Ferrochrome market to continue softening in June
2005-06-07 14:09:05 【Print】
BEIJING (Asian Metal) 07 Jun 05 – Chinese ferrochrome prices dropped slightly in the second half of May, and the market will continue to soften in June, a major ferrochrome producer speculated.
"The ferrochrome market will continue to be sluggish in June," a sales manager from a major Chongqing-based smelter told Asian Metal. "I think our HC ferrochrome prices for June will be around RMB6,800-6,900/t. May’s prices were around RMB7,000-7,200/t.”
Some steel mills want the smelter to cut its HC ferrochrome prices to RMB6,700-6,750/t, but the smelter declined to do so, unless payment can be made in advance.
"We insist on RMB7,000/t,” said the source, “which is difficult for steel mills to accept. I believe RMB6,800-6,900/t would be reasonable for both sellers and buyers."
Currently, the smelter is fulfilling its June contracts with some steel mills.
The source cites at least two reasons for the price reduction.
First, stainless steel demand is not as strong as before, as some major steel mills (such as Tai Steel and Bao Steel) have halted for maintenance, or hold large FeCr stockpiles.
Second, many ferroalloy producers have turned their focus towards the ferrochrome market, due to the struggling ferroalloy market. Steel mills already report receiving several offers.
The smelter concludes a few HC FeCr deals to traders for around RMB6,600/t.
The source believes the ferrochrome domestic market will continue sliding between June and August.
The smelter's HC FeCr export prices are around USD0.74-0.75/lb CIF. "We can also sell for USD0.73/lb, though we can’t accept USD0.72/lb," said the producer.
According to the source, Chinese HC FeCr prices are usually USD0.03-0.04/lb lower than South Africa's.
The smelter now produces about 9,500tpm HC FeCr, exporting about 4,000tpm, mainly to Japan.
The smelter now subsides on a batch of India-origin chrome ore 51% for three months of production, purchased in March for around USD240/mt.
Although the chrome ore market is also sluggish in China recently due to softening FeCr prices, the source predicts that chrome ore import quantities could reach around 300,000,000t this year, up from 217,000,000t in 2004.
However, an HC FeCr smelter in Shaanxi insists on its prices, around RMB6,600/t.
“Some buyers asked us to reduce HC ferrochrome prices, but we refused. Our prices are not as high as others. If our prices are below RMB6,600/t, we’ll have no profit,” said a sales manager of the smelter.
The smelter is running on its production capacity of 1,500tpm of HC ferrochrome.
"The ferrochrome market will continue to be sluggish in June," a sales manager from a major Chongqing-based smelter told Asian Metal. "I think our HC ferrochrome prices for June will be around RMB6,800-6,900/t. May’s prices were around RMB7,000-7,200/t.”
Some steel mills want the smelter to cut its HC ferrochrome prices to RMB6,700-6,750/t, but the smelter declined to do so, unless payment can be made in advance.
"We insist on RMB7,000/t,” said the source, “which is difficult for steel mills to accept. I believe RMB6,800-6,900/t would be reasonable for both sellers and buyers."
Currently, the smelter is fulfilling its June contracts with some steel mills.
The source cites at least two reasons for the price reduction.
First, stainless steel demand is not as strong as before, as some major steel mills (such as Tai Steel and Bao Steel) have halted for maintenance, or hold large FeCr stockpiles.
Second, many ferroalloy producers have turned their focus towards the ferrochrome market, due to the struggling ferroalloy market. Steel mills already report receiving several offers.
The smelter concludes a few HC FeCr deals to traders for around RMB6,600/t.
The source believes the ferrochrome domestic market will continue sliding between June and August.
The smelter's HC FeCr export prices are around USD0.74-0.75/lb CIF. "We can also sell for USD0.73/lb, though we can’t accept USD0.72/lb," said the producer.
According to the source, Chinese HC FeCr prices are usually USD0.03-0.04/lb lower than South Africa's.
The smelter now produces about 9,500tpm HC FeCr, exporting about 4,000tpm, mainly to Japan.
The smelter now subsides on a batch of India-origin chrome ore 51% for three months of production, purchased in March for around USD240/mt.
Although the chrome ore market is also sluggish in China recently due to softening FeCr prices, the source predicts that chrome ore import quantities could reach around 300,000,000t this year, up from 217,000,000t in 2004.
However, an HC FeCr smelter in Shaanxi insists on its prices, around RMB6,600/t.
“Some buyers asked us to reduce HC ferrochrome prices, but we refused. Our prices are not as high as others. If our prices are below RMB6,600/t, we’ll have no profit,” said a sales manager of the smelter.
The smelter is running on its production capacity of 1,500tpm of HC ferrochrome.
