chinese stainless-steel giants also supported ferro chrome prices.
  
  
• UG2 chrome ore prices improve: UG2 chrome ore prices increased this week amid limited supply and good demand. Domestic prices in India had been rising because of high production costs. According to SteelMint's assessment on 22 May, UG2 chrome ore prices were hovering at around $300-310/dmtu CIF China.
  
  

Outlook
Increase in the prices of chrome ore as well Chinese stainless steel producers' purchase tenders by RMB 200/t m-o-m are expected to strengthen ferro chrome prices in the near future, sources informed.