SHANGHAI, Jan 18 (SMM) - The prices of high-carbon ferrochrome stopped falling last week, with a slight recovery. The supply of low-priced cargoes decreased. The transactions, though improved from the prior week, remained sluggish. The coke prices rose recently. This, coupled with the cost pressure and equipment maintenance, drove ferrochrome manufacturers in south China to cut their output or suspend the production. The concerns over the production restrictions during Winter Olympics in Inner Mongolia have bolstered the confidence of ferrochrome plants, and they raised their offers slightly. As of last Friday, the ex-works prices of high-carbon ferrochrome on a cash payment basis stood at 8,200-8,400 yuan/mt (Cr 50%) in Inner Mongolia and 8,300-8,500 yuan/mt (Cr 50%) in Sichuan, with the lowest traded retail prices of 7,900 yuan/mt (Cr 50%).
All staff at Tianjin Port has been required to carry out nucleic acid testing due to newly confirmed COVID cases. Many expressway intersections were closed and the people who leave Tianjin are required to obtain a negative nucleic acid test report within 48 hours. The shipments of chrome ore were thus significantly affected, hampering the procurement and transportation at some ferrochrome plants that were restocking aggressively. The production of ferrochrome is likely to be affected by the raw material shortages until the COVID situation eases.
The market's concerns mounted over production restrictions due to Winter Olympics in Inner Mongolia. The enterprises in Tianpishan Park in Chayouqian Banner of Inner Mongolia received relevant production restrictions notice on January 14. The ferrochrome plants in the industrial park said that they had not ceased the production, but their operating capacity would be limited to 70%. The enterprises in other areas of Inner Mongolia have not received similar notices, though.
The operating rates at ferrochrome plants in Inner Mongolia have remained high since the start of January. Despite gradual production suspensions and output cuts at some plants in south China, the overall supply remains ample. Therefore, the prices of high-carbon ferrochrome will meet great pressures. The retail prices of high-carbon ferrochrome are expected to move between 8,100-8,600 yuan/mt (Cr 50%) this week.
