SHANGHAI, Sep 29 (SMM) - Approaching the National Day holiday, many mainstream steel mills set the bid price of high-carbon ferrochrome for October, which was lower than the market's previous expectations. However, the domestic retail prices of ferrochrome remained high as the ferrochrome plants suffered losses from the stable prices of spot chrome ore, thus the price difference between the retail prices and bid prices expanded. The traditional peak season of September and October has passed halfway, and the game in the ferrochrome market has intensified.
SMM research showed that last week, ferrochrome plants purchased a small amount of chrome ore before the holiday amid the high chrome ore prices, and the plants generally kept low in-plant inventories of raw materials. Inquiries and transactions in the chrome ore market increased, and the traded price of concentrates and ROM rose slightly. Last Friday, Tsingshan’s bid price was lower than market expectations, weakening the ferrochrome plants’ demand for chrome ore again. In addition, the intensified pandemic situations in the major ports in north China and Tianjin Port aroused a wait-and-see sentiment in the market.
The overall spot supply remained tight due to the production reduction of ferrochrome plants and the plants’ reluctance to ship the products produced with high-priced raw materials earlier. Besides, the ferrochrome plants held firm prices amid the losses, and the market could not see low-priced goods. Last week, the market confidence was restored by the high bid prices of many small and medium-sized steel mills for October, and the number of enquiries and transactions increased. However, after Tsingshan released the results of bids last Friday, the spread between the retail prices and bid prices of ferrochrome was huge, suppressing the market confidence and the transactions this week.
Before the holiday, traders in the ferrochrome and chrome ore markets held a strong wait-and-see sentiment, and the trading was relatively slack. It is still doubtful whether stainless steel consumption can be maintained. Low-priced chrome ore will gradually arrive at ports after mid-October, but the domestic ferrochrome output remains low. However, steel mills ramp up their output, resulting in a rare retail supply of ferrochrome. Multiple factors intensify the game in the market. The market shall pay attention to the inventory and transactions of stainless steel in the near future.
