Domestic spot prices of high carbon ferrochrome (50% basis Cr) in China Wednesday held steady on the week at Yuan 6,850-7,000/mt (85-86.5 cents/lb), on a delivered basis including 17% VAT, despite a cut in the December bid price by Jiuquan Iron & Steel on Tuesday.
Prices are seen to be supported by production stoppages in Inner Mongolia, the start of the dry season in the south and a decline in imports.
Market participants said spot prices do not seem to have reacted to Jiuquan Steel's bid price yet. But most said they do not expect prices to slip in the near term as a result of the steelmaker lowering its purchase price by Yuan 50/mt on the month to Yuan 6,750/mt for December deliveries.
"Affected producers had stopped production for about a week. But there is no information on how long they would remain shut," said a Beijing-based analyst in reference to shutdowns among some smelters in Inner Mongolia due to environmental checks by local authorities. She estimated a production loss of around 20,000 mt so far from the stoppages.
Industry watchers also see support for domestic prices due to the start of the dry season in southern China, with producers in the hydropower-dependent region expected to cut or stop production due to higher power rates.
There could also be reduced pressure on Chinese domestic prices from imports judging by the drop in high carbon ferrochrome import volumes in October, sources said.
Imports in October dropped 14.6% year on year and 33.5% on the month to 124,221 mt, according to data from the Chinese customs.
Domestic spot prices of high carbon ferrochrome have been flat since mid-July.
