News that several major producers had withdrawn from spot trading due to supply shortages has further strengthened China’s spot ferro-chrome market, sending spot prices in the week to Tuesday June 29 to their highest point since April.
“With continuing energy controls in Inner Mongolia in June, our production has been increasingly disrupted due to tightened power restrictions,” Jietie Ferroalloy said in a notice on Tuesday morning. “This has resulted in delays and declines on our long-term contract deliveries. Therefore, we have decided to stop spot sales and try to fulfil our long-term commitments.”
Later the same day, a number of main producers in Inner Mongolia, including Mintal Group Chrome Technology and Sichuan Yuanda Juhua, made announcements that they also intended to exit the spot market, and for the same reasons.
These moves immediately boosted market sentiment, given that the market was already tight because of the electricity restrictions that have been imposed rigorously on the ferro-chrome production region of Inner Mongolia.
As a result, Fastmarkets’ price assessment for ferro-chrome, spot, 6-8% C, basis 50% Cr, ddp China, rose by 100 yuan per tonne.
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