Indian ferro chrome prices fall amid disparity in spot, tender prices in China

Indian ferro chrome prices have fallen on disparities in Chinese spot and tender prices.

Indian buyers were waiting to see which way Chinese prices headed after the market reopened post-the Golden Week holidays. Although prices from China are strengthening even after the holidays, supply is still tight. This is due to high electricity costs and production curtailment.

On the other hand, strict environment norms imposed on Chinese steel mills are impacting Chinese demand and in turn the Indian market.

In addition, Tsingshan, one of the leading Chinese stainless-steel producers, rolled over the purchase price of ferro chrome.

The gap between spot prices and tender prices is likely to create stability in the ferro chrome market.

Ferro chrome prices in India came down by INR 4,000/t w-o-w on 13 Oct'21 amid dull demand from the spot market as buyers are reluctant on booking the material at higher prices, pressurising producers to lower their offers.

Currently, Indian ferro chrome smelters are offering at INR 135,000/t exw-Jajpur. However, some of the leading producers dominated the domestic market, tracked by SteelMint, yesterday. Some are offering higher to maintain the parity with Chinese prices. On the other hand, domestic consumers are actively negotiating to book the material at INR 132,000/t exw-Jajpur.

Moreover, steep power costs have reduced production of ferro chrome in Europe. As a result, material shortage is leading to a hike in prices in the European market. Indian domestic prices are comparatively lower than local European offers. However, higher sea freight is deterring European buyers from buying Indian ferro chrome.

OMC chrome ore auction's base price up 22% m-o-m
Owing to the hike in prices of ferro chrome compared to last month, OMC has decided to raise its base prices across grades of chrome ore in the upcoming auction. This will support the prices of ferro chrome. However, muted export demand may create hurdles in raising prices of ferro chrome.

Outlook
Ferro chrome producers will resist lowering prices in line with higher raw material costs globally.