SHANGHAI, Oct 29 (SMM) – In early October, the government widened the floating rate of the electricity prices to guarantee the profits of the thermal coal power generation plants.

The electricity prices in the ferrochrome and other ferroalloy industries were significantly raised, and the electricity costs take up a large proportion in the total costs.

The electricity prices in Inner Mongolia increased by 0.2-0.25 yuan/KWh from the 0.45 yuan/KWh in September. The electricity cost increased by 760-950 yuan/mt (Cr 50%), and the total cost rose to over 9,000 yuan/mt (Cr 50%), which supported the high-carbon ferrochrome prices.

The bid solicitation prices for the high-carbon ferrochrome were low in October as the stainless steel output stood low, but the ferrochrome plants held the prices high. The high-carbon ferrochrome prices have fallen slightly in October.

The government encouraged the coal production to ensure the coal supply and curb the price increase of thermal coal.

The coal futures prices fell significantly recently. The power generation costs with the thermal coal are expected to fall, and the metals prices fell across the board.

The operating rate across the ferrochrome producers rose amid the eased power rationing in Inner Mongolia and other regions, and the high-carbon ferrochrome output will increase slightly in October. If the thermal coal prices fall, the cost support for the high-carbon ferrochrome will weaken, and the retail quotations may drop close to the bid solicitation prices.