- Costs, liquidity issues pressure down market
- South African strikes may trigger price rally
CBC: The ferro chrome market experienced a slight decline this week due to a combination of supply expansion and weakened demand. On the supply side, new production capacity in Inner Mongolia and the restart of ore-fired furnaces in Shaanxi intensified competition, prompting manufacturers to offer shipment concessions. Demand remained subdued as stainless steel mills maintained low inventories, and Tsingshan Group’s removal of price limits further empowered buyers.
High-carbon ferro chrome prices inched down by RMB 100/t ($14/t) w-o-w to RMB 7,540-7,950/t ($1,049 – $1,106 /t) exw, including taxes.
Meanwhile, medium-carbon ferro chrome prices remained stable w-o-w at RMB 12,500-12,700/t ($1,739-1,767/t) exw, including taxes.
Market recap
Chrome ore inventory, payment constraints weigh on prices: Ferro chrome market sentiments remains subdued as cost support continues to weaken. Falling prices of South African refined powder and reduced shipping costs have eroded the price floor, while producers still face pressure from high-priced chrome ore inventories. On the policy front, long-term growth is supported by favourable energy transformation guidelines, but short-term emission reduction mandates have curbed steel mill purchasing activity.
Liquidity pressures stall ferro chrome spot market activity: Liquidity constraints have emerged as a key factor suppressing spot market activity in the ferro chrome sector. Traders are prioritizing month-end payment obligations, limiting their ability to engage in new transactions. Simultaneously, steel mills have increased their use of acceptance bills, which delay cash flow to suppliers and reduce immediate liquidity. These combined pressures have led to a slowdown in spot trading, reflecting cautious market sentiment and tighter financial conditions.
Outlook
Ferro chrome prices in China are expected to remain weak and fluctuate in the near term due to subdued demand and competitive pricing pressures. However, potential upside support could come from the ongoing strike in South Africa, which may disrupt supply and boost prices, and special military-grade ferro chrome orders that could spur demand.
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