Prices of Ferrochrome Raise Rationally in China

Ferro-alloys.com : Baosteel releases FeCr tender price for July at RMB7,000, Cr50 basis, buying 15,000MT.

A. Release of FeCr Tender Prices for July: A Compromise of Two Sides by Suppliers and Buyers
Baosteel releases FeCr tender price for July at RMB7,000, Cr50 basis, buying 15,000MT. POSCO in Zhangjiagang,China purchases FeCr at RMB7,300, Cr50 basis. Tsingshan's FeCr tender price for July is same with Baosteel. Baosteel's purchasing price rises RMB 1,500, Cr50 basis, compared with June. Tender price of HBIS is RMB8,050 of June, purchasing 1,500MT, an increase of RMB 1,650 with June. Masteel releases lowcarbon ferrochrome tender price at RMB14,400, Cr60 basis, purchasing 720MT. Currently, TISCO has not released HC FeCr tender prices in July.

B. Suppliers Cut Production to Stiffen the Price
After TISCO, Tsing Shan Steel , and Baosteel released tender price for June at RMB 5,300 and RMB 5,500, Cr 50 basis respectively, FeCr producers suffered heavy lost in China. Hence, they cut production one after another to stiffen prices. With the reduction of FeCr production, retail price of FeCr rose to RMB 7,300, Cr50 basis in the end of June. With the increase of FeCr prices, South Africa chrome ore Cr40/42 price goes up from USD 130 per tonne, to USD 170 per tonne. The offer price of spot chrome ore is up to RMB 38 per dmt, with the previous price at RMB 30 per dmt. The price of chrome ore and FeCr goes up one after another. Hence, stainless steel purchase FeCr at the price, which two sides agreed with.
 

Baosteel's FeCr tender price has boosted the confidence of those who are involved in the FeCr markets. They hold a positive view over the future markets. From the steel's view, they aim to stabilize the market. However, it should be noted that markets of chrome ore and FeCr cannot keep stable in the short-term. Though the price of FeCr raises RMB1,500, it cannot catch up the amount of increase of chrome ore. FeCr producers will make no profit. Some FeCr producers are worried about the future markets, and it is unclear whether they will enter the market.
 
C. Active Chrome Ore Market: it needs time to consume the huge amount of chrome ore
Now, there are more and more offers of future SA chrome ore. Spot chrome ore markets condition cannot compete with the future chrome ore market. Spot chrome ore at Tianjin port is difficult to make a deal at higher prices. 40/42 SA chrome ore are waiting for clinching a deal. The conclusion prices are between RMB32 dmt to RMB 34dmt. There are more offers of future SA chrome ore and high grade chrome ore. The decrease of the chrome ore prices depends on the main chrome ore suppliers marketing strategy. It is surprised that the price goes up fastly and easily but it does not confirm to the law of market to some degree.

D. Prices of Stainless Steel Remain Increasing, promoting FeCr price inflation
Now, prices of stainless steel continue to rise, with an increase amount of inquiry.
Guided-price of Lianzhong 201 cold rolling is RMB 8,900 per tonne. Chengde's guided price is at RMB8,750-8,800 per tonne. Hot rolling is increased by RMB 100 per tonne, which is RMB 8,300 per tonne. As for 430 series,  it is at RMB 8,150-8,250 per tonne, increased by RMB 50 per tonne. There are no sufficient supplies of stainless steel. Only some thin plate are adequately provided and the conclusion price is comparatively low.
 
View of Ferro-alloys.com：Chrome Markets Remain Unsettled
The  ups and downs of chrome ore prices stir FeCr markets, making each side involved nervous. But it brings more chances for speculators. The plunge of chrome ore, attracting huge amounts of funds. Some speculators buy chrome ore at reasonable price, preventing the further fall of chrome ore market. It is also out of expectation of chrome ore practitioners. Those who suffer a loss are into frenzy.
Speculators  gain more profits. The rise for this period is driven by funds from other industries. When these speculators sell off chrome ore, offerees will face new challenges in the market, which the price will go up or they stock the chrome ore, waiting for prices inflation again.

All in all, chrome ore markets cannot be regarded as stable now. The correction has no time to consolidate in the bottom, and the jump of chrome ore prices face the risks of falling again.

• [Editor:Zhao Xiaobo]