Tsingshan raises June ferro-chrome tender price by $70 per tonne
China’s leading stainless steel producer, Tsingshan Group, has raised its ferro-chrome tender price for June delivery by 500 yuan ($70) per tonne month on month.
The move has come with the prices for chrome ore and imported charge chrome both surging on supply tightness created by the measures used to try to control the outbreak of Covid-19 in South Africa.
The mill, whose base is in Eastern China, has set its June high-carbon ferro-chrome tender price at 6,397 yuan ($900) per tonne for June deliveries, an increase of 500 yuan per tonne (8.5%) from the previous month’s tender price of 5,897 yuan per tonne.
The latest tender price has improved market sentiment, given that profit margins for ferro-chrome production were heavily squeezed by steady increases in the upstream chrome ore price, sources told Fastmarkets.
Fastmarkets’ chrome ore, South Africa UG2 concentrates index, basis 42%, cif China, was $155 per tonne on May 15. The index has jumped by $41 per tonne (36%) so far since South Africa imposed a Covid-19-related lockdown in late March.
“The higher tender could, to some extent, ease our burden from the increased production costs, which is the move they should have taken long ago,” a smelter said.
Other market participants told Fastmarkets that the reason behind Tsingshan’s generous offer lay in pressure to replenish its ferro-chrome inventories.
The mill procures 180,000 tonnes of high-carbon ferro-chrome every month, half of which is imported from South Africa, Zimbabwe and India, according to a source in the company.
“The recent supply interruptions caused by South African and Indian [Covid-19] lockdowns have left the mill no choice but to take in more material from the domestic market,” a second smelter said. “And no-one would care to offer if the prices were not satisfactory.”
Taiyuan Iron & Steel and Baosteel had not released their June tender prices at the time this story was published.