The Import Volume of Chrome Ore in May Rose 18.34% MoM, but the Chrome Ore Supply was still Tight amid High Operating Rates

SHANGHAI, June 29 (SMM) - According to customs statistics, China's imports of chrome ore were 1.4271 million mt in May 2022, up 109,900 mt or 8.34% on the month but down 63,600 mt or 4.27% on the year. Chrome ore imports from South Africa were 1.2014 million mt, up 233,100 mt or 24.07% mt on the month, but down 3,000 mt or 0.25% on the year. Chrome ore imports totalled 5.1712 million mt from January to May 2022, down 92,500 mt or 1.76% year on year. According to the General Administration of Customs, the import volume of Nanjing Customs stood at 749,900 mt, up 325% on the month and 423% on the year.

According to SMM, since May, the domestic port inventory of chrome ore continued to decline, and the ore prices remained stable at a high level. Due to the weak downstream terminal consumption of stainless steel, steel mills were less acceptable to high-priced raw materials, hence the price of ferrochrome did not increase as chrome ore prices. But the operating rates of ferrochrome remained high as the raw material purchased in the early stage was at a low level. Therefore, most ferrochrome plants purchased high-priced spot chrome ore in an appropriate amount to expand the production cycle. It has been verified that the flood in Durban, South Africa has limited the shipment of chrome ore.

But the port inventory of chrome ore is expected to remain low in the short term as the procurement has been limited by the high prices in the early stage. At the same time, stainless steel plants are expected to continue to reduce the production, hence the demand for ferrochrome is weak. Therefore, the demand for chrome ore is weak as the ferrochrome plants suffer losses and plan to reduce or suspend the production for maintenance. It is expected that the price of chrome ore will fall in the near future, but will fall slowly amid the support of the continuous low port inventories.