High-carbon ferrochrome prices in Europe have reached their highest level since November 2018 after steadily rising since the start of this year. The rising trend is poised to continue given increasing demand and a scarcity of lower-priced material from India.
Values for high carbon ferrochrome pushed up to $1.07-1.16/lb delivered duty paid (ddp) Europe on 18 February, a 24pc increase since the start of the year when prices stood at 85-94¢lb ddp.
This development marks the alloy’s highest level since 16 November 2018, with prices having come under pressure from oversupply in the subsequent two years – a dynamic that is now being reversed as Europe’s demand rises at least into the second quarter of 2021.
Demand has been rising since the middle of December, as optimism about Covid-19 vaccines helped to bolster sentiment and expectations that consumer demand might bounce back in the first half of 2021.
Stainless steel mills had returned to near-full capacity by Christmas and are now operating at full capacity to meet the increased demand.
Chinese buying of European ferro-chrome has risen in recent weeks as supply issues from Inner Mongolia persist. “There is demand from everywhere right now,” a trader said, while another producer commented that they could “not believe how busy it is at the moment”.
Normally, Indian ferrochrome captures the lower end of the price range, but with so little being traded, the recent run has been fuelled by higher-grade alloy instead. Most experts expect this trend to continue well into April, noting strong demand from China’s stainless steel sector compared with Europe’s more gradual economic recovery.