China High-carbon ferrochrome output in October and forecast for November

Published: Nov 9, 2023 18:13

Source: SMM

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SMM data indicates that in October 2023, China's high-carbon ferrochrome production rose to 684,500 mt, up 5.1% MoM and 53.23% YoY.

SMM data indicates that in October 2023, China's high-carbon ferrochrome production rose to 684,500 mt, up 5.1% MoM and 53.23% YoY. Specifically, Inner Mongolia produced 440,000 mt, up 8.64% MoM, and Shanxi produced 47,000 mt, up 10.07% MoM. Despite stagnant high-carbon chrome bid prices by steel mills in October, high bid prices enabled ferrochrome producers to maintain profits using previous inventory, keeping production enthusiasm high. Despite weaker-than-expected stainless steel consumption and rumors of production cuts, most ferrochrome manufacturers remained bearish, actively shipping to lower high-priced inventory. Alongside ramp-up of new production capacity in Inner Mongolia, this drove increase in national ferrochrome production.

November's high-carbon ferrochrome production is projected at 615,600 mt, lower than October's. Weak demand and falling stainless steel prices lead to steel mills cutting production and a decrease in ferrochrome demand. With the November ferrochrome bid price dropping by 300 yuan/mt, and retail prices following, current prices have fallen below most southern manufacturers' cost line. With low raw material inventory and high spot material purchasing costs, southern ferrochrome factories are likely to halt or reduce production. Although northern producers are struggling with losses, production is expected to remain stable for several reasons: 1. winter shutdowns can freeze equipment, making production resumption hard; 2. Large-scale submerged-arc furnace also demand continuous production; 3. northern manufacturers competing for market share.

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