Turkish Chrome Ore prices slashed by USD 15/dmtu CIF China

Chrome Ore prices in China declined by USD 5-10/dmtu with a sharp slip by USD 15/dmtu on Turkey origin concentrates. On the downstream sector, the retail price of low and ultra-low carbon Ferro Chrome falter through the bar of RMB10,000/60 basis per MT, ex-plant, cash tax inclusive, hitting lowest points over recent years, and plants run in loss across the board. As a result, when it comes to purchasing of chrome ore, plants will impose the pressure on spot ore traders and oversea suppliers that have the need to move shipments need to submit to the market by lowering prices. Due to the low cost-effectiveness, it is believed that there will be no notable improvement in Turkey concentrates in the short term, regardless of price compromise.

According to some chrome ore traders at Tianjin Port, the mainstream price of South African concentrate 40-42% is around RMB25.5/dmtu and RMB 25 is hard to find in recent days. Meanwhile, the price on South African ROM is no longer showing consistent compromise though actual transactional price did not go up. However, some traders that face capital strain and inventory pressure have gradually cleared out their stock. The majority of traders remained have no willingness to compromise easily and thus ore price is relatively firm.

On the other hand, the sluggish inquiries from downstream are also one of the factors leading to the calm response of the chrome market. Without active inquiries from alloy plants, ore traders thus have no incentive to offer proactively. At present, no matter low or high offers, traders just can’t meet alloy plants’ expectations with low offers being pressed to even lower level and high offer complained about no intention for sales. More often than not, alloy plants do not give clear price target so traders of chrome ore refrain from making offers, leaving the market in a deadlock where the price is relative firm.

Downstream alloy plant purchases are not active, and it is difficult for chrome ore traders to have the initiative to offer. At present, no matter whether the chrome ore merchants quote high prices or low prices, they cannot meet the taste of alloy factories. Low prices are suppressed even lower, and high prices are being complained that the miners have no sincerity. However, the alloy factory did not intend to give a clear inquiry price, so the chrome ore merchants simply did not make an offer, and the buyers and sellers were deadlocked. Instead, the chrome ore price could be relatively stable.

The chrome ore price remains stable regardless of the decline in alloy price is also owing to the already plummeted chrome ore price. For example, the price of RSA concentrate 40-42% has fallen to the historical low over the last three years and port traders basically face loss across the board due to the long term price decline. Though the price of future delivery also declined to various extents, still RSA material is in a paradox of low port price over oversea offers and ore profits of other origins are continuously narrowed. Therefore, though ore traders hold bearish outlook toward the later market, they are no longer willing to sell at the slashed prices considering the already low position of ores. Hence, the ore market is a clam.