SMM data reveals China's November 2023 high-carbon ferrochrome production fell slightly to 661,000 mt, down 3.71% MoM but up 25.48% YoY. Inner Mongolia produced 445,000 mt, up 1.14% MoM, while Sichuan production was 28,500 mt, down 35.96% MoM. Despite weaker steel market and price drops, stainless steel production cuts were limited, thus ferrochrome demand reduction was also limited. In the south, losses led to some ferrochrome plants halting production, which coupled with cost support, allowed ferrochrome retail prices to begin to recover. In the north, profitable retail prices kept production high. Thus, high northern operating rates meant overall ferrochrome supply decrease was limited.
December's high-carbon ferrochrome production in China is expected to hit 638,500 mt, down MoM. Yet, with stainless steel production starting to increase, ferrochrome demand is predicted to rebound. Despite lower ferrochrome bid prices from steel mills, lessened surplus expectations are easing ferrochrome producers' pessimism.
Sichuan's dry season has begun, causing a sharp rise in electricity costs and leading to shutdowns among ferrochrome producers there and in other southern areas early in the month. Yet, the north's increased capacity and stable output from large steel plants are keeping ferrochrome supply fluctuations minor.
