India: Ferro chrome prices on free fall amidst rising selling pressure

Indian ferro chrome prices have fallen sharply due to low demand from both fronts - domestic and export market. Since India is a net exporter of ferro chrome, declining demand from the exports is adding to the selling pressure on the ferro chrome producers. Indian producers have allotted more quantity in the domestic market, leading to oversupply and fall in prices.

Prices of ferro chrome are down-trending due to a confluence of factors as stated below:

• Lower ferro chrome prices in China restricting demand for Indian ferro chrome.
  
  
• Major producers are facing a severe liquidity crunch, due to persistent low ferro chrome demand.
  
  
• Chrome ore prices have fallen by around INR 2,000/t, which has prompted the producers to reduce offers to entice buying.
  
  
• Prices in the domestic market are governed by the Chinese tender prices from major stainless-steel mills, which is down by RMB 100/t for November deliveries.
  
  

Current Assessments:
Ferro chrome prices are assessed at INR 67,000/t Ex-Jajpur. However, few deals were also heard to be concluded at marginally lower prices. Meanwhile, the demand in the export market remains dull with near to absent deals in the spot market and prices unchanged for CNF China at around cents 68/lb, CNF Japan at cents 71/lb and CNF South Korea at cents 70/lb.

Future Outlook:
The dull demand from the exports market is not expected to improve anytime soon. Meanwhile, it is expected that the prices of ferro chrome could yet come down further as competition to destock among sellers intensifies.