Review and Outlook of the Chrome Ore Market in October [SMM Analysis]

Chrome ore prices continued to decline in October. As of November 11, the average price of South African 40-42% chrome concentrate was 55.5 yuan/mtu, down 2.5 yuan/mtu from the beginning of the month. As of November 8, the total chrome ore inventory at national ports decreased to 2.1225 million mt, down 13,200 mt from the previous month, a decrease of 0.62%. The inventory at Tianjin Port was 1.6365 million mt. In October, the ferrochrome bidding prices dropped significantly, influenced by the sharp decline in chrome ore quotes from large overseas mines, and spot prices also fell accordingly. Although the profits of domestic ferrochrome producers were already in a negative state, and some companies began to reduce or halt production, the overall production decline was limited, so the demand for chrome ore remained high. Meanwhile, due to the high cost of imported chrome ore, domestic traders faced significant pressure when selling, and chrome ore prices showed a slow downward trend.

According to SMM data, the cumulative port departures of bulk carriers at global main ports reached 2.2209 million mt in October. The port arrivals at Tianjin Port in November are expected to be about 1.29 million mt. In November, bidding prices further declined, exacerbating the negative profit margins of ferrochrome producers, reducing their purchase willingness for chrome ore. Additionally, the cost of imported chrome ore for future delivery is also gradually decreasing. Due to the year-end off-season and the overall high supply of chrome products in the earlier period, the weakening ferrochrome market makes it difficult for chrome ore to form an independent trend, and chrome ore prices are expected to run on a weak trend. Recently, there have been reports of strike conflicts at Mozambique Port, and given the low domestic chrome ore inventory, this brings some uncertainty to the chrome ore supply, which requires continuous attention.