Some positive news are coming this week between Christmas and New Year. As we expected in UNICHROME, major stainless-steel producers in China have announced increase in their tender prices. It is up by 200 RMB/T. We think this is a move in right direction and we believe that Q1 2018 tender prices will continue to rise. We base our believe on the following:

  • The current environmental shutdown in China, so far has not affected stainless-steel production but has affected some ferroalloys producers.
  • Demand within China for the stainless-steel hasn’t shown any significant signs of weakening, and we believe it will continue to strengthen
  • Imports of chromium ore have been growing over the three months untill October, as well as prices. snd then decreased in November following prices drop. This behavior is a classic sign of the strong market. Cr ore prices are growing since then and this should lead to increase of import. All in all this is supporting the cost and price for ferrochrome.
  • Spot prices in China was rising recently thus also driving the import prices up.

We believe that recent drops in tender price for three months were already enough if not more than enough to reflect actual supply/demand balance, and the market will grow again. In our view a decrease in market volatility will help stabilize the industry, which has been suffering from extreme volatile price development creating disproportionately in supply/demand balance since at least 2016.

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