China: Ferro chrome output rises m-o-m in May’25

• Production resumes in S China on lower power tariffs
• Falling chrome ore prices reduce smelters’ input costs

Mysteel: China’s production of high-carbon ferro chrome (FeCr) rose by 4.23% m-o-m in May to 727,700 tonnes (t), according to Mysteel’s latest survey of domestic FeCr smelters, which covers about 95% of the country’s total smelting capacity.

The production increase was largely driven by resumed operations among smelters in South China, where the onset of the wet season brought a notable decline in hydroelectric power costs. For example, electricity prices for ferro alloy smelting in South China’s Shaanxi province dropped by RMB 0.065/kilowatt-hour (kWh) m-o-m to RMB 0.455/kWh as of 30 May, Mysteel data shows.

At the same time, falling chrome ore prices helped ease production costs for smelters. As of June 11, CIF prices of 40-42% grade chrome concentrate imported from South Africa to Tianjin Port stood at $260/dmt, an m-o-m decrease of $25/dmt. In contrast, domestic portside prices of the same grade were at RMB 57.5/dmtu, up by RMB 4/dmtu from May, according to Mysteel’s assessment.

Another key factor supporting higher FeCr production in May was the strength of bids from major stainless steelmakers. These supportive prices were carried into June, helping to sustain production momentum, sources noted.

For instance, Taiyuan Iron and Steel Corporation (TISCO), a subsidiary of China Baowu Steel Group, maintained its bid price for high-carbon FeCr at RMB 7,895/t ($1,098.6/t) for June deliveries, including delivery charges and tax. This followed the company’s RMB 500/t increase for May delivery.

Similarly, Tsingshan Group – China’s largest stainless steel producer – kept its June bid price unchanged at RMB 8,095/t (50% Cr basis), as announced on 22 May, after two consecutive months of price hikes. Transaction prices reportedly settled at this level, reinforcing market expectations.

However, despite the stable long-term procurement prices, spot values for high-carbon FeCr continued to slide last month. Mysteel assessed the prices of 55% Cr material in Inner Mongolia at RMB 7,900/t (50% Cr basis) as of 11 June, down by RMB 300/t from 12 May. This decline reflected softening sentiment in the domestic market, as demand from stainless steelmakers weakened.

Mysteel’s survey of 43 major domestic stainless producers revealed that during May, austenitic stainless steel output fell by 2.17% m-o-m, totalling 1.78 million tonnes (mnt) – marking a second consecutive month of decline.

Looking ahead, analysts warn that the ferro chrome output trend may reverse. In early June, the United States announced an increase in tariffs on imported steel to 50%, significantly raising risks for Chinese stainless steel exports. At the same time, domestic stainless steel demand remains subdued due to the traditional seasonal slowdown in summer and ongoing weak margins.

If steelmakers respond with further output cuts, demand for FeCr could fall more sharply than expected, leading to a potential oversupply in the market and further price pressure on ferro chrome producers, Mysteel Global observed.