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EU ferrochrome hits a two-year high and is still on an upward trend

  • Saturday, February 20, 2021
  • Source:ferro-alloys.com

  • Keywords:EU,ferrochrome
[Fellow]EU ferrochrome hits a two-year high and is still on an upward trend

Ferro-alloys.com:Since the beginning of this year, the price of high-carbon ferrochromium in Europe has risen steadily and has reached the highest level since November 2018. In view of rising demand and the shortage of low-priced materials in India, this upward trend will continue.

On February 18, the price of high-carbon ferrochrome in Europe rose to US$1.07-1.16/lb. According to estimates, the price has risen by 24% since the beginning of the year when the price was 85-94 US cents/lb (delivery after duty paid). This marks the alloy’s highest level since November 16, 2018. In the following two years, prices have been under pressure from oversupply-with rising European demand and tight supply, this dynamic is being reversed, at least in the first The second quarter may support the price of high-carbon materials in 2021.

Rising demand

Since mid-December, the demand for the alloy has been steadily increasing. Optimism about the new crown pneumonia vaccine has helped boost consumer sentiment and expectations that consumer demand may rebound in the first half of 2021.

Many stainless steel factories have almost recovered before Christmas and have begun full production to meet the increasing demand. With the recovery of stainless steel production, many purchasing managers of steel plants are currently recalling 100% of pre-signed materials, and in some cases are still seeking more materials.

A trader said: "Purchasing managers feel good about the next two quarters." He added that many people have negotiated new contracts with end users-this move has not been widely expected given the sluggish demand in the past 12 months .

Due to the long-term reduction in production, the increase in steel demand is also reflected in the prices of major steel products, such as hot rolled coils (HRC), whose prices have soared from €664.50/ton on January 4 to €729.75/ton on February 18 Ton.

In addition to shrinking demand, many traders have also found a substantial increase in spot inquiries. On the one hand, traders expect prices to rise and are therefore seeking to obtain raw materials. On the other hand, foundries and steel plants need more alloys. A trader said: "There is demand everywhere now." Another manufacturer commented that they "cannot believe it is so busy now."

In recent weeks, China’s interest in European ferrochrome has increased due to continued supply problems in Inner Mongolia. Many suppliers have already sold large quantities of goods from Europe to China, but they pointed out that the shortage of containers and ships continues to pose additional challenges and increase freight rates.

Supply problems persist

On the supply side, the supply of high-carbon alloys in Europe is very low, and many major producers have either sold out or have no supply on the spot market. A market participant said that they have always wanted to buy more than 1,000 tons of gold, but few traders can sell more than 200 to 300 tons of gold at a time. In other words, most of the spot transactions in Europe this year are higher-grade minimum 65% chromium materials, rather than low-grade Indian materials, which usually contain around 60% chromium.

Indian raw materials are currently in short supply. Indian producers are focusing on selling domestically or to China. Due to the end of the Spring Festival holiday, China’s import demand is expected to pick up. In January this year, Indian iron ore quotations were often higher than European high-end materials prices, which made most traders afraid to buy Indian ferrochrome. Under normal circumstances, Indian materials occupy the low end of the price range, but with so few transactions, the recent gains have been driven by high-grade alloys. Most market participants expect this trend to continue until April, and they point out that compared with Europe’s slower economic recovery, the demand for China’s stainless steel industry is strong.

  • [Editor:zhaozihao]

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