GLOBAL CHROME WRAP: European prices defy downtrend in Asia and USA
High carbon ferro-chrome prices strengthened in Europe on Friday April 28 amid firm underlying consumption by stainless steel mills; prices fell in all other global regions.
- European alloy prices edge higher on better consumer demand
- Chinese alloy prices drop ahead of anticipated lower tenders
- Japan and South Korea follow China lower amid thin trading
- US prices weaken as consumer demand dries up
- Chrome ore prices weaken in China
High carbon ferro-chrome prices in Europe rose to $1.30-1.44 per lb delivered from $1.27-1.42 per lb previously.
“We are operating at a high production capacity level, which gives us the possibility of increasing our steel prices a little bit in the near term,” a source at one stainless mill told Metal Bulletin.
Spot trading has been thin but buyers are being made to pay more when fresh offers are released, a ferro-chrome supplier source told Metal Bulletin.
“Generally, there is a low number of deals and only small volumes,” the supplier source said.
“However, the real price clearly being seen is around $1.36 per lb and upwards, traders buying small lots in the mid $1.30s per lb. Nobody is expecting new prices below $1.35 per lb from producers and traders, and the ones who bought below $1.30 per lb know they have been lucky,” he source added.
In China, prices fell due to weak demand from stainless steel mills and abundant ferro-chrome supply and while the market anticipated lower monthly ferro-chrome tender prices from domestic mills.
Metal Bulletin’s charge chrome index cif Shanghai dropped 3 cents to $1.12 per lb.
Metal Bulletin’s price quotation for spot Chinese domestic ferro-chrome dropped for the fifth consecutive week to 9,200-9,500 yuan ($1,332-1,390) per tonne on April 28 from 9,200-9,600 yuan on April 21.
The new price range is equal to $1.03-1.07 per lb on a cif basis in China.
In the absence of May bids from the mills, Metal Bulletin’s assessment for high carbon ferro-chrome on a contract basis held at 9,600-9,850 yuan per tonne, which is equal to $1.07-1.11 per lb cif.
“More Chinese stainless steel mills are announcing they will take maintenance or cut production in May. Market participants mostly attributed maintenance or lower production to very weak stainless steel demand,” a ferro-chrome trader said.
“Chinese domestic ferro-chrome producers’ operating rate has been high in April, given falling chrome ore prices and high chrome ore stocks,” the ferro-chrome trader added.
Market participants expect tender prices for May to drop below 9,000 yuan per tonne.
Chrome ore prices also slipped after Turkish and South African suppliers cut their offer prices due to easing demand from China.
Chrome ore inventory remains high in Chinese ports and Chinese ferro-chrome producers are holding sufficient stocks of the raw material, sources in China agreed.
Buyers and sellers have both been reluctant to price deals before tender prices are released by the mills, one ferro-chrome producer told Metal Bulletin.
Metal Bulletin’s assessment for Turkish lumpy chrome ore cfr China was at $355-375 per tonne on Friday, April 28.
Metal Bulletin’s chrome ore UG2 concentrates index cif China dropped almost 10% to $320 per tonne on Friday April 28.
Elsewhere in Asia, spot ferro-chrome prices weakened in Japan and rolled over in South Korea. Both markets recorded thin trading while market participants awaited the release of Chinese tender prices.
Metal Bulletin’s price quotation for spot high-carbon ferro-chrome cif Japan weakened to $1.13-1.2 per lb cif Japan on Thursday April 27 from $1.15-1.22 in the previous week.
“Most market participants are still waiting for Chinese mills tender prices this week. Due to the weaker market trend in China, I feel that the price is also moving down in Japan,” a trader in Tokyo told Metal Bulletin.
Small spot deals were reported at $1.13-1.15 per lb cif Japan while offers from traders came in at $1.18-1.2 per lb.
Metal Bulletin’s assessment for high carbon ferro-chrome cif South Korea held at $1.15-1.2 per lb cif South Korea on Thursday.
“South Korea market is quiet this week; no deals and no offers have been heard. Everyone is still waiting on the sidelines ahead of Chinese mills’ May tender price announcements,” one major trader said.
In the USA, prices weakened slightly, Very few consumers came into the spot market looking for material, sources told Metal Bulletin sister publication AMM.
“The last two weeks have been pretty quiet. There had previously been a rush, with traders and suppliers looking for material, but it has all died down,” a supplier source told AMM.
Spot prices for high carbon ferro-chrome fell to $1.41-$1.49 per lb in warehouse Pittsburgh on April 27 from $1.43-1.49 per lb previously, according to AMM’s latest assessment.
“We took a couple of inquiries from buyers this week but predominantly small truckload-size business,” a second supplier source said to AMM.
Still, tight supply has limited the scope for price falls, others pointed out.
“Overall demand is good and there still isn’t a lot of material around. This is keeping prices up despite the slow spot market.” a third supplier source told AMM.