The chrome market is deteriorating even though US and European prices are masking the situation. Chinese UG2 prices broke below $190 per mt today, and show signs of further declines. Chinese stainless mills’ ferrochrome spot buying price is rmb 7,100, the June price, but sellers are afraid if they agree the mills will only lower their prices more. The Chinese economy is on the skids with the growing trade war with the US and all the speculation is how much lower the Chinese ferrochrome price will be in August.
The rmb fell to its largest one-day drop against the dollar in a year and a half, and was rmb6.6727:$1. Speculation is that the Chinese government will retaliate against the new US duties by letting its currency weaken further against the US dollar.
While European prices are around $1.10 per lb, buyers are taking less and less. One mill unexpectedly postponed scheduled deliveries pointing to the summer shutdown. Glencore’s third-quarter $1.38 benchmark price stands out like a sore thumb now. Does a quarterly price make ANY sense?
Finally, the Turkish lire weakened to a record low of 4.9767:$1 and while the rand is up against the dollar to around ZAR13.39:$1, analysts are predicting it will fall ZAR14.20 by the end of the third quarter.