India: Uncertainty grips ferro chrome market after bids surge in OMC's auction

• Tsingshan's tender prices increase by RMB 500/t ($70) m-o-m
  
  
• Bid premiums surge up to 83% in OMC's chrome ore auction
  
  

In comparison to the previous assessment on 13 March, Indian high-carbon ferro chrome (HC60%, Si:4%) prices decreased by INR 1,000/t ($12/t) w-o-w. Prices fell as most market players awaited the outcome of the OMC and Vedanta-FACOR auctions. Additionally, there was pushback from buyers as well.

Indian high-carbon ferro chrome (HC60%, Si:4%) were standing at INR 115,000/t ($1,384/t) exw-Jajpur on 20 March, according to BigMint's assessment. Around 2,800 t of trades were reported in the INR 113,000-117,000/t ($1,360-1,409/t) price range in the previous week.

Furthermore, prices of high-carbon low-silicon ferro chrome (HC60%, Si:2%) dropped by INR 4,000/t ($48/t) w-o-w, reaching INR 120,500/t ($1,451/t) exw-Jajpur on 21 March.

Weekly market overview

FACOR, OMC auctions shape industry direction: The results of the auction held by Vedanta-FACOR and OMC determined the direction of the domestic ferro chrome market.

The entire 57,700 t of material was sold out in the OMC's auction on 19 March with premiums ranging from 26-83% above the base price. This price increase was the result of limited supply and high demand. Higher grade ore also saw a m-o-m increase in bid prices of INR 6,439-7,371/t ($78-89/t). Therefore, we may see proposals from producers that are higher in the following days.

On the other side, the larger lot of 10-150 mm material fetched an H1 price of INR 112,600/t ($1,356/t) in the Vedanta-FACOR's ferro chrome auction on 20 March. Prices decreased m-o-m by INR 5,300/t ($64/t). Prices remained lower than the previous ongoing rates.

Since both auctions have now ended, the next few days may provide a clear picture of the market.

China's market, its impact on Indian market: Prices of ferro chrome (HC60%) rose by RMB 300/t ($42/t) w-o-w China, reaching RMB 9,150/t ($1,271/t) exw-Inner Mongolia. Additionally, Tsingshan's ferro chrome tender prices increased by RMB 500/t ($69/t) m-o-m to RMB 8,995/t ($1,249/t) DAP. As a result, Indian export prices have gone up, but there still remains a gap between domestic and Chinese prices.

According to a prominent ferro chrome manufacturer in India, "The fall in Indian prices may stop and stabilise with the release of Chinese tender prices. European benchmark prices will also get released for next quarter which we have kept eyes on."

Fall in Indian stainless steel prices: Prices of 304 grade stainless steel dropped by INR 2,000/t ($24/t) w-o-w, closing at INR 178,000/t ($2,143/t) exw-Mumbai. Prices were driven down by a decline in LME nickel costs and a slowdown in demand. Additionally, there have been reports of production cuts of approximately 35% and 30%, respectively, by two of the industry's leading manufacturers.

Outlook

As the auctions have just concluded, so the revised offers in the market are yet to be known. Market seems to be volatile right now and further developments will have to be seen in the coming days.