- Rising supply pressures weigh on market
- Weak demand limits price recovery scope
High-carbon ferro chrome (Cr:50%, C:6-8%) prices in China remained unchanged w-o-w to RMB 8,340-8,750/t ($1,229-1,290/t). Medium-carbon (Cr:60%, C:1%) prices also stayed firm to RMB 13,200-13,400/t ($1,946-1,975/t), while low-carbon (Cr:60%, C:0.1%) prices also stood steady at RMB 13,800-14,100/t ($2,034-2,078/t) ,exw including taxes.
Chinese ferro chrome spot prices remained largely stable this week, as high stainless steel production continued to support demand. However, rising domestic ferro chrome output expectations, improving overseas supply conditions, and increasing imports from South Africa and Zimbabwe kept market sentiment cautious, limiting any upward movement in prices.
Market updates
Weak demand caps chrome ore market sentiment: The chrome ore market remained stable but under pressure, weakening cost support for ferro chrome prices. Firm overseas ore prices and elevated freight costs continued to provide a floor to the market. However, high domestic port inventories, aggressive trader selling, and weak spot prices kept sentiment subdued. Meanwhile, expectations of higher ferro chrome production in both domestic and overseas markets further limited upside potential for chrome ore prices, resulting in a market characterised by weak demand and restrained cost support.
Sluggish demand continues to weigh market: Downstream procurement demand remained weak, continuing to pressure ferro chrome market recovery. Although stainless steel futures and spot transactions improved in May, and steel mill profitability supported high production levels, mills largely relied on existing inventories and limited ferro chrome purchases to essential demand. Meanwhile, lower special steel tender prices further weakened market confidence. Rising supply expectations and slow end-user demand growth continued to create a supply-demand imbalance, while cautious market sentiment and limited incremental transactions restricted any meaningful price rebound.
Outlook
In the short term, the domestic ferro chrome market is expected to remain weak as rising domestic and overseas supply continues to pressure prices. Although high chrome ore costs may prevent sharp declines, sluggish downstream demand and cautious steel mill procurement are likely to restrict market recovery.
(With inputs from CBC)
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