Ferro chrome prices

India: Ferro chrome prices continue to move north on supply concerns

Ferro chrome prices rose by INR 4,500/t amidst tightening supplies in the domestic market. The production volume has been gradually decreasing since the beginning of the year and more than 20% of the total volume remains absent from the market.

Two major producers of ferro chrome have shut down operations, while many have either reduced operations or shifted to manganese alloys due to unfeasible chrome ore prices and better profit margins for manganese alloys. Therefore, mostly those plants operating under conversion with Tata Steel and producers with captive ore sources are operating in the current scenario.

Currently, only a handful of producers are operating at full capacity and catering to the domestic market. Although activity in the exports market remains nearly absent, it had little or no impact on the Indian ferro chrome industry in the past two weeks amidst supply crunch in the market. Domestic demand also remains sluggish as most of the major buying has been concluded for the month, and producers expect demand to return after next week.

Prices are at around INR 101,500/t ($1,369/t), exw, while a few deals have reportedly happened at INR 103,000/t. Due to supply shortage in the market, many small buyers are in panic and are, therefore, not resisting higher offers. Major stainless steel mills, however, are delaying their procurements due to higher prices and sufficient inventories.
Indian smelters are mostly dependent on the Chinese market. However, the Chinese importers are uncertain about the market and are, therefore, refraining from imports from the spot market. Though the long-term contracts remain unaltered, the demand in the spot market is waning.

Meanwhile, the market awaits OMC’s announcement on base prices as well as Chinese stainless steel mills declaring their tender prices for HC ferro chrome for Jul’21 shipments. Currently, Chinese prices are at around RMB 8,000/t ($1,237/t), exw-Inner Mongolia, for HC ferrochrome 55%, higher by RMB 250/t w-o-w. Prices increased due to electricity shortages at central locations and soaring stainless steel prices in China.

In a nutshell, the prevailing sentiments among Indian ferro chrome smelters remain optimistic, while prices are expected to remain firm for now.

 

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