SHANGHAI, Aug 4 (SMM) - The prices of high-carbon ferrochrome dropped sharply in July, and the average price in Inner Mongolia fell 900 yuan/mt (Cr 50%) throughout the month. As of August 1, the prices of high-carbon ferrochrome in Inner Mongolia stood at 7,800-8,100 yuan/mt (Cr 50%), and 8,100-8,400 yuan/mt (Cr 50%) in Sichuan. Last Friday night, Tsingshan disclosed its bid prices in August at 7,995 yuan/mt (Cr 50%), down 1,000 yuan/mt on a monthly basis.
Supply: At the beginning of July, ferrochrome plants reduced or suspended the production due to losses. However, the production cut wills weakened with the estimated restoring profits following the fall in the prices of chrome ore and coke. Ferrochrome plants, especially those in north China, maintained high operating rates with cost advantage. However, market transactions were poor amid bearish sentiment roaming the market, and finished products held by some ferrochrome plants accumulated.
Ferrochrome prices are highly likely to drop further in August amid sufficient supply, and the manufacturers will keep suffering losses. Ferrochrome plants in south China have mostly suspended or reduced the production for maintenance. But those in north China still have some high-priced orders on hand in addition to the long-term orders, and will maintain high operating rates without plants for production cuts. It is expected that domestic ferrochrome supply will drop slightly in August.
Demand: The consumption of stainless steel was sluggish, and the steel mills reduced the production amid losses. However, the stainless steel inventory has not yet declined significantly, and the downward trend is hard to change. Therefore, steel mills were less willing to purchase high-priced raw materials, and the demand for ferrochrome also dropped in July. Stainless steel production in August is expected to further decline. Some steel mills only maintain purchases with long-term orders, and some have even stopped ferrochrome procurement in August. Ferrochrome demand weakens further.
Cost: coke prices continued to fall in July, and secondary metallurgical coke prices fell below 2,000 yuan/mt. As of the beginning of August, the prices of secondary metallurgical coke in Inner Mongolia stood at 1,950 yuan/mt, and the prices of small-particle coke and coke nut fell to around 1,700 yuan/mt. Although the port inventory of chrome ore was still at a low level, the consumer market remained week, and ferrochrome plants suffered serious losses, who reduced the demand for raw materials, including chrome ore. Due to the great production reduction of ferrochrome plants in the south, the demand for ROM has declined significantly. In addition, the supply concentration of ROM is less than that of South Africa concentrate, ROM prices dropped more significantly. The prices of coke have remained stable since entering August, but chrome ore prices are likely to fall amid constant production cuts of steel and ferrochrome mills.
On the whole, the ferrochrome market is still pessimistic in August as the stainless steel sector remains poor. The stainless steel inventory carried by steel mills is still accumulating, and the market is not confident in the traditional seasonal high in September and October, hence stainless steel production is expected to drop further. Furthermore, the reduction in ferrochrome production is unlikely to overturn the current situation of oversupply of ferrochrome, and there is possibility that ferrochrome prices will drop further in August.
![[SMM Tinjauan Mingguan Kromium] 'Stok Pelabuhan Menyusut karena Keberangkatan Memperpanjang Kenaikan, Zimbabwe Memperketat Aturan Penambangan Krom'](https://imgqn.smm.cn/usercenter/qbMSp20251217171722.jpeg)
![[SMM Kilasan Kromium] Rincian FS Mining Rencana Smelter Ferokrom dan Pembangkit Listrik senilai $500 juta di Zimbabwe](https://imgqn.smm.cn/usercenter/TdoSs20251217171724.jpeg)
