SMM China July High-Carbon Ferrochrome Production and August Forecast

According to SMM, China's high-carbon ferrochrome production in July 2024 dropped slightly to 776,000 mt, down 25,000 mt MoM (-3.12% MoM) but up 174,500 mt YoY (+29.01% YoY). Among them, the production in Inner Mongolia was 516,000 mt, down 21,100 mt MoM (-3.93% MoM); production in Guizhou was 37,000 mt, down 14.94% MoM. Although the high-carbon ferrochrome bidding price of stainless steel mills remained high in July, retail prices for high-carbon ferrochrome declined as the procurement outside long-term contracts by steel mills decreased significantly, leading to a sluggish retail market. The price of chrome ore remained high, further squeezing the profit margins of high-carbon ferrochrome manufacturers, reducing production enthusiasm. Additionally, some high-carbon ferrochrome manufacturers conducted equipment maintenance, resulting in a decline in high-carbon ferrochrome production in July. The high-carbon ferrochrome production in August is expected to be 771,700 mt, further decreasing compared to July. In August, the procurement price of high-carbon ferrochrome by mainstream stainless steel mills broke the four-month stable trend, decreasing by 100 yuan/mt (Cr50%). Although the decrease in procurement price was limited, the high cost of chrome ore led to widespread losses at high-carbon ferrochrome enterprises. However, with the approaching peak season of "Golden September and Silver October," high-carbon ferrochrome manufacturers are hopeful for demand growth. Additionally, some manufacturers still held low-cost chrome ore purchased earlier, making the impact of the price decrease relatively limited. Currently, high-carbon ferrochrome capacity is mainly concentrated in large manufacturers in North China, where the cost of halting production is high, so most enterprises have no plans to reduce production. Overall, the production of high-carbon ferrochrome is not expected to see significant adjustments.