China's High-carbon Ferrochrome Output Decreased in April due to the Environment Protection

SHANGHAI, May 9 (SMM) - SMM data showed that China's high-carbon ferrochrome output decreased slightly in April, with a MoM decline of 4.98% to 555,500 mt, a YoY increase of 95,000 mt, an increase of 19%. The output in Inner Mongolia was 262,200 mt, a MoM decline of 19,600 mt, a decrease of 14%. The output in Shanxi was 39,500 mt, down 22% MoM. In April, the central environmental protection supervision team was stationed in Ulan Qab in Inner Mongolia. Some high-carbon ferrochrome manufacturers chose to shut down the sintering equipments, and the heating furnaces also stopped and reduced production to a certain extent, which limited the output of Inner Mongolia. Affected by the pandemic in Shanxi, the transportation of raw materials was limited, affecting the commencement of operation. During the normal water season in Sichuan, the cost fell due to the declined electricity charge, so that manufacturers actively started to increase production. The output of high-carbon ferrochrome in May is expected to be 584,100 mt, which is slightly higher than that in April. The environmental protection inspection in Inner Mongolia has ended, the pandemic situation in Shanxi has alleviated, and the rainy season in southern Sichuan and other regions is coming, so that the hydropower generation has increased and the electricity charge has reduced. As a result, the operating rate of high-carbon ferrochrome smelters in the region is expected to increase. In the near future, the ferrochrome prices has been driven upward by the rise of chrome ore prices. The ferrochrome futures procurement in the early stage was mainly driven by the active production amid good profits. However, recently, the chrome ore prices has been rising rapidly, and most ferrochrome mills were cautious in procurement due to the high raw material prices. If the low-cost raw materials are consumed in the later stage, there is a certain risk of production decline of ferrochrome. In addition, due to the weak consumption of stainless steel under the influence of the pandemic, steel mills are expected to reduce production and reduce the demand for ferrochromium. Ferrochrome market is likely to be weak in supply and demand in the later stage.