India: Weak Chinese sentiments weigh on ferro chrome prices

Indian ferro chrome (HC 60%) prices continued to decline this week. Prices decreased by INR 3,100/tonne (t) w-o-w due to sluggish demand on the back of a weak Chinese market.

According to SteelMint's assessment on 29 June, Indian ferro chrome prices stood at INR 106,000/t exw-Jajpur. Around 5,500 tonnes (t) of deals were concluded in the range of INR 105,000-108,000/t as producers were frantic to make bookings, fearing further price reduction.

Factors affecting prices

Chinese currency devaluation impacts demand: Given that China is one of India's top importers of ferro chrome, the Chinese market directly affects prices in India. The Chinese yuan's depreciation against the US dollar affected pricing of imported material. Indian exporters received lesser enquiries from China and most of them were in a lower price range of around 97-98 cents/lb. In light of the impending price decline, domestic purchasers are engaged in need-based procurement. Additionally, last week saw maintenance at two of China's stainless steel plants, which had an impact on the demand for ferro chrome.

Market participants also awaited new tender prices from Chinese stainless steel giant Tsingshan. However, its prices for July 2023 decreased by RMB 200/t, which further impacted Indian pricing and demand.

India's stainless steel prices fall w-o-w: This week, the stainless steel market in India saw weak demand, and producers decided to reduce production as rains disrupted trading activities. Prices of the 304 grade stainless steel fell by INR 1,000/t w-o-w to stand at INR 198,000/t exw as assessed by SteelMint on 27 June.

Reduction in European benchmark prices: European benchmark ferro chrome prices for the third quarter of calendar year 2023 (Q3CY23) fell by 12% q-o-q from 172 cents/lb to 151 cents/lb. Although, it is at a normal level for the European market, the Indian market has been impacted by this price drop.

Outlook

As the Chinese market might take some time to recover, prices are expected to continue to fall in the coming weeks.