High-carbon ferrochrome market may stabilise in January

SMM predicted that high-carbon ferrochrome market may stabilise in January. Actual retail prices will probably be 8,500- 8,800 yuan/mt (Cr 50%). Bid prices from major stainless steel mills in January were unchanged, seeing Tsingshan's bid price at 8,495 yuan/mt (Cr 50%), defying the market’s previous expectation. Ferrochrome plants had sufficient orders amid year-end stockpiling, and most of them aimed to meet long-term contracts. In addition, losses left ferrochrome plants with weak willingness to ship goods at low price. Supply of retail goods continued to be tight. Therefore, retail price remained stable, immune from low bid prices from stainless steel mills. Recently, there were two rounds of coke price erosion. Chrome ore port arrivals remained high. Therefore, ferrochrome costs declined. In spite of supply surplus in the early stage, pre-holiday stockpiling made for smooth shipments of ferrochrome. Despite this, traditional lull demand will probably be seen. Under this circumstance, players was generally pessimistic about post-holiday market. At this stage, stainless steel production remained high. Social inventory of stainless steel dipped for four consecutive weeks. Downstream demand was still relatively resilient amid little likelihood of production cuts and maintenance at stainless steel mills. Scheduled production of stainless steel and chrome ore arrivals at ports and chrome ore stocks will deserve to be monitored.