Domestic spot prices of 50% Cr Chinese high-carbon ferrochrome inched higher to Yuan 6,350-6,450/mt (equivalent to 78.5-79.5 cents/lb) on Wednesday, December 3, from Yuan 6,300-6,450/mt a week ago, on the back of tight supply.
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The market is still feeling some tightness in supply after ferrochrome producers in Inner Mongolia cut production over late October to early November because of the APEC meetings held in Beijing in early November.
Further exacerbating supply tightness are production stoppages in Sichuan province after power tariffs rose in late November with the start of the dry season in the hydropower-dependent south, sources said.
Some market participants noted that it is not easy to find spot supply at less than Yuan 6,400/mt now.
"Producers are now focusing on supplying to steelmakers under their monthly contracts and do not have much material for spot sales," said an official with a central China mill.
Some suppliers are also limiting sales as they are bullish about the market going forward, added another official with an east China mill. Chinese domestic ferrochrome prices had rebounded last week after being in a downtrend since July last year, improving sentiment among ferrochrome suppliers.
While supply is tight, demand from stainless steelmakers remained stable for now and most mills are in no hurry to stock up on the raw material as demand in the stainless steel market is still slow, said industry watchers.
But demand may pick up later in December as some mills may need to start stockpiling for production during winter and Lunar New Year holidays in mid-February, noted the second official.