Chrome ore prices in the Chinese domestic spot market have fallen this month ahead of the Lunar New Year, while import prices are holding stable, market sources said Thursday.
Prices of 40-42% chromite were heard trading this week at Yuan 66 ($9.53)/metric ton unit, which is a price for one ton of ore containing 1 kg chrome.
This was down Yuan 1-2/mtu from late December, said Yujing Liu, analyst at Beijing Antaike, Chinese state-run consultancy.
A South African miner agreed Yuan 66/mtu was the current spot trading level.
Liu attributed the price fall to Chinese stainless steelmakers cutting January ferrochrome purchase prices.
The miner agreed, adding that trade volumes were thin despite lower prices, with only a few hundred ton lots sold to ferrochrome smelters.
Buyers were mostly smaller smelters with enough stocks for February. The large smelters, typically with several ten thousand tons of annual output capacity, have stocks to cover until the end of March, he said.
The lower prices failed to attract buyers as ferrochrome producers want to utilize their stocks first.
Sellers were outnumbering buyers currently as some large ferrochrome producers were also re-selling their stocks, the miner added.
The large smelters typically keep three-month stocks. Delivery time from South Africa, the largest import source, takes over a month.
"The falling domestic ore price in China may be reflected in the February ferrochrome purchase price of the stainless mills. Market outlook is nontransparent," he said.
Liu also saw February ferrochrome purchase price falling, by Yuan 200-300/mt from January.
"Chinese stainless steel prices may not be good," she said.
The country's largest stainless steelmaker Tsingshan set January purchase price at Yuan 10,395/mt ($1.14/lb), down from Yuan 10,600/mt for December, and Taiyuan at Yuan 10,100/mt, down from December's Yuan 10,400/mt, and Baowu Steel at Yuan 10,300/mt ($1.13/lb), down Yuan 500/mt from Yuan 10,800/mt.
Baowu Steel however, raised January stainless steel prices. Its January 304-grade stainless steel prices rose by Yuan 1,200/mt to Yuan 17,000/mt for hot-rolled coils and to Yuan 18,000/mt for cold-rolled coils.
Meanwhile, spot import prices are holding stable, miners said.
Chinese buyers were bidding at $380/mt CIF China, while offers were at $390-$400/mt CIF China, sources said.
Sellers said their last sales prices were at $390-$410/mt CIF China and lower bids would be rejected.
"Chromite stocks at Chinese main ports are estimated to be a little above 1 million mt. That is only worth four weeks of consumption. China consumes 1 million mt/month of chromite. Last year, 2 million-mt stock level was the norm," said a second supplier source.
