A clearer indication for near-term price direction in world
markets should be evident by the end of June before the
seasonal slowdown months of July and August, as market
participants look to agree third quarter delivery settlements
for charge chrome to Europe from South Africa.
Metal Bulletin’s price quotation
for Chinese domestic spot ferro-chrome basis delivered duty
- Chinese spot market recovers with consumer sentiment
- UG2 market eases, while Turkish price stabilises
- Tight producer supplies support US spot FeCr market
- ...as Europe slips again ahead of benchmark talks
stood at 5,700-6,200 yuan ($837-910) per tonne on
Friday June 16, equivalent to 65-71 cents per lb, edging higher
from the previous week’s assessment of 5,500-6,000
yuan per tonne.
Market sentiment in the Chinese stainless steel sector
strengthened in the past week, first in the 200 stainless steel
series, which then spread to the 300 series, a Shanghai-based
stainless steel analyst said.
As stainless steel prices have stopped falling in China,
domestic ferro-chrome producers say they are making losses when
their supply prices are below 6,000 yuan per tonne. Most
Chinese ferro-chrome producers reported their prices in a range
between 6,000-6,200 yuan per tonne.
South African chrome ore miners have been offering higher
prices over the past week, compared with a week earlier, which
has cemented support for Chinese ferro-chrome producers.
China’s top ferro-chrome producer Inner Mongolian
Xinganglian Metallurgy, which has a monthly production capacity
of 50,000 tonnes, suffered an explosion at its plant in the
However, it is unclear what caused the blast and to what extent
production may be affected. The plant supplies about 36,000
tonnes a month of ferro-chrome to major Chinese steelmaker
Taiyuan Iron and Steel Group (Tisco), which on June 16
announced a tender price for June at 5,300 yuan per tonne.
The spot high-carbon ferro-chrome markets in Japan and South
Korea have dropped again in the past week, with buyers
sidelined ahead of the announcement of the European charge
Metal Bulletin assessed the spot high-carbon
ferro-chrome price in Japan
at $0.85-0.90 per lb cif Japan
on June 15, from $0.90-1.00 per lb from the week before.
The spot price in South Korea
was assessed at
$0.80-0.85 per lb cif South Korea, down from $0.85-0.90 per lb
China's Baosteel Stainless announced its long-awaited June
tender price, with the level down as low as $0.62 per lb.
Two deals in Japan were reported at $0.89 and $0.87 cif Japan,
respectively, with offers from India reported at as low as
$0.85 cif Japan.
Long-term contract, charge chrome
The Chinese long-term contract ferro-chrome price range has
widened after Tisco announced its ferro-chrome tender price for
June. Metal Bulletin’s price quotation
for Chinese domestic ferro-chrome on contracts
at 5,300-6,300 yuan per tonne on June 16, down from 5,500-6,300
yuan in the previous week.
"We can get cargoes at this price on long contracts [...] we
have 60,000 tonnes of long contract supplies each month," a
company official said.
China’s import charge chrome market has increased
in price in line with business sentiment in the Chinese
stainless steel sector. China import charge chrome (50% Cr
index basis duty unpaid) was $0.71 per lb, from $0.70 per lb.
Increased world nickel prices, with the London Metal Exchange
cash price up to $8,900 per tonne, from $8,700 per tonne, in
the past week, and firmer fundamentals, has underpinned steel
market sentiment, according to industry sources in China.
Meanwhile, South African charge chrome producers are considering production cuts
bid prices from Chinese steel mills are falling below operating
costs in South Africa.
The South African UG2 chrome ore price fell on June 16 amid low
key buying interest in China. Metal Bulletin’s UG2 chrome ore
dropped $2 to $138 per tonne cif China.
However, the Turkish chrome ore market has held at around
$230-250 per tonne, with producers there reluctant to cut their
offer prices close to $200 per tonne. Chrome ore stock levels
in Chinese ports are at a high level – around 2.5
US stability only temporary
The US high-carbon ferro-chrome market stabilised in the past
week, as the country persisted in bucking a general downward
trend in prices seen in most of the rest of the world, but
prices may be dragged lower.
