- Chrome ore supply tightens amid disruptions at SA ports
- Downstream demand remains weak despite policy support
CBC: Chinese ferro chrome prices remained largely steady w-o-w, with slight variations. Soft demand, rising production costs, and fragile market sentiment led to uncertainty among participants and ultimately kept prices stable.
High-carbon ferro chrome: Prices stood firm w-o-w at RMB 8,040-8,450/t ($1,094-1,150/t) exw, including taxes.
Medium-carbon ferro chrome: Prices edged up by RMB 100/t ($14/t) w-o-w to RMB 12,400-12,600/t ($1,687-1,715/t) exw, including taxes.
Factors driving market
Raw material market faces tight supply amid port disruptions: The market for chrome ore, a key raw material, has been impacted by the ongoing delays in shipping capacity recovery at key South African ports. As a result, resources were scarce in the spot market, and miners held firm on pricing. With low-priced materials nearly absent from the market, Chinese buyers were forced to navigate a supply landscape marked by uncertainty and resistance to low bids. Caught in this squeeze, smelting plants, facing rising input costs, struggled to maintain output levels.
Uncertainty around steel mill bids weighs on market: Amid rising production costs, the industry’s focus shifted to how steel mills respond with their bids. Yet, the direction remained unclear, contributing to cautious sentiment across the sector. The tug-of-war between the upstream suppliers and downstream buyers continued, with neither side yielding ground easily. This ongoing struggle exacerbated the uncertainty in the market.
Futures market reacts to global trends: In the futures market, international energy price fluctuations and a weakening South African rand added another layer of complexity. Foreign quotations remained elevated, reflecting increased costs and currency instability. These factors led many traders to adopt a wait-and-watch approach, wary of lifting prices amid unpredictable global conditions.
Downstream demand remains weak despite policy support: On the downstream side, domestic quantitative easing had temporarily lifted the steel market. However, structural issues persist. The supply-demand imbalance continues to drag on market performance, with weak demand overshadowing any price rallies. With demand stagnating, supply reductions are expected, putting further strain on the mining sector, as price pressure inevitably circles back upstream.
Outlook
Chinese ferro chrome prices are expected to remain weak in the short term, with the market facing mixed prospects. Growth could be driven by higher demand, policy shifts, and raw material supply constraints, yet risks remain from trade tensions and stricter environmental regulations.
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