Ferro chrome prices, a key raw material in stainless steel making, saw a 2-5 per cent on a month-on-month basis to around ₹103,000-104,000 per tonne. The fall came on the back of slack demand from stainless steel makers and slowing export orders. Prices were at ₹107,000 per tonne, a month-back.

Some of the stainless steel makers have also cut back on production by 25-30 per cent, in view of impending monsoon, generally seen as a lean demand season for the alloy.

According to trade sources, prices ex-Jaipur are down in the ₹2,500-3,000 per tonne range. Stainless steel prices continue to be under pressure down by approximately 3-5 per cent month-on-month, in the ₹235,000/tonne range (versus ₹242,000).

“All this has led to weak buying; with mills purchasing lower than their monthly consumption requirements. There were even some buyers who requested a reduction in quantity,” a person aware of the developments said, adding that increase in export duty of 15 per cent too has played some role in weakening of demand and softening of prices.

Only long-term contracts are being catered to by the smelters. “Price pressures are expected to continue through the monsoon,” the trade source said adding that the commodity market situation continues to be volatile and is under a wait and watch status.

In general, the demand has been encouraging in Q1 and is likely to remain stable post the monsoon.

Export – Import data

Provisional data from the Union Steel Ministry show that alloy and stainless steel exports (part of the finished steel exports of the country) saw a 32 per cent jump y-o-y for the April to June period (Q1FY23) to 306,000 tonnes (versus 232,000 tonnes).

This came despite India’s steel export, driven primarily by the non-alloyed steel witnessing a 40 per cent y-o-y fall in the said period. Fall is non-alloyed steel export was 43 per cent for the period.

On the other hand, imports (of alloyed and stainless steel) for the same period was up nearly 44 per cent to 555,000 tonnes. The stainless steel industry has been apprehensive of cheaper imports coming in from other Asian markets.

China outlook

Since April, commodity prices started melting down as globally speculative positions started unwinding. Factors like controls on the supply chain by governments across the world to fight inflation; Chinese economy decelerating due to renewed Covid lockdowns, and softening of logistical imbalances are seen as some of the other reasons.

Meanwhile, as per a SteelMint report, China’s ferro chrome prices remained stable w-o-w at $1,383 per tonne amid weak demand due to production cuts owing to high temperatures. The overall market was weak due to low trade volumes, it added and said, most buyers are in a wait-and-watch mode. Moreover, lower counter bids from buyers contributed to the weak trend in the ferro chrome market.

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