Posted on 29 Oct 2020
Prices of imported chrome concentrates in China’s spot market have strengthened recently, mainly in response to news that South Africa had approved a new tariff on chrome ore exports, Mysteel Global noted. But declining stocks of ore at ports also lent prices some support.
As of October 28, the price of South Africa-origin 40-42% grade chrome concentrates had increased Yuan 1/dmtu ($0.15/dmtu) on week to reach Yuan 27.25/dmtu at Tianjin port in North China, the country’s largest port for imported chrome ore and concentrates, Mysteel’s survey showed.
Behind the higher concentrates prices was the decline in chrome ore and concentrates inventories at China’s six major ports including Tianjin, where stocks of the raw material had fallen by 60,000 tonnes on week to 3.7 million tonnes as of October 23, according to Mysteel’s data.
On October 22, the South African government approved the levying of an export tariff on chrome ore to help support the country’s ferrochrome industry. Though further details about implementation and the size of the duty were not disclosed, Chinese market watchers suggest the move might see chrome ore prices pick up in the future. For now, overseas ore suppliers are opting to hold off selling amid the uncertainties, according to Mysteel’s weekly report.
“Currently, chrome ore stocks at Chinese ports are still rather high, despite the recent declines,” a Shanghai-based analyst said. “The fluctuations we’re seeing in chrome prices currently are mainly due to the sentiment after the tariff news, rather than any change in fundamentals,” she added.
In 2019, China imported 15.9 million tonnes of chrome ore, among which 12.6 million tonnes or some 79% were from South Africa, according to statistics from China’s General Administration of Customs.
However, despite the firm ore prices the spot price of ferrochrome with 55% Cr content in North China’s Inner Mongolia slipped by a further Yuan 25/t on week to Yuan 5,800/t EXW and including 13% VAT as of October 28, Mysteel’s data showed.
Domestic FeCr demand has softened markedly of late as a reflection of mediocre stainless steel demand and the softer stainless prices, Mysteel Global notes. Meanwhile, the keenness of traders for tabling inquiries has also cooled down, and as a result, China’s FeCr market is experiencing a slight oversupply for now, the report said. However, the pace of the price decline for the ferroalloy is slow as smelters will avoid making any further reduction in price, given the meagre profits they are earning, it noted.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Source:Mysteel Global
