Markets were buoyed by a tightening in supply, as well
as a less dramatic decline in the European
than some had expected.
The European charge and high-carbon ferro-chrome benchmark
price dropped 11 cents to $1.54 per lb for the second quarter
The settlement was announced to the Johannesburg Stock Exchange
on Wednesday March 15 by leading South African ferro-chrome
producer Merafe Resources, which operates a joint venture
ferro-chrome project with Glencore.
At the start of March, most market participants polled by Metal
Bulletin said they expected a 10-15 cent reduction in the
benchmark price, reflecting the decline in global spot prices
since the first quarter price soared 55 cents to $1.65 per lb.
The 6.7% reduction in the benchmark – compared with
early predictions of as much as 12% – reflects a notable tightening of ferro-chrome
towards the end of the first quarter.
Metal Bulletin’s ferro-chrome benchmark indicator
predicted a second quarter price of $1.48 per lb on March 10,
up from $1.47 on March 3, when the prediction dropped from an
initial $1.50 per lb, based on the newest available data.
Using the new data available when the second-quarter settlement
was reported, the Metal Bulletin index team analysed the reasons
for the disparity
As Metal Bulletin stated since the Indicator was launched, the
Indicator’s algorithms improve automatically from
its errors. You can find out more about the disparity and how
the index adapts, here.
Chinese prices flat
Chinese domestic ferro-chrome prices, meanwhile, held firm
ahead of new tender prices.
Producers were mostly unwilling to sell last week, as they
anticipated higher tender prices.
Contract prices for Chinese domestic
with 6-8% carbon, and 50% chrome,
delivered duty paid, remained stable week-on-week at
9,300-9,595 yuan ($1,348-1,391) per tonne on Friday March 17.
Market participants were expecting major Chinese stainless
steel mills to request cargoes this week. Tender prices are
very likely to be released next week, sources said.
Spot prices for Chinese domestic high-carbon
, delivered duty paid, were unchanged
week-on-week at 9,700-10,300 yuan per tonne.
There were limited Chinese ferro-chrome imports last week, with
cargoes offered sporadically. Chinese sources said Indian
cargoes had been sold at 110 cents per lb.
Some Zimbabwean cargoes were heard offered at 110 cents per lb,
but no South African cargoes prices were heard in China.
Metal Bulletin’s charge chrome
index, cif Shanghai
, which tracks South African imports to
China, held at $1.14 per lb, also on Friday.
Strength in Asia
Ferro-chrome prices in Japan and South Korea, meanwhile, both
increased last week as Indian suppliers further raised offers
on rising prices in China. Metal Bulletin assessed cif Japan 60% chrome
at $1.16-1.20 per lb on Friday, up from
$1.15-1.19 a week earlier. South Korean numbers
inched up to
$1.11-1.15 from $1.09-1.12 a week earlier.
Indian sellers also confirmed that they concluded deals to
China at $1.10 per lb cif China, and have subsequently raised
their offers to $1.15 per lb. This week, they also sold cargoes
to Europe at $1.10 per lb fob Indian.
"Offers are all going up this week. There’s no
offer cheaper than $1.10 [per lb cif South Korea] now. The
normal offer level is $1.13-1.15 [per lb cif South Korea]," a
major trader said in Seoul.
A second trader echoed these sentiments, but had managed to
purchase a small volume of cargo at $1.11 cif South Korea on
There were no major tenders in South Korea last week, although
there was talk that Posco may soon start its next quarter
Similarly, activity in Japan was limited, as most buyers in the
region thought the current offers were too high to accept.
Offers reported by traders were in a range of $1.17-1.21 per lb
cif Japan this week. One deal of about 500 tonnes was concluded
at about $1.16-1.17 per lb cif Japan.
"The price is going up, but the increase is very small and the
market is not active. Only very small deals can be heard in the
market now," one major trader said in Tokyo.
US numbers still firm
The US high-carbon ferro-chrome market also maintained strength
last week, despite a similar lack of significant spot market
Spot prices for US high-carbon ferro-chrome edged up to
$1.40-1.49 per lb on March 16, up marginally on the high end
from $1.40-1.48 per lb previously.
Although spot market activity has been lacklustre, prices have
been able to remain firm.
