Indian ferro chrome prices edge down on subdued demand

The Indian ferro chrome market remained chaotic, characterised by a variety of trade in the market. The transactions in the domestic market were varied and ranged from INR 119,000-129,000/t ex-works. Most of the buyers are strongly negotiating for lower prices and are succeeding to get material from the smaller suppliers. However, this has impacted the market and the domestic offers are down.

SteelMint considered the pool of trades of around 3,375 tonnes (t) and assessed the prices at INR 120,000/t ex-Jajpur, while the prices are expected to go down further on bearish market sentiments. Meanwhile, IDCOL tenders were concluded at INR 117,000/t exw today, as informed by market sources.

The exporters reported that the demand from China is muted, and they are resistant to procuring at even 118-120cents/lb, which is further adding selling pressure on the smelters. Exporters reported that the demand from European countries is strong but is not feasible with current freight rates and availability crisis. In addition to higher freight the export incentive was withdrawn, further discouraging the exporters. Meanwhile, South Korea, Japan, Taiwan, and Vietnam together have comparatively smaller requirements than China.

Chinese market muted
Although the production cuts still prevail in the Chinese market, the buying tendency is relatively low. Thus, the prices came down in the initial week but became stable thereafter. Meanwhile, the Chinese steel mills are more interested in the domestic market and are reluctant on importing material due to increasing container availability issues and delays in shipments. The buyers are not confident on the market as they believe that prices may fall further by the time the shipment reaches their units. Current transactional prices in Inner Mongolia, China are at around RMB 10,500/t exw. It is expected that the major steel mills in China would reduce their monthly ferro chrome tender prices in line with the reduced domestic prices.

Turkish chrome ore prices increase $30/t in two weeks
Chinese imported chrome ore prices increased by $30/t in a fortnight, due to increasing freight costs. The freight cost is substantially high and the unavailability of containers has led to this increase in the prices. The smelters remain cautious of buying higher-priced ore, as the prices of ferro chrome seem to have lost sheen. However, this increase in the prices of chrome ore might have a cascading effect and increase the prices of the alloy in China.

Indian market awaits Vedanta auctions
Post-IDCOL auctions today, major market participants are waiting for the Vedanta auctions. The auction is set for tomorrow viz, 20 Aug'21, and would receive attention from all the participants as that would measure buyers' interest in the market. Meanwhile, major buyers have procured enough quantities and have ample inventory, and hence are not desperate to buy and are booking small quantities, as per a major ferro chrome buyer.

Outlook
Major market participants believe that the prices would come down further on decreasing import sentiments of the Chinese buyers. The upcoming Chinese steel mills tenders are also expected to reduce in the coming week.