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India: Ferrochrome prices under pressure on lack of buying interest

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Ferro Chrome
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21 Apr 2021, 20:12 IST
India: Ferrochrome prices under pressure on lack of buying interest

Indian ferrochrome scenario is faced with adverse market conditions as the spot overseas demand is very low and the domestic buyers are pushing for lower prices. Most market participants anticipate a further fall in ferrochrome prices and are waiting for the OMC auctions and next month's Chinese tender prices to be released.

Currently, ferrochrome prices are assessed at INR 89,000/t for Ex-Jajpur. However, export demand remains muted with almost nil spot inquiries from China, which is traditionally the biggest export market for Indian ferrochrome.

Key Highlights:

  • Stainless steel market remains bearish

Stainless steel smelters are wishing to hold back their procurements and not order large quantities as they anticipate a further fall in prices. Most of the buyers are waiting for the announcement of the Chinese tender prices and the OMC auctions results, in which both are expected to register a fall. SteelMint learned from sources that buyers are expecting prices to fall up to INR 86,000/t Ex-Jajpur.

  • OMC Auctions postponed to 23rd April

OMC delayed their chrome ore auctions by around a week as there was uncertainty over the base price calculations amidst increased royalty charges imposed. However, due to the delayed auctions, the dispatches were affected and the producers of ferrochrome are running out of chrome ore. Except for TSML and IMFA, who rely mostly on their captive mines, rest of the smelters are facing shortage of chrome ore.

  • Chinese ferrochrome prices falling

Domestic ferrochrome prices in China fell yet again by RMB 300/t w-o-w in Inner Mongolia. The buyers are insisting on lower prices and due to falling chrome ore prices from South Africa, the pressure on the Chinese producers is high. Meanwhile, due to the increased production of ferrochrome in the Southern provinces, the supply shortage in the country is mitigated.

  • Chinese demand for Indian ferrochrome fizzles out

Indian producers are more concerned about the dwindling Chinese demand, as China is the biggest buyer of Indian ferrochrome. They remain concerned as the lack of demand from China will create a situation of oversupply in the market. Meanwhile, Chinese spot prices are coming down every week, therefore the Chinese buyers continue to shy away from imports as by the time they get the ferrochrome, it is anticipated that prices would likely be further down.

 

21 Apr 2021, 20:12 IST

 

 

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