India: Ferro chrome prices edge up w-o-w, market eyes OMC auction outcome

• OMC raises base price by 3% for chrome ore auction
  
  
• Export bookings tighten Indian domestic supplies
  
  

Indian high-carbon ferro chrome (HC 60%, Si: 4%) prices edged up slightly by INR 700/t ($7/t) w-o-w to INR 122,900/t ($1,303/t) exw-Jajpur. Prices went up amid firm seller offers and regular trades. Last week, around 6,700 t of deals were reported to BigMint within a price bracket of INR 122,700-123,000/t ($1,301-1,304/t) exw.

Prices went up for low-silicon high-carbon and low-carbon ferro chrome (0.1% C) as well by INR 1,600/t ($17/t) and INR 1,000/t ($11/t) w-o-w to INR 128,000/t ($1,357/t) exw-Jajpur and INR 244,000/t ($2,586/t) exw-Durgapur, respectively.

Market summary (11-17 June)

Scarcity and exports support market: India's ferro chrome market witnessed a slight improvement in sentiment as limited domestic availability supported higher prices during the week. Key exporters had already pre-booked material for June shipments, while a few producers were manufacturing lower-grade ferro chrome (below 60% Cr), reducing the availability of standard-grade material in the domestic market. The combination of lower production and export-oriented supplies created mild scarcity, allowing sellers to maintain firm offers that were accepted in recent trades.

Market participants were also closely monitoring the outcome of the upcoming OMC chrome ore auction, scheduled for tomorrow, as it is expected to influence raw material costs. The auction volume has been reduced to 108,600 t, down by 23,200 t m-o-m, while base prices for ore grades above 40% have been increased by 3% (INR 730-938/t). With the monsoon season approaching and ore availability expected to tighten, many market participants anticipate further upside in chrome ore prices.

Cautious buying weighs on domestic stainless steel market: Indias stainless steel remained weak during the week as low demand and volatile nickel prices kept buyers cautious. Most consumers relied on existing stocks and purchased only as needed. Prices of 304-grade and 316-grade hot-rolled coils declined by around INR 2,000/t ($21/t) exw due to sluggish demand, while mills focused on clearing inventories through discounts and flexible deals. The longs market also stayed under pressure, with some suppliers offering discounts to attract buyers. Export activity remained slow because of weak overseas demand.

In China, the stainless steel market also remained subdued amid weak consumption and cautious buying, although some production cuts provided limited support. Looking ahead, the Indian stainless steel market is expected to remain soft, with prices likely to stay under pressure until downstream demand improves and raw material costs become more stable.

Rising inventories limit Chinas price recovery: China's domestic ferro chrome prices remained steady, with no major changes in key producing regions. However, overall market sentiment stayed weak due to falling chrome ore prices, record-high port inventories, and lower buying interest from steel mills. Chrome ore inventories crossed 4.4 mnt, increasing supply pressure and forcing some traders to sell at discounts.

Demand from the stainless steel sector also remained slow as several mills were under maintenance and buyers purchased only as needed. With high supply, weak downstream demand, and lower raw material costs, the ferro chrome market is expected to remain under pressure, with only limited chances of a price recovery in the near term.

Outlook

India's ferro chrome market is expected to remain firm in the coming week, supported by tight domestic availability and export commitments. However, weak stainless steel demand may limit significant price gains. Market participants are closely awaiting the outcome of the OMCs chrome ore auction, as higher base prices and lower auction volumes could influence raw material costs and set the near-term price direction for both chrome ore and ferro chrome.