China's Taigang Stainless Steel has set its high carbon ferrochrome (50% basis Cr) purchase price at Yuan 6,750/mt ($1,091/mt) for August deliveries, down by Yuan 100/mt from its July price, according to market sources.
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"Smelters will accept this price. It is not too bad a price," said a Beijing-based analyst.
Market participants have largely expected major stainless steelmakers to either rollover or drop slightly their August purchase prices on weak market sentiment as the stainless sector remains lackluster.
Taigang officials couldn't immediately be reached for comment.
Other major stainless mills like Baosteel and Jiuquan Iron & Steel will likely follow and drop their August prices by Yuan 50-100/mt, the analyst predicted. The two companies had set their bid prices at Yuan 6,950/mt and Yuan 6,800/mt respectively for their high carbon ferrochrome deliveries in July.
Industry observers also see Chinese domestic high-carbon spot prices softening this week in response to the lower purchase price from Taigang.
"Spot prices should start falling from Tuesday. Prices should drop to below Yuan 7,000/mt this week," a trader in north China said.
Chinese domestic spot prices of high carbon ferrochrome (50% basis Cr) were at Yuan 7,000-7,100/mt (equivalent 86-87 cents/pound) delivered with VAT last Wednesday (July 17).
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