"The market is still rather quiet on the spot, but the fact is
they don’t need material because they are well
covered on contracts," a supplier source told Metal Bulletin
sister title AMM. "Contract business continues to stay
Improved production activity at steel mills has led to
increased consumption, effectively tightening the market to
"Demand and production coming out of the mills continue to stay
quite steady and if anything, it is bumping up a bit," a second
supplier source told AMM.
"Shipments and releases are tending to be slightly higher than
February shipments. They are looking anywhere between 5% and
10% higher right now," he added.
While mills continue to consume material at increasingly
healthy rates, a consolidated supply has similarly provided
support for pricing.
"There is not much material available sitting in the USA, and I
don’t think traders will bring material in right
now," a third supplier source explained. "With numbers firming
up overseas, and spot market activity limited, there is very
little incentive for traders to bring in material.
"Pricing should hold very firm, unless we see more cheap or
lower grade imports flood the market," a fourth supplier
agreed. "But I think because of limited spot demand no one will
bring a significant tonnage."
The supply consolidation has allowed a price floor to emerge in
recent weeks, as market participants have refrained from
dipping below the $1.40 per lb mark on spot transactions.
"The market has a clear floor right now. No one is selling
below $1.40 [per lb]," the first supplier explained.
"I don’t see anyone offering below $1.40 [per
lb]," the fourth supplier source agreed.
Despite the recent settlement of the higher-than-expected
European ferro-chrome benchmark price for the second quarter,
market participants did not expect much of an effect on pricing
in the US market.
"It is too soon to tell what kind of an impact the new
benchmark will have, but not much I assume," the fourth
supplier source told AMM.
"I think that the benchmark is already priced in to the current
market levels. It shouldn’t be much of a market
mover," the third supplier source added.
European high-carbon numbers
European high-carbon numbers
last week, after climbing a week earlier. High-carbon
ferro-chrome held in the wide range of $1.27-1.42 per lb, and
material changed hands in an even wider range.
European tender sales are understood to have taken place at the
low end of the range, while a buyer confirmed purchasing just
below this level.
"We have seen an auction result of $1.285 per lb Cr for 75
tonnes of 65% chrome […] in Germany," one market source
in Europe said.
However, large volumes of good grade material also changed
hands at the upper end of the range and above. While trade was
light, sellers were considering raising prices in the week
"It’s a dry trade. I’m going to
increase bottom prices in the coming week, basis this
week’s performance," one seller said on Friday.
High-carbon price strength has lagged in comparison to
low-carbon prices, according to a trader, who noted that demand
for low-carbon was still soaring last week.
Low-carbon ferro-chrome is assessed on a fortnightly basis by
Metal Bulletin, so no new assessment took place on Friday. A
week ago, though, Metal Bulletin reported that low-carbon ferro-chrome prices in Europe have
gathered strength in recent weeks
as availability has
tightened due to increased demand in China, where production
costs have been high, sources told Metal Bulletin.
High chrome ore inventory in South Africa continued to weigh on
UG2 chrome ore prices last week.
recently-launched chrome ore index
, which replaced its UG2
assessment on March 10, was calculated at $370 per tonne cif,
down from $372 a week earlier.
Most chrome ore offers were heard at $370 per tonne, but
Chinese sources said deals may have been concluded below $370
per tonne as miners were eager to sell amid high inventory at
South African ports.
"Chinese ferro-chrome producers are waiting for a new round of
ferro-chrome tender prices from Chinese stainless steel mills.
They did not purchase chrome ore actively this week. We will
wait until after the Asian Ferro-alloys conference or wait for
new tender prices to be released, then decide," a main Chinese
ferro-chrome producer said.
The Metal Bulletin Asian Ferro-Alloy
is taking place this week in Hong Kong. Metal
Bulletin will be reporting from the event.
Turkish chrome ore prices
, by contrast,
were slightly higher last week, as sellers in Turkey held their
offers firm. 40-42% Turkish lumpy reached $380-410 per tonne
cfr main Chinese ports, up from $375-405 a week
"42-44% concentrate was sold at $400 [per tonne] this week.
$375 is too low for Turkish lumpy. It’s closer to
around $400-410. I am asking $420 for the same," one seller