High-Carbon Ferrochrome Prices Kept Rising Due to the Higher Costs amid Power Rationing

SHANGHAI, Oct 14 (SMM) – According to SMM survey, the domestic high-carbon ferrochrome output totalled 389,000 mt in September, a drop of 96,200 mt or 19.83% month on month, and down 133,600 mt or 34.34% year on year.

China’s output of stainless steel totalled 4.05 million mt from January to September, a decrease of 0.62% year on year.

In September, the thermal coal prices have been steadily rising, exceeding the thermal-power prices. The power rationing and dual control of energy consumption across the country affected the production of high-carbon ferrochrome. Almost all ferrochrome plants in Guangxi suspended the production, where the output fell by 71.88% on the month. The intensifying power shortage in Inner Mongolia led to stricter power rationing, and the output dropped by 28.44% on the year. Hunan, Guizhou, and other regions also limited the power consumption. The stainless steel output also fell by 590,000 mt on the year. The supply and demand of high-carbon ferrochrome were both weak, but the coke prices stood high, and the power rationing caused the higher power, coke, and labour costs, which continued to push up the high-carbon ferrochrome prices.

In October, the power rationing gradually eased in Guangxi, and the high-carbon ferrochrome plants resumed production. The electricity prices in Inner Mongolia are expected to rise by 0.2-0.25 yuan/KWh, which alleviated the cost pressure, and the high-carbon ferrochrome output is expected rebound in October. However, the rainfalls will decrease in Sichuan and other southern regions in October, where the hydro-power capacity will decline. The higher civil power consumption in the upcoming heating season in Inner Mongolia may affect the power supply to the high-carbon ferrochrome plants. As for the downstream stainless steel plants, the power rationing has eased in Jiangsu, but remains strict in Guangdong and Fujian. The stainless steel output is expected to fall slightly in October.