China: Ferro chrome market witnesses continued decline amidst weak demand, high costs

CBC: The ferro chrome market saw slight declines this week, with varying impacts across different grades.

Prices of Various Grades:

High-Carbon Ferrochrome:
The average weekly market price of China’s high carbon ferro chrome (Cr: 50%; C: 6-8%) was RMB 8,600/t ($1,200/t), down 0.46% from last week. The mainstream price remained stable at RMB 8,400-8,800/t ($1,174-1,230/t).

Medium-Carbon Ferro chrome:
The average weekly price of China’s medium carbon ferro chrome (Cr: 60%; C: 1%) was RMB 13,340/t ($1,865/t), down 0.74% from last week. The mainstream price fell from RMB 13,300-13,500/t ($1,859-1,887/t) last weekend to RMB 13,200-13,400/t ($1,845-1,873/t) this weekend.

Low-Carbon Ferro chrome:
The average weekly market price of China’s low carbon ferro chrome (Cr: 60%; C: 0.1%) was RMB 13,990/t ($1,955/t), down 0.71% from last week. The mainstream price decreased from RMB 13,900-14,200/t ($1,943-1,985/t) last weekend to RMB 13,800-14,100/t ($1,929-1,971/t) this weekend.

Factors

Price stability and declines: This week, the ferro chrome market remains under pressure. While prices for high and low carbon ferro chrome have remained stable, the market’s overall weakness is evident as medium and micro ferro chrome prices continue to decline slightly.

Production and output concerns: Ferro chrome producers are on the verge of inverted losses. Although some manufacturers have begun suspending production and conducting maintenance shutdowns, there has not been a significant reduction in production in key areas, leading to persistently high output levels and increased financial strain.

Raw material and cost impact: The prices of some varieties of chrome ore have fallen slightly, but the overall decline is minimal, offering little relief on the cost side. As a result, most factories are still operating at a loss.

Outlook
The ferro chrome market is facing persistent challenges. High raw material costs, weak downstream demand, and an ongoing oversupply have driven a continuous market decline. Factory losses are worsening as downstream steel mills pressure ferro chrome manufacturers to cut prices. With demand continuing to weaken during the off-season, the market is likely to remain on a downward trajectory.

Looking ahead, the situation remains bleak. As the off-season drags on, steel mills are reducing production and pausing for maintenance, further weakening demand for raw materials. Traders are cautious, making only minimal purchases as needed. While the cost pressures persist, the anticipated drop in chrome ore prices may lead to further declines in ferrochrome prices.