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What were the 6 major drivers of surging Asian spot ferro-chrome prices this year?

Posted by: aliyunhuicom 2021-09-04 Comments Off on What were the 6 major drivers of surging Asian spot ferro-chrome prices this year?

What were the 6 major drivers of surging Asian spot ferro-chrome prices this year?

 

 

From:https://www.metalbulletin.com/Article/3649088/steel/tube-and-pipe.html

 

Metal Bulletin looks at what caused spot high-carbon ferro-chrome prices in Asia to rise dramatically in 2016, with prices in China, Japan and South Korea all reaching historical highs during the year.

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A bullish market in China is considered to be the main factor driving prices up in the whole Asian market due to its large market share.

Metal Bulletin’s charge chrome index, cif Shanghai, which tracks South African imports, soared by 114% to $1.35 per lb cif Shanghai on December 16 from $0.63 per lb cif Shanghai at the beginning of this year.

High-carbon ferro-chrome prices in Japan’s spot market surged by more than 90% from its first Metal Bulletin assessment of $0.66-0.7 per lb cif Japan on April 28 to $1.28-1.35 per lb on December 22.

Spot high-carbon ferro-chrome prices in South Korea also jumped by almost 60% from September 29 when Metal Bulletin began to track this market to $1.2-1.25 per lb cif South Korea on December 15.

So what are the key factors that created a bullish market this year and boosted prices?

Chrome ore price
Chinese ferro-chrome producers had to pay more for chrome ore. International miners aggressively lifted chrome ore prices this year to reflect its tight supply after a number of smelters shut down in the past 15 months.

"Miners lifted offers and also controlled its supply to China. When combined with robust demand in China, market levels were well pushed up this year," a major smelter source said.

Metal Bulletin assessed South Africa UG2 met grade chrome ore at $390-400 per tonne cif China on December 16, massively up from $90-105 per tonne on January 1.

Turkish lumpy 40-42% chrome ore prices also jumped during the year to $430-440 per tonne cfr main Chinese ports on December 16 from $175-185 per tonne on January 1.

Chrome ore supply
Chrome ore supply in China has been tighter in 2016. China purchased 9.26 million tonnes of chrome ore from the overseas market in the first eleven months of this year, down 3.8% year-on-year.

Imports from South Africa declined 2.7% from last year at 6.82 million tonnes, Chinese customs data showed.

Turkey sold 711,864 tonnes to China during this period, down 25.9% year-on-year.

Ore from Albania to China was 448,754 tonnes in January to November 2016, flat on the year.

Port inventory
Chinese chrome ore port inventory stayed at low levels during 2016 after smelters purchased more cargo from ports due to decreased supply from miners.

The latest port data by information provider Mysteel reported that chrome ore inventory had risen to about 1.1 million tonnes in mid-December from 872,000 tonnes in late October.

Coking coal
Aside from chrome ore, it is also worth mentioning the sharp price gain in coking coal this year as it is another major raw material of ferro-chrome.

Metal Bulletin assessed the China hard coking coal Shanxi spot market price at 1,470-1,750 yuan ($212-252) per tonne on December 16, a significant increase of 151.5% from 550-730 yuan per tonne at the beginning of this year.

Meanwhile, Metal Bulletin’s coking coal index – hard coking coal also saw huge gains to $231.49 per tonne cfr Jingtang on December 22 from January’s $78.48.

 
 
      
                                                                                                                   

Chinese stainless steel demand
Market demand for stainless steel in China has been strong this year thanks to its active housing and automotive industries, meaning demand for raw materials – including ferro-chrome – remained robust.

China produced 18.08 million tonnes of crude stainless steel in the first nine months of this year, up 1.85 million tonnes year-on-year, data from China Stainless Steel Council shows.

Of the total, 300-series crude stainless steel production rose by more than 9% to 9.16 million tonnes; output of 400-series crude stainless steel rose 12.82% on the year to 3.49 million tonnes; production for 200-series crude stainless steel rose 14.07% to 5.38 million tonnes.

Meanwhile, Chinese crude steel output also stayed robust at 738.94 million tonnes in the first eleven months of 2016, up 1.1% year-on-year, the National Bureau of Statistics said.

Ferro-chrome supply
"Ferro-chrome imports haven’t changed a lot this year, but due to some delayed deliveries of charge chrome in the second quarter, the market was in tight supply and this pushed up prices," one importer in China said.

Chinese high-carbon ferro-chrome imports totalled 2.52 million tonnes in the first eleven months of this year, up 5.8% from the same period of last year.

South Africa remained the top exporter, supplying 1.67 million tonnes of high-carbon ferro-chrome to China in the period, down 7.7% year-on-year.

Kazakhstan was the second largest seller, shipping 617,690 tonnes during the period, up 72.8% year-on-year.

India exported 122,193 tonnes to China, up 22.9% on the year.

China is expected to produce a total of 4.30-4.33 million tonnes of high-carbon ferro-chrome this year, slightly higher than last year’s 4.25 million tonnes, according to analysts in China.


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