SMM Analysis Of China High-Carbon Ferrochrome Production In May And Forecast For June

According to SMM, the national high-carbon ferrochrome production reached a new high of 792,000 mt in May, up 55,200 mt MoM (+7.49%) and 261,100 mt YoY (+49.18%). Among them, the production in Inner Mongolia was 522,500 mt, up 30,000 mt MoM (+6.09%), and the production in Sichuan was 32,000 mt, up 77.78% MoM. The bidding prices of mainstream stainless steel mills for high-carbon ferrochrome remained high. In addition, with the increase in stainless steel production, the demand for high-carbon ferrochrome remained strong. Therefore, high-carbon ferrochrome producers had rising production enthusiasm. Additionally, as South China entered the rainy season, high-carbon ferrochrome producers in Sichuan significantly increased their production resumption, with decent profits, while those in other regions also took this opportunity to put previously built capacities into production.

It is expected that the high-carbon ferrochrome production in June will slightly increase to 806,100 mt, exceeding 800,000 mt for the first time. High-carbon ferrochrome procurement prices of mainstream stainless steel mills remained high in June. The operating rate of high-carbon ferrochrome producers had reached a high level. High chrome ore prices compressed the profits of producers. Market concerns about high prices gradually emerged, leading to a recent weakening in retail transactions. Currently, high-carbon ferrochrome producers mainly rely on long-term contract orders. Due to the above factors, further expansion in production faces difficulties. Although the overall production may slightly increase, the growth is expected to be limited.