Stagnant Transactions, Ferrochrome and Chrome Ore Trends Diverge [SMM Analysis]

Ferrochrome Price Review: Ferrochrome prices edged down this week. As of July 31, 2026, high-carbon ferrochrome offers in Inner Mongolia were 7,950-8,100 yuan/mt (50% metal content); in Sichuan and north-west China, 8,050-8,150 yuan/mt (50% metal content); in east China, 8,300-8,400 yuan/mt (50% metal content); all down 50-75 yuan/mt (50% metal content) WoW. High-carbon ferrochrome from Kazakhstan was quoted at 9,400-9,600 yuan/mt (50% metal content), down 50 yuan WoW. August high-carbon ferrochrome tender prices from TISCO, Tsingshan, and Beigang New Material were 7,895 yuan/mt (50% metal content), 8,095 yuan/mt (50% metal content), and 8,075 yuan/mt (50% metal content), respectively, down 200 yuan MoM.

Demand side: The stainless steel market consolidated on a subdued note this week, with futures and spot prices moving lower, social inventory accumulating, and participants lacking confidence. Affected by the off-season, end-use demand was weak, and steel mills mostly carried out maintenance and production cuts. Stainless steel production continued to decline in July, leading to relatively reduced procurement of ferrochrome. Additionally, August tender prices from mainstream steel mills were lowered by 200 yuan/mt (50% metal content) MoM, spreading market pessimism. Ferrochrome trading became increasingly sluggish, increasing shipment pressure on producers, and retail quotations fell further under pressure.

Supply side: Ferrochrome producers mostly maintained normal production, and with newly added capacity gradually coming online, China’s high-carbon ferrochrome production increased by another 1.84% in July. On the import side, according to customs data, China imported a total of 147,400 mt of high-carbon ferrochrome in June 2026, up 12.48% MoM but down 25.87% YoY. Overall, China’s ferrochrome market oversupply widened further, and prices still face downside risk in the near term.

Cost side: Ferrochrome production costs saw limited fluctuations this week, with firm chrome ore prices providing bottom support. According to SMM data, ferrochrome production costs in Inner Mongolia were about 7,863-7,895 yuan/mt (50% metal content), up 0.64% WoW; in Sichuan, costs were about 7,966-8,014 yuan/mt (50% metal content), up 0.25% WoW.

Chrome Ore Price Review: As of July 31, 2026, offers for 40-42% South African chrome ore powder at Tianjin port stood at 53.5-54.5 yuan/mtu, up 0.5 yuan WoW; 48-50% Zimbabwean powder at 58-59 yuan/mtu, up 1.5 yuan WoW; and 40-42% Turkish lump ore at 70-70.5 yuan/mtu, flat WoW. In overseas markets, offers for 40-42% South African powder were $280/mt this week, flat WoW; 48-50% Zimbabwean powder were $360-365/mt, up $10 WoW; and 40-42% Turkish lump ore were $330-335/mt, up $5 WoW.

Supply side: Chrome ore inventory rose back to 5 million mt, with the oversupply unlikely to be resolved in the short term. According to SMM data, total chrome ore port inventory this week was 5.0218 million mt, up 2.41% WoW. However, supply of high-grade chrome concentrate and mainstream lump ore was tight, and offers instead edged higher. South African powder had ample supply, but the cost of recently arrived chrome ore shipments was relatively high, and traders were mostly incurring losses, leading to firm holding of prices. Chrome ore prices remained firm this week.

Demand side: Grinding lower ferrochrome prices and sluggish trading directly affected ferrochrome producers’ purchasing strategies, with most focusing on consuming their own chrome ore inventories to generate cash. Thus, chrome ore transactions remained limited this week, mostly tentative inquiries. Furthermore, as losses deepened, some ferrochrome producers in south China plan to carry out maintenance and production cuts, so ferrochrome production may edge down in August, potentially reducing chrome ore demand.