[Ni] CBI Monthly Review - High Carbon Ferrochrome (5.4-5.26)

SHANGHAI, May 26 (CBI China) -- Price of domestic high carbon ferrochrome tracked the upward trend since late April, maintaining in the RMB 6,300-6,500/mt range. However, the price fell to RMB 6,000-6,300/mt due to weak demand from stainless steel market, and the transactions became weak as well.

    The market insiders said large volumes of imported ferrochrome flowing into Chinese market in May exerted great negative impact on domestic ferrochrome producers, which remains the main reason for the falling price of domestic ferrochrome to RMB 6,000/mt in early-mid April. However, the falling price of domestic ferrochrome in May was due mainly to the sluggish demand from stainless steel market.

    The traded price for domestic ferrochrome followed the purchase price trend since the major steelmakers fixed the purchase prices. The ferrochrome producers said the purchase volumes at steelmakers were far below the producers expected from the competition of imported ferrochrome and due to weak demand from steelmakers. Although producers can have profit margins at current prices, the prices still lacked strong support from demand.

    Domestic demand: the operating rates at large steel mills were good during May, but the private stainless steel producers remained low, and the end-user consumption reported no marked improvements. Overseas demand: ferrochrome prices fell again in European and US markets, signaling the sluggish market conditions will continue. Supply: there will be more producers to restart their capacity along with the approach of high-water period in Hunan and Sichuan provinces, then the supply is expected to be ample, coupled with imported ferrochrome, the price will face great resistance in upward trend.

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