China’s Golden Week starting at the beginning of October slowed trading activity last week, with alloys seeing lower prices alongside a flat ore market and unchanged European high-carbon ferro-chrome prices, while the USA eased at the upper end of the price spread.
• Market seen quiet amid holiday
• Other Asian markets see drop in cargoes
• European prices hold despite quiet trading
• US assessment eases but support seen
Chinese market slow ahead of holiday
The Chinese ferro-chrome and chrome ore market were generally quiet ahead of China’s national Golden Week holiday (from October 2-8) amid a negative outlook. Alloy prices slipped, while the ore market remained steady.
Chinese domestic spot ferro-chrome prices were recorded at 8,100-8,400 yuan ($1,218-1,263) per tonne on Friday September 29, down from 8,300-8,500 yuan per tonne the week prior. A downward trend has developed during a weaker Chinese stainless steel sector, a key consumer of ferro-chrome.
China’s domestic stainless steel prices dropped further in the past week in line with world nickel prices, a key component of stainless steel production.
Metal Bulletin’s assessment of prices for benchmark 304 stainless cold rolled coil was 14,800-15,300 yuan per tonne, including VAT, in the Wuki market on Thursday September 28, down 600-700 yuan per tonne from a week before.
The London Metal Exchange cash nickel price hit $10,170 per tonne on Thursday September 28, down more than 16% from an annual peak of $12,140 per tonne at the start of the month. The market was at an annual low of $8,710 per tonne at the start of June this year.
Increased imports have also weighed on Chinese ferro-chrome prices. China imported 178,939 tonnes of ferro-chrome from South Africa in August, an increase of 147% from the previous month's imports from South Africa, according to Chinese customs data.
China imported a total of 258,896 tonnes of ferro-chrome in August, an increase of 51.98% month on month, and of 4.15% year on year. Chinese steelmakers are confident about near-term supplies of ferro-chrome from South Africa, where energy costs are lowering as the country moves out of winter.
“Charge chrome deals are scarce as buying interest has faded before the Chinese holiday,” a charge chrome trader said.
“The Chinese ferro-chrome market outlook is negative and prices should increase only as nickel prices rally in the Chinese holiday,” another charge chrome trader said.
“After major stainless steel mills released their lower tender prices for October, the chrome ore price also dropped,” a chrome ore trader said.
“Most miners offered UG2 at $220-230 per tonne, down from last week’s $240 per tonne," the same trader continued.
Metal Bulletin’s latest price quotation for contract prices of Chinese domestic high-carbon ferro-chrome (6-8% C, basis 50% Cr) were rolled over at 8,200-8,400 yuan per tonne on September 29, based on major Chinese stainless steel mills’ tender prices for October.
Major Chinese stainless steel mills’ October tender prices are 100 yuan lower than September tenders of 8,300-8,500 yuan per tonne. The latest contract price equals 95-97.5 cents.
Other Asian cargo levels drop
Ferro-chrome cargoes for delivery into Japan and South Korea have dipped in line with lower offers from several Northeast Asian trading houses.
Metal Bulletin’s Japanese ferro-chrome price, duty-unpaid was assessed at $1.03-1.06 per lb. The cif South Korea ferro-chrome price was also assessed at $1.03-1.06 per lb on Thursday.
A South Korean trader told Metal Bulletin that they had received at least three different offers from India for 100-200 tonne cargoes. The cargoes were slated for loading in October and destined for Busan.
“The best offer I received was $1.03 per lb cif Busan, while the highest offer was $1.08 [per lb cif Busan]," the trader said. "It is tough to make a decision...as we are waiting for the results of a tender in which we are involved."
A second South Korean trader said they had received two offers that were valid until the end of last week at $1.04-1.05 cif Busan for 100-200 tonnes. One ferro-chrome tender of undisclosed quantity, offered from a major South Korean supplier, was expected to close at the end of last week.
In Japan, several trading houses reported offers of Indian origin between $1.06-1.07 per lb cif Japan main ports. A 500-tonne cargo was reported to be offered at $1.0 per lb cif Japan, but was not accepted because the quality was said to be of lower specification.
“It is a difficult time to move spot cargoes in October because all of our customers are busy with the closing of their financial year. So from a buyer’s perspective, we are not urgently looking for material,” a Japanese trader said.
A second Japanese trader said that while they were not looking for spot cargoes, an acceptable spot price level was around $1.03 per lb cif Japan for October delivery. One Indian producer said he was willing to sell bulk lots of 100-200 tonne cargoes at $1.05-1.06 per lb.
European market consolidates gains
The European high-carbon ferro-chrome market has been steady in the past week, consolidating gains on a rally from mid-August through most of September. However, further increases are expected after a jump in the charge chrome benchmark for fourth-quarter deliveries, sources said.
One supplier said he has very limited supplies of high-carbon ferro-chrome for spot sales and is holding alloy in the coming months for customers with long-term delivery contracts only. His company will not accept any offer price below $1.50 per lb from potential buyers on a prompt basis.
Metal Bulletin’s latest price quotation for spot high-carbon ferro-chrome, delivered Europe was at $1.25-1.40 per lb on September 29. No deals were reported in high-carbon ferro-chrome, charge chrome, UG2 or Turkish chrome ore. The national holiday in China this week is reported to be influencing the lack of trading activity.
US spot market eases
The US high-carbon ferro-chrome market has eased in the past week, as suppliers knocked their offer prices down to encourage buying interest. Spot prices for US high-carbon ferro-chrome were reported at $1.42-1.45 per lb on September 28, dropping 5 cents on the top end from $1.42-1.50 per lb previously, according to Metal Bulletin sister publication AMM’s latest assessment. Spot market activity was reported to be slow.
Limited supply offers have supported a price floor just above $1.40 per lb, sources said.
“The big suppliers are not chasing any numbers below index levels, and if you are a trader who wants to buy you are going to have to pay, at least, that,” a supplier source said.
The recently reported fourth-quarter European ferro-chrome benchmark is expected to hold the market at current price levels.
The European charge chrome benchmark was settled at $1.39 per lb for deliveries in the fourth quarter this year after negotiations between South African suppliers and consumers in the stainless steel sector in Europe.
“The [spot] price didn’t move when the benchmark dropped to $1.10 [per lb] so I am not sure if it will have an impact on the way back up,” a second supplier source said. “Overseas numbers will be supported, which should allow the producers to hold prices, at least, at current levels.”