【SMM Analysis】Ferrochrome Output Edges Down in August, Persistent High‑Level Surplus Remains Intact

News Release: August 31, 2026

According to SMM statistics, China's high‑carbon ferrochrome output in August 2026 dipped by 1.25% month‑on‑month, while rising 20.36% year‑on‑year.

Cumulative high‑carbon ferrochrome output for January‑August 2026 reached 7.36 million tonnes, representing a 32.43% year‑on‑year increase.

Ferrochrome output saw mild monthly fluctuations. Maintenance‑related production cuts occurred across northern and southern production bases, yet overall output stayed at historically high levels. On the demand side, the market entered the traditional off‑season. Downstream stainless steel performed sluggishly with weak purchasing appetite from steel mills. The August steel tender price fell by RMB 200 month‑on‑month, and spot retail quotations followed suit. Deteriorated market sentiment prompted some smelters to revise production schedules and carry out equipment maintenance, which curbed further output growth of ferrochrome to a certain extent.

On the cost side, Inner Mongolia in northern China faced power supply constraints amid light‑wind seasons, pushing power tariffs higher. In southern regions, rebounding chrome ore prices lifted ferrochrome production costs gradually. Several smelters fell into cost‑price inversion and implemented furnace shutdowns during the month.

Looking ahead, ferrochrome output is expected to fluctuate narrowly at high levels. For one thing, major stainless steel producers including Tsingshan and TISCO cut their September high‑carbon ferrochrome tender prices by another RMB 100 per 50‑base‑tonne month‑on‑month, in line with earlier bearish market expectations, leaving market participants cautious about the outlook. Despite the arrival of the traditional peak “Golden September & Silver October” consumption window, downstream stainless steel sentiment remains pessimistic. Steel mill production schedules tend to be lowered. Insufficient raw material absorption will keep surplus supply intact, forcing ferrochrome producers to adjust operating rates.

For another, persistently high costs are squeezing ferrochrome profit margins and capping output expansion. While chrome ore spot and forward prices remain stable, coke prices have risen noticeably, which may further lift ferrochrome production costs and aggravate cost‑price inversion pressures. This will push some smelters to halt production to avoid heavy financial losses.