The fallout over the Chinese stainless mills decision to reduce December ferrochrome buying prices continues to ripple through the market.
Ore suppliers say they sold more to China over the last few weeks, with delivery in January. Now, they are worried once the ore gets to China, if not sooner, the buyers will demand they renegotiate the price. “It really puts us on the spot,” one said, “It’s in China so we either have to sit on it or agree to a lower price.”
The buyers say they really don’t need the ore due to the environmental cutbacks at the mills plus it will arrive right before the Chinese New Year when business stops. “I don’t see a need to buy anything before March,” one ore merchant said.
The drop in 4% carbon ferrochrome price is impacting the refined grades, with buyers demanding lower prices for low and medium-carbon products. TISCO purchased 1,500 mt of 60% Cr, 0.25% C medium carbon for December shipment at rmb12,480- per mt, or $1.22 per lb, ddp, down rmb790 from November.
While low-carbon suppliers are resisting a rmb700-800 per mt reduction, they are willing to lower their prices by around rmb300-350.