Domestic spot prices of high carbon ferrochrome (50% basis Cr) in China were unchanged week-on-week at Yuan 6,600-6,800/mt (81-83.5 cents/lb) delivered with 17% VAT on Wednesday as the market waited for May purchase prices from the country's major stainless steelmakers.
"The market is waiting for the next round of purchases prices. Mills are in no hurry to buy now as many have sufficient inventory (of ferrochrome)," said an official with an east China mill.
Market participants are predicting that the steelmakers may either keep their May prices unchanged or drop their prices by Yuan 50-100/mt month-on-month.
There is support for the May purchase prices as many local ferrochrome producers have been forced to cut output due to weak ferrochrome demand and prices, said some sources. Chinese stainless steel prices, which have started rising recently, could also boost ferrochrome prices, they said.
But others pointed out that the mills' May prices are under pressure due to weak demand owing to production cuts among stainless producers, while ferrochrome production in southern China may rise from May onwards as the region enters the wet season and power rates in the hydropower-dependent south fall.
The recent rise in stainless prices is also unlikely to affect ferrochrome prices as the latest increase is due to higher nickel prices and not stronger stainless demand, added an official with a central China mill.
Spot prices typically take their lead from the stainless producers' monthly purchase prices, which are usually set in the second half of the preceding month.
Shanxi Taigang Stainless Steel, Baosteel and Jiuquan Iron & Steel had previously all cut their April high carbon ferrochrome purchase price by Yuan 100/mt month-on-month to Yuan 6,500/mt, Yuan 6,700/mt and Yuan 6,600/mt respectively.
The stainless steel industry is the largest consumer of high carbon ferrochrome.
