China: Ferro chrome prices remain firm despite weak stainless steel demand

• Elevated raw material costs continue to support market stability
• Stainless steel mills’ production cuts, maintenance impact demand

Chinese high-carbon ferro chrome (Cr 50%, C 6-8%) prices remained flat w-o-w at RMB 8,690-9,100/t ($1,260-1,320/t) exw, including taxes. Medium-carbon (Cr 60%, C 1%) prices also remained stable w-o-w at RMB 13,300-13,500/t ($1,929-1,958/t), and low-carbon (Cr 60%, C 0.1%) also remained unchanged at RMB 14,000-14,300/t ($2,030-2,074/t), all exw and inclusive of taxes.

Chinese ferro chrome prices remained stable w-o-w despite subdued demand. Elevated chrome ore costs continued to support prices, while weak stainless steel demand and cautious sentiment limited trading activity and price movement.

Market updates

Chrome ore prices stay strong amid cost pressures

The chrome ore market continued to demonstrate resilience, with spot prices edging higher and forward offers remaining elevated due to strong overseas supplier sentiment. Despite ample port inventories, reduced selling pressure supported price strength.

Sustained high operating rates among ferro chrome producers ensured consistent demand for chrome ore, while rising holding costs kept traders’ offers firm. Escalating raw material expenses significantly increased ferro chrome production costs, supporting finished prices but simultaneously squeezing smelters’ profit margins.

Divergent demand trends shape stainless steel market

The stainless steel market exhibited clear structural divergence, with production cuts and maintenance schedules. Demand from construction-linked industries remained sluggish amid weak real estate and infrastructure activity. Cautious ferro chrome procurement persisted amid subdued end-use demand.

However, growth in high-end manufacturing, including aerospace and advanced technologies, supported demand for superalloys and chromium units, indirectly benefiting upstream ferro chrome. While short-term demand remains under pressure, medium- to long-term prospects continue to show positive momentum.

Outlook

Ferro chrome prices are likely to remain stable next week, supported by high costs and tight supply, while weak stainless steel demand will limit gains. A modest upside may emerge if demand improves, though supply risks persist.

(With inputs from CBC)