Recently, major Stainless-steel mills in China have announced their bidding prices:
- Both Baosteel and Tsingshan decreased their prices by approximately 400 RMB/t, settling at 6,000 and 5,997 RMB/t respectively
- TISCO on the other hand, continues to keep its Bidding Price at 6,500 RMB/t due to its switch to quarterly pricing, remaining the premium buyer
- In USD denomination, bidding price for Baosteel and Tsingshan stands at 0.68 USD/lb. While TISCO’s price, announced in October, at the current exchange rate stands at 0.74 USD/lb.
Whether TISCO decides to switch back to monthly pricing or continues with quarterly pricing, next bidding price announcement from TISCO might be very drastic. Because for TISCO to return to the historical pricing parity with Baosteel and Tsingshan (being about 200 RMB/t lower), TISCO will have to slash the January price by almost 800 RMB/t.
We expect bidding prices in China to take another drop in January, mainly due to ongoing market issues:
- Stocks of chromium ore continue to rise in China, while chromium prices are still at very low levels
- Trade negotiations between US and China are still ongoing, but with no certain date for signing and no clear understanding of what comes afterwards
- Global economic slowdown, especially in the main chromium consuming industries, such as automotive
- Ongoing currency devaluation against the US dollar in major ferrochrome producing countries, which in turn puts more pressure on the Cr and FeCr global market price, which is traditionally set in USD