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Tsingshan, Baosteel ferro-chrome bid prices show big rises for October
Release Time:2016-08-08 Author:News Department Traffic:614
The increase is much higher and the announcements much earlier than market participants had expected. However, market participants warned that, given the higher production costs for ferro-chrome in China and tight supply, the stainless steel mills will still find it hard to obtain supply even at these prices.

Tsingshan Group
Tsingshan Group has increased its high-carbon ferro-chrome bid price to 6,997 yuan ($1,048.58) per tonne for October, it said on Wednesday September 28.

The steelmaker increased the price by 1,100 yuan per tonne from September s bid price for delivery of material to its stainless steel facilities in Fujian province and Guangdong province.

Tsingshan set its October bid price for material delivered to the port of Tianjin at 6,877 yuan per tonne, due to the lower delivery costs for that port.

Both prices are on a cash basis, including delivery, for 50% chrome.

Baosteel
Baosteel increased its high-carbon ferro-chrome bid price to 7,000 yuan per tonne for October, up 1,100 yuan from September s level, it said on Wednesday September 28.

It is planning to buy about 38,000 tonnes of ferro-chrome in October, including Chinese domestic ferro-chrome and imported ferro-chrome.

The Baosteel bid price is also on a cash basis, for 50% chrome, including delivery. Baosteel will buy about 18,000-19,000 tonnes of domestic material in August, to supply both Baosteel Shanghai Co and Baosteel Desheng Stainless Steel Co in Fujian province.

It plans to buy a further 20,000 tonnes of imported cargoes at an equivalent price, a company official told Metal Bulletin.

Chinese domestic ferro-chrome s higher production costs, tight supply
Prices for chrome ore and coke and the shipping charges for transportation between the ferro-chrome producers and the stainless mills have all risen, taking production costs for high-carbon ferro-chrome close to 7,000 yuan per tonne, a main ferro-chrome producer told Metal Bulletin.

South African UG2 chrome ore, met grade, basis 42% chrome content, cif main Chinese ports stood at $190-200 per tonne on Friday September 23, according to Metal Bulletin’s assessment.

The UG2 price was at $168-170 per tonne on Friday August 26.

Delivery charges rose to about 130 yuan per tonne (from the factory in Inner Mongolia to Tianjin) on Wednesday September 21, up about 30% on the previous day, a stainless steel buyer told.

The charges rose that day because China’s ministries of transport and public security have jointly implemented a regulation on transport safety, limiting the maximum weight any truck can carry from September 21, and the regulation came into force just before China s long National Day holiday.

Stainless steel mills need to build inventory ahead of that holiday, which lasts from October 1 to October 7, a senior ferro-chrome analyst said.

Mills have to hike their bid prices because there has to be some profit for the long-contract Chinese domestic FeCr suppliers, to guarantee mills  deliveries go smoothly, the stainless steel buyer added.

Ferro-chrome market participants are now waiting for Taiyuan Iron & Steel s (Tisco s) ferro-chrome bid price for October, and expect this figure will also show a significant rise on September’s, though they are not sure Tisco will give a 1,100 yuan per tonne rise.

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