CBC: The Chinese ferro chrome market remained mostly stable but strained, with high raw material costs, tight chrome ore supply, restricted production, and weak downstream demand resulting in a persistent pricing deadlock and limited trading activity.
High-carbon ferro chrome prices edged down by RMB 100/t ($14/t) w-o-w to RMB 7,940-8,350/t ($1,086-1,142/t) exw, including taxes.
Medium-carbon ferro chrome remained unchanged w-o-w at RMB 12,400-12,600/t ($1,696-1,723/t) exw, including taxes.
Factors driving market
Stability masking underlying strain: The ferro chrome market continues to operate within a narrow range, marked by stable yet unyielding prices. While terminal demand has shown little improvement, high costs particularly for South African chrome ore, support firm factory quotations. Domestic production restrictions due to China’s energy control policies further reinforce these pricing levels. The market remains locked in a “high price, low acceptance” impasse, with buyers hesitant and sellers unwilling to concede.
Chrome ore tightness sustains price floor: Delays in shipping recovery at South African ports have tightened the availability of chrome ore, leading to persistent spot shortages. Mining companies are resolute in maintaining high prices, making low-cost supplies increasingly scarce. The market remains watchful of steel mill bidding trends, though fluctuating expectations create uncertainty. Smelters, caught in the middle, continue to face production challenges.
Currency and energy volatility shape sentiment: Ferro chrome futures are being shaped by broader global forces, including rising international energy prices and a weakening South African Rand. These factors keep overseas quotes elevated. However, with unclear demand recovery, many traders remain cautious, avoiding aggressive price chasing and opting for a wait-and-see approach.
Steel rally offers short-term relief: Recent gains in the steel market fuelled by domestic monetary easing offer brief support, but fundamental weaknesses persist. The ongoing imbalance between supply and demand in the downstream sector leaves end-users reluctant, dampening overall market confidence.
Outlook
The ferro chrome market faces an uncertain outlook, balancing potential growth from downstream upgrades and high-end demand against risks from ore supply constraints, environmental regulations, and global trade fluctuations.
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