In November, high-carbon ferrochrome prices continued to decline, and for the first time in two years, the procurement prices of major stainless steel mills diverged. TISCO was the first to announce its high-carbon ferrochrome procurement price, which decreased by 150 yuan/mt (50% metal content) from the previous month to 7,945 yuan/mt (50% metal content). Meanwhile, Tsingshan further reduced its procurement price by 200 yuan/mt (50% metal content) to 8,095 yuan/mt (50% metal content), narrowing the price gap between major stainless steel mills in the north and south to 150 yuan/mt (50% metal content). At the same time, chrome ore prices also showed a downward trend, weakening the cost support for ferrochrome. Additionally, due to the relatively sufficient inventory of ferrochrome in stainless steel mills, procurement enthusiasm was low. Under sales pressure, ferrochrome manufacturers gradually lowered their retail prices to approach the procurement prices of steel mills. The current cost level has generally led domestic ferrochrome enterprises to face losses, with production halts and cuts mainly occurring in south China. Large ferrochrome manufacturers in the north, due to lower costs and fixed electricity agreements with the power grid, maintained a high operating rate, resulting in a limited decline in total production and a continued oversupply situation. The market outlook for prices is pessimistic, with most buyers adopting a wait-and-see approach, leading to sluggish transactions within the month.
Amid the year-end off-season and poor profits for stainless steel mills, steel mills had a strong inclination to press down raw material prices. Recently, both TISCO and Tsingshan announced their high-carbon ferrochrome procurement prices for December in advance. TISCO first reduced its price by 300 yuan/mt (50% metal content) to 7,645 yuan/mt (50% metal content), while Tsingshan significantly lowered its price by 700 yuan/mt (50% metal content) to 7,395 yuan/mt (50% metal content), marking the first reversal in their procurement prices. This round of prices was much lower than earlier market expectations, resulting in a significant disparity between retail and procurement prices for ferrochrome. Given that the cost of imported chrome ore is mostly above $300, ferrochrome manufacturers faced severe losses, increasing the pressure to sell at low prices. With the market generally bearish, retail transactions nearly came to a halt. In the short term, the situation of losses for ferrochrome manufacturers is difficult to reverse, and production halts and cuts in December will further exacerbate this situation, leading to a decline in raw material demand expectations. This pressure will be transmitted upstream to the ore end of the industry chain, and raw material prices are expected to fall in tandem. With the decline in cost support, overall ferrochrome prices will remain weak. This significant price drop has intensified expectations for production cuts among ferrochrome manufacturers, potentially accelerating the process of rebalancing the supply-demand relationship in the market.
