S&P Global Platts assessed the CIF Japan high-carbon ferrochrome price at $1.10-$1.15/lb Friday from $1.20-$1.25/lb a week ago as keen sellers looked to the Japanese market with China closed for Lunar New Year.
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Buyers said the most competitive sellers included a producer and were not limited to Asian traders clearing stocks.
"Since the largest Chinese market is closing, there is nowhere else for sellers to go but Japan," said an Indian producer.
Taigang and Tsingshan, the two largest stainless steelmakers in China, set their February ferrochrome purchase price at Yuan 9,300/mt ($1.05/lb) and Yuan 9,350/mt respectively, down Yuan 800/mt from January, and this pushed down spot prices in the entire region including Japan, sources said.
A steelmaker in western Japan closed a buy tender Friday for 250-300 mt of high-carbon ferrochrome. Offers were in a range of $1.10-$1.25/lb CIF Japan, said some tender participants.
A Japanese trader said he was offered $1.10/lb CIF Japan by a Middle East producer, while another said offers from India were at $1.15-$1.16/lb CIF Japan.
A second Indian producer said he was offering at $1.25/lb CIF Japan. Two Indian producers declined to offer, Japanese traders said.
While some sellers were lowering prices to sell 250-300 mt in Japan, the second Indian producer said the volume was too small and that he would not lower his offer.
A Japanese mill is seeking 50-200 mm lumps containing 60-65% chrome, maximum 9% carbon, 8% silicon, 0.05% phosphorous and 0.06% sulfur, to be delivered over March-May.
Two Indian producers said they were not participating in the tender.
In South Korea, a steelmaker closed a buy tender for 350-400 mt of high-carbon 10-50 mm lumps containing minimum 60% chrome, maximum 8% carbon, 3% silicon, 0.04% phosphorous and 0.05% sulfur, said a South Korean trader. Platts could not confirm with the mill.
The trader said offers were in the range of $1.10-$1.16/lb CIF Busan. The most competitive offer came from another trader, he added.
ORE TO SUPPORT PRICES
Meanwhile, some market participants maintained that the decline in ferrochrome prices was limited as South African 42% UG2 chromite prices were expected to stay above $350/mt CIF China this year. UG2 chromite is used for Chinese ferrochrome production.
They also said Indian Odisha Mining Corporation's chrome ore sell tender next week, which drew response from over 10 buyers, may provide some direction. The tender was expected to open over February 2-3, sources said.
No UG2 or other chrome ore deals were heard this week, but sources said a deal was done at $360/mt CIF China for UG2, down from $410/mt CIF China seen a month ago.
"This is a marginal drop. Due to consolidation [of the chrome mining sector], there are no mid-sized, small mines that typically start selloffs to get cash, and China still needs to buy more chrome ore and demand will come back after Lunar New Year," said an Indian producer.
A Japanese trader said a further increase in UG2 prices was likely after the Lunar New Year as the number of sellers were limited despite efforts by Chinese buyers to diversify their sources.
South African supplies account for roughly 50% of the global chrome ore trade.
Another Japanese trader pointed out that chrome ore stocks had increased due to the rise in imports.
"In December, China imported 132 million mt of ore, up 70% year on year. I also hear port stocks returned to the 1.5 million mt level nationwide in January. I see a $50/mt drop in ore prices this year," he said.
An European trader said, however, that ore stocks should fall when Chinese ferrochrome plants restart after the Lunar New Year holidays.
"It is normal for stocks to increase around this time of the year," he said.
Non-South African ore prices lacked direction.
A third Japanese trader said he was receiving offers for high-grade ore and concentrates with 48% chrome or higher, although he was not making any inquiries. The offers were from Turkey and Central Asia, he added.
"Prices, at $600/mt, could come down to $550/mt, as sentiment is bearish, affected by Lunar New Year," he said, adding that he had not closed any deals.
"There are no serious buyers. Outlook is better after the Lunar New Year holidays," said a Turkish miner.
High-grade high-carbon ferrochrome with less than 2% silicon content, that typically uses ore from the region, was being offered in southeast Asia at $1.35-$1.40/lb CIF, higher from $1.30/lb CIF two weeks ago. Deals, however, could not be confirmed.
--Mayumi Watanabe, firstname.lastname@example.org
--Edited by E Shailaja Nair, email@example.com