Steel Tender Lowers Ferrochrome Manufacturers' Profit Margins, January High-Carbon Ferrochrome Production Further Declines [SMM Analysis]

According to SMM data, in January 2025, the national production of high-carbon ferrochrome continued to decline, down 6.15% MoM and 7.12% YoY. Among them, production in Inner Mongolia decreased by 0.8% MoM. In January, Tsingshan Group's tender price for high-carbon ferrochrome fell below 7,000 yuan/mt (50% metal content). Ferrochrome producers faced widespread losses due to high production costs caused by the previous high-priced raw material purchases. Additionally, stainless steel production schedules in January are expected to decrease significantly, exacerbating the supply surplus of ferrochrome and intensifying bearish market sentiment. Some producers suspended supply to the retail market, maintaining only production under long-term agreements, leading to a further decline in overall production.

Looking ahead to February 2025, stainless steel production schedules are expected to increase, potentially boosting ferrochrome demand. Coupled with pre-holiday stockpiling, the ferrochrome retail market is expected to see active transactions and rising prices. Most mainstream stainless steel mills are likely to keep tender prices for high-carbon ferrochrome stable, and ferrochrome producers are expected to show increased production enthusiasm, continuing their previous production status. However, due to some producers halting production before the holiday and the shorter number of days in February, ferrochrome production may decrease slightly.