Chrome ore prices renegotiated by 13.7% in plummeting market

Agreed prices for South African chrome ore shipments have been reduced by as much as 13.7% in recent weeks as sharp price drops spark renegotiations.

Agreed prices for South African chrome ore shipments have been reduced by as much as 13.7% in recent weeks as sharp price drops spark renegotiations.

At least one cargo of South African UG2 chrome ore was renegotiated to $125 per tonne from an initial price of $145 per tonne, Metal Bulletin understands.

Metal Bulletin’s price quotation for UG2 fell to $128-138 per tonne, cif China on Friday October 30.

Previously, the price had dropped to $145-153 per tonne on September 18 and $140-148 per tonne on September 25.

By October 9, the price was already as low as $138-143 per tonne.

There have also been unconfirmed reports of suppliers dropping their prices to $120 per tonne.

“The prices requested in renegotiations have been $120-125. I talked to people who confirmed $125 per tonne and mentioned a range of $123-127 per tonne,” a market source told Metal Bulletin.

Metal Bulletin reported on November 4 that chrome ore buyers in China have been forcing late-stage price negotiations or walking away from cargoes as they struggle to open letters of credit (LCs) due to the sharp price drops.

Buyers have either failed or refused to open LCs to pay for material priced at levels that are no longer representative of the market, or have forced suppliers to agree to reduce agreed prices.

“We’re not selling that low yet, but we are expecting it to drop; UG2 producers are pushing the price down,” a trader told Metal Bulletin.

“Credit is an issue in China at the moment and it’s not limited to our sector. I am hearing stuff from base metals markets that demand is there but opening LCs is a problem. We are treading carefully,” the trader added.

The renegotiations are also affecting Turkish lumpy chrome ore (40-42% Cr), which dropped to $180-183 per tonne cif China on October 30, down from $188-193 previously.

Janie Davies
Twitter: @janiedavies_mb

What to read next
Following a six-week consultation period, Fastmarkets can confirm it will amend the calculation method for all the average functions on the Fastmarkets platform from Wednesday March 1, 2023.
Consolidation, the recycling of electric vehicle batteries, US steel exports and the benefits of sustainable steelmaking were key talking points at Fastmarkets’ Scrap & Steel 2023 conference in Dallas in January
Green shoots of increased demand will emerge in US ferrous markets courtesy of the Biden administration’s trillion-dollar infrastructure package in 2023, Schnitzer’s executive vice president and chief strategy officer Richard Peach said at Fastmarkets’ Steel and Scrap Conference 2023 in Dallas, Texas
US special bar quality steel prices rose in January in line with rising scrap and alloy costs, according to market participants
European metal industry association Eurometaux has called on the European Commission to follow the lead shown by the Inflation Reduction Act and deliver a “powerful” policy to support the industry in the EU while it tries to keep up with the move to a new generation of energy markets
The fallout from Russia’s invasion of Ukraine is changing global trade flows for bauxite, with Brazilian material once again flowing into China and with the introduction of export restrictions elsewhere likely to influence availability through 2023
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.