India: Ferro chrome market stable ahead of chrome ore auctions

The Indian ferro chrome market is stable at present with a tepid buying tendency from the steel mills. Major stainless-steel producers have enough inventory and are trying to delay their procurements due to the higher prices. Meanwhile, sellers are firm with their prices and are resisting any corrections.

SteelMint recorded around 2,000 tonnes (t) of deals at INR 130,000/t ex-Jajpur, while few bulk deals also happened at INR 129,000/t ex-Jajpur. Some deals for China happened at cents 130/lb CNF China. Though the ex-plant realisation was lower than the domestic market’s, the sellers had no option but to sell as demand in the domestic market is confined to limited buyers.

Highlights of the week
Ferro chrome prices in China stabilise: Prices in the Chinese market fell at the start of the week due to limited buying. But they are now stable at around RMB 10,400-10,600/t ex-Inner Mongolia since downstream sentiments will not support further fall in prices. Production is still low in Inner Mongolia and producers are facing some bottlenecks. Most of the long-term contracts are yet to be executed and the spot market is solely dependent on the limited stock available with the traders. Thus, the supply tightness in the domestic market is further supporting the prices.

Indian buyers in wait-and-watch mode: With the increased prices, Indian steel mills are resisting purchases in higher quantities and only procuring hand-to-mouth. Meanwhile, demand from China picked up and the producers could book orders at a discounted rate of cents 130/lb CNF basis. There is an increased expectation that the prices may fall back soon on increasing selling pressure on the manufacturers, while sellers remain firm in their prices.

Market participants await OMC auctions: Major market participants are now waiting for the OMC auctions which might be scheduled in the next 10 days. Producers are expecting the miner to roll over the prices in line with falling demand from the domestic market. Buyers are interested in the auction as they apprehend further increase in the prices.