- Production costs rise on elevated chrome ore tags
- Growth in stainless steel output lifts FeCr demand
CBC: The Chinese ferro chrome market was stable w-o-w, with limited price changes despite weak demand. However, rising chrome ore costs and increasing demand for stainless steel fostered optimism for future price increases.
High-carbon ferro chrome: Tags inched down by RMB 100/t ($14/t) w-o-w to RMB 7,790-8,200/t ($1,079-1,136/t) exw, including taxes.
Medium-carbon ferro chrome: Prices remained unchanged w-o-w at RMB 12,400-12,600/t ($1,718-1,746/t) exw, including taxes.
Market recap
Market remains stable despite weak demand: The ferro chrome market was stable in the period under review despite weak demand. This was because of cost support from rising chrome ore tags. These two factors limited price fluctuations in high-carbon ferro chrome.
However, some suppliers raised their offers slightly due to tighter supply and rising raw material costs. With improved margins, producers were inclined to keep tags firm, and some even halted low-priced orders, awaiting clearer demand signals.
Chrome ore prices increase: Chrome ore prices climbed up, and spot inventory at ports was tight, providing ongoing cost support. This pressure increased ferro chrome production costs, reducing the willingness of some small and medium-sized manufacturers to resume production and slowing down raw material replenishment.
However, the raw material inventory cycle for stainless steel enterprises has increased, leading to stricter cost control and lower acceptance of elevated procurement premiums for high-carbon ferro chrome. As a result, ferro chrome price increases were limited.
Downstream segment sees increased demand: Demand for stainless steel improved, and steady growth in production of the same drove up demand for ferro chrome. Notably, stainless steel is the primary application of ferro chrome. Thus, a gradual recovery in stainless steel demand will directly boost ferro chrome demand.
With positive trends in the stainless steel industry, ferro chrome producers showed more optimism about future price movements, resulting in increased bullish sentiment. Although overall trading was steady, some companies started testing higher prices to gauge market response.
Outlook
In the long run, the ferro chrome market is likely to experience an improvement based on higher demand for stainless steel. Factors such as chrome ore supply, stricter environmental policies, and international trade dynamics will significantly influence the market.
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