Indian ferro chrome prices climb on rising inquiries

Indian ferro chrome prices rose sharply by INR 3,900/tonne (t) w-o-w due to rising inquiries from domestic and Chinese markets.

According to SteelMint's assessment on 17 Feb'22, the current market prices are hovering at around INR 109,000/t exw-Jajpur.

Factors supporting ferro chrome prices -

• Export inquires pick up: The ferro chrome market is receiving inquiries from exporters. Chinese buyers have stepped up their purchases after the Winter Olympics. Market participants anticipate that China's government will remove production curbs after March. Therefore, demand is expected to increase further over the next few months. However, buying was limited ahead of the release of March tender prices, preventing any further price hikes.
  
  
• Domestic buyers wait for Vedanta auction: Indian buyers anticipated that prices would drop after the Vedanta auction. However, Vedanta's ferro chrome auction was well received with active participation seen. It is likely that this will further support ferro chrome prices, as the auction closed at bid prices almost similar to the prevailing market prices. SteelMint recorded around 2,000 t of ferro chrome transactions in the domestic market.
  
  
• UG2 chrome ore prices rise: South African UG2 chrome ore prices (40-42%) increased significantly due to improved buying and limited supplies in China. UG2 ore is currently being traded at around $210-220/t CNF China. Meanwhile, Turkish chrome ore prices have also increased to match the UG2 offers. This increased ferro chrome prices due to higher costs of production.
  
  
• Higher freight costs: The Russia-Ukraine war is impacting the overseas supply, resulting in a hike in freight costs and delay in supplies which supported ferro chrome prices.
  
  

Outlook
Indian producers are optimistic amidst the bearish ferro chrome market trend. They are anticipating a further hike up to INR 115,000/t exw-Jajpur in the near term amid rising inquiries.