Spot prices for US high-carbon
increased at the bottom end of its trading
range, and off a cent at the top, to $1.40-1.45 per lb on June
16, from $1.37-1.46 per lb a week earlier, according to Metal
Bulletin sister publication AMM’s latest
The market saw a flurry of spot enquiries, although they were
limited in volume. Limited stock levels and a shortage of
supply options for prompt material has supported prices.
"We have a market in high-carbon ferro-chrome where material is
bottled up by a few producers and suppliers, with very little
customer base left on the spot," a supplier source told AMM.
"Whatever small business there is there aren’t
many options for prompt supply [...] so we are continuing to
see numbers in the $1.40’s [per lb]," he said.
"None of the traders wanted to buy when numbers were going up,
so no one really has much cheap material around," another
supplier source said. "So outside of what a few traders have
purchased from the DLA [US Defense Logistics Agency], outlets
for prompt material are essentially limited to the producers."
Still, industry sources reckon a price correction lower is
inevitable as the current 20 cent per lb gap between the US and
European market is not sustainable. US dealers said lower
import offer prices have already been seen and that a
correction in the US market should follow.
US low-carbon ferro-chrome market prices have been mostly
unchanged. Spot prices for 0.10% carbon ferro-chrome
have narrowed to $1.98-2.02 per lb, from $1.97-2.03 per lb
previously, according to AMM’s latest assessment.
Market participants said an increase in OCTG (oil country
tubular goods) was essential to drive consumption in refined
ferro-chrome grades in the USA. OCTG are metal tubes that are
used in oil and gas production, which involve drill pipes,
casing and tubing and are used both onshore and offshore.
Europe drops, awaits benchmark talks
In Europe, prices dropped in standard high-carbon and refined
grades, with market sentiment cautious ahead of third quarter
settlement talks expected to start in coming days.
The European high-carbon price
was down three
cents to $1.15-1.25 per lb, while low-carbon 0.10% grade high-carbon
was off 10 cents to $1.90-2.00 per lb.
One supplier reported doing deals "between $1.90 and $1.95 a
lb", while others said they are prepared to offer at $2.05 per
lb, but drop to no lower than $2.00 per lb. Metal Bulletin's assessed 0.06% grade
dropped five cents to $2.00-2.10 per lb, while low phosphorous (P max. 0.015%) grade
dropped a few cents to $1.30-1.40 per lb.
Market trading on a spot basis is expected to be quiet ahead of
imminent talks between charge chrome producers in South Africa
and consumers in the European steel sector.
Metal Bulletin's ferro-chrome benchmark
suggests that the price would be $1.14 per lb, if
settled on June 16, one cent lower than the previous week's
indication but well down on the current benchmark of $1.54 per
lb, which dropped 11 cents from the first quarter.
Meanwhile, in a research note in the past week, investment bank
Jefferies expects the benchmark to fall further to $1.10 per lb
in the fourth quarter.
"The European ferro-chrome market is very cautious," one trader
told Metal Bulletin.
"Indian ferro-chrome alloy (3% Si) is available at $1.00 per
lb, which some European customers are being offered for July
and August, and if they want it in September they can get it at
below $1.00 per lb."
One major European consumer said he had met many ferro-chrome
suppliers at a June industry event in Germany where he was
offered high-carbon alloy as low as $1.10 per lb.
"The benchmark may be as low as $1.00-1.10 per lb for the third
quarter, particularly given that charge chrome is being offered
at $0.62 per lb in China," the consumer told Metal Bulletin.
In terms of production, Finnish ferro-chrome producer Outokumpu
will cut its charge chrome production
(54-55% Cr) by about 16,000 tonnes from June 23, shutting down
a furnace at its Tornio, Finland plant for planned maintenance
In addition, Swedish ferro-alloys producer Vargön Alloys
is running at less than half of its total
annual ferro-alloys production capacity
, while its Turkish
owner Yildirim Group will decide by the end of this month it if
will cut up to a quarter of its chrome ore and ferro-chrome
production in the third quarter of 2017.
Yildirim has the capacity to make about 550,000 tpy of
high-carbon ferro-chrome across three countries where it
operates: Turkey, Sweden and Russia.