Japanese spot import prices of high-carbon ferrochrome rose this week as Indian producers cut output amid a decline in domestic chrome ore feedstock supplies, market sources said Friday.
Platts assessed the spot price of high-carbon lumpy ferrochrome at 91-93 cents/lb CIF Japan Friday, up from 90-91 cents/lb CIF Japan a week ago, on three deals reported.
One deal for 100-200 mt and another for 500 mt were confirmed by both buyer and seller at 91-92 cents/lb CIF Japan for June shipment from India's east coast. A third deal for over 100 mt was reported at 93.5 cents/lb CIF Japan for low phosphorous material, or maximum 0.02%, and normalized to 93 cents/lb CIF Japan.
Platts takes into account deals for 10-100 mm lumpy material with minimum 60% chrome, 2-4% silicon, around 8% carbon and 0.02-0.05% phosphorous content, with a minimum volume of 100 mt on a CIF Japanese main port basis.
One Omani producer offered 89-91 cents/lb CIF Japan for 0-10 mm powder with around 47% chrome content this week, which failed to attract buyer interest, a Japanese trader said.
Seller and buyer sources said spot trade was lackluster this week as most Japanese end-users were focused on low and mid-carbon ferrochrome, which were seeing supply from Russia and Kazakhstan tighten. An Indian producer source said he received inquiries only from Europe this week.
The Japanese trader said: "End-users think high-carbon prices will stay cheap for a while, but I have concerns about supply tightening."
A second Japanese trader, who pegged the current spot price at 94-95 cents/lb CIF Japan, said: "Non-integrated Indian producers [buying chrome ore from third parties] are in a panic. End-users will be so too, eventually."
A non-integrated Indian producer source pointed to low run rates in the country, saying: "Producers are generally at below 40%."
Visa Steel is said to have cut output at its 50,000 mt/year plant since May. Platts was not able to confirm with the company.
Rohit, another non-integrated producer with a 70,000 mt/year production in West Bengal, may have cut output too, market sources said. The producer could not be reached for confirmation.
A third non-integrated producer was heard shifting to manganese alloy production. The producer did not respond to Platts' inquiries.
ORE MINING BAN
Non-integrated producers are being forced to curtail output as chrome ore supplies from Tata Steel were cut after it was ordered to suspend mining on May 16 by the Odisha State Supreme Court.
The first producer source said his company typically sourced more than 50% of its chrome requirements from Tata. The only other local supply source was the state-run Odisha Mining Corporation, or OMC.
OMC is expected to issue a tender to sell around 50,000 mt of chrome ore next week. Indian state-run Metal & Mineral Trading Corporation issued a 10,000 mt chrome ore export tender Wednesday that closes June 18.
Two non-integrated Indian producers that were said to be cutting output continued to offer spot cargoes this week, a third Japanese trader said. Ferrochrome supply from India typically falls in June as seasonal monsoons lower output at feedstock ore mines, producers said.
With domestic feedstock supply tightening, Indian ferrochrome producers said they were increasingly seeking spot ore imports from Oman and Turkey.
Spot inquiries are expected to pick up next week after Korea Resources Corp. closes a buy tender June 10 for over 1,000 mt.
Market sources said it was possible spot prices would surge if inquiries increased and spot supply ran thin.
