ORES & ALLOYS BLOG: Learning from ferro-chrome spot price volatility when trying to predict the benchmark

The 6.7% reduction in the European quarterly ferro-chrome benchmark – compared with early predictions of as much as 12% – reflects a notable tightening of ferro-chrome supply towards the end of the first quarter.

The second-quarter settlement came out at $1.54 per lb, down from $1.65 per lb in the first quarter. In the weeks leading up to ferro-chrome benchmark negotiations and announcements – often as early as half way through the quarter – there is always a period of forecasting among market participants, analysts and price reporting agencies. This round was no different in that respect. Metal Bulletin’s European ferro-chrome benchmark indicator had predicted a reduction of 17 cents per lb in early March, roughly in line with estimates by Metal Bulletin Research, and most market participants polled by Metal Bulletin estimated a 15-20 cent drop. But what was different this time was that the general consensus – based on market sentiment – was further out than normal. With hindsight, this is no surprise based on the way the first-quarter settlement shocked the market when it was announced in...

Published

Janie Davies

March 17, 2017

16:10 GMT

London