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China’s Domestic HC FeCr Prices Collapsed
Major stainless steel mills in Southern China, such as Tsingshan Group and Baosteel, kept a rollover of their high-carbon ferrochrome tender prices in November, which brought support for the domestic high-carbon ferrochrome prices; however, major stainless steel mills in Northern China, such as TISCO and JISCO, lowered their new tender prices in the month, which indicated that China’s domestic high-carbon ferrochrome prices failed to bottom out and continued to dip. In the meantime, despite the slipping prices, some ferroalloys producers started to produce high-carbon ferrochrome because some ferroalloys prices fell more significantly than high-carbon ferrochrome.
To the surprise of most people in the industry, TISCO lowered its tender price of high-carbon ferrochrome in December by RMB280/T Cr 50% basis at the end of November. What’s worse is that Tsingshan Group cut its tender price to the same as TISCO’s which is almost a decline of 10%. Most producers got lost after the new tender prices from the mills and stopped to quote and decided how to deal with this difficult situation.
Meanwhile, high-carbon ferrochrome producers started to reduce their outputs due to end of rainy season which will increased the power price. Adding the output in Northern China kept stable, China’s domestic supply of high-carbon ferrochrome would decrease.
South African Origin Chrome Ores Increased
South African origin chrome ores have been consumed more and more since the beginning of 2015, exceeding 70%, when the ferrochrome producers are trying to lower their production cost by using cheaper chrome ores, such as run of mine ores. Chrome ore prices have been sliding following the the high-carbon ferrochrome prices. Adding that most producers hold negative expectations about the ferrochrome prices, which makes them more cautious in purchasing chrome ores, and the chrome ore prices might keep weak in the coming months. On the other hand, the soaring imported ferrochrome would offset the imported chrome ores in some way.
Both the Imported Ferrochrome and Chrome Ores Declined
According to China Customs, China’s imported chrome ores and imported ferrochrome fell by 26% and 41% respectively over the previous month in October.
Outlook of China’s Chrome Market
The collapse of high-carbon ferrochrome prices in December surprised everybody in the industry, and some producers had plans to reduce their outputs accordingly. The sharp decline on the prices brought the producers a lot of heartache and they are figuring out ways to deal with the current situation. The high-carbon ferrochrome price might have bottomed out in the collapse and the prices are unlikely to slip in the first quarter of 2016.
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- [Editor:sunzhichao]
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