According to SMM data, national production of high-carbon ferrochrome further declined in September 2024. In September, the purchase price of high-carbon ferrochrome by stainless steel mills fell, leading to a decrease in retail prices. This trend caused some ferrochrome producers to face a situation where production costs exceeded market prices. Additionally, there was a severe oversupply of high-carbon ferrochrome throughout the year, increasing the difficulty of sales through retail channels, and producers faced significant pressure to sell production outside of long-term contracts. As ferrochrome producers had been continuously operating for an extended period, their outlook for the market was weak, prompting more producers to voluntarily conduct maintenance and reduce production.
In October, high-carbon ferrochrome production is expected to further decline compared to September, potentially falling below 700,000 mt. In October, the bidding prices from mainstream stainless steel mills dropped significantly, causing ferrochrome producers to fully enter a state where costs exceeded prices. Recently, large RKEF facilities in Inner Mongolia have seen concentrated shutdowns for maintenance. However, most ferrochrome producers still have substantial inventories of raw materials from earlier periods that have not been consumed, and the decline in chrome ore prices has gradually reduced costs. Stainless steel prices have shown a strengthening trend driven by macro policies, and the profits of stainless steel mills have gradually recovered, reducing their willingness to cut production. Although the ferrochrome market was previously in a state of severe oversupply and remained generally weak, the pessimistic sentiment in the market has somewhat eased. It is expected that the pace of ferrochrome production cuts may slightly slow down.
