[SMM Weekly Review] Ferrochrome Market in the Doldrums, Chrome Ore Prices Decline Slightly

On May 9, 2025, the ex-factory price of high-carbon ferrochrome in Inner Mongolia was 8,100-8,200 yuan/mt (50% metal content). In Sichuan and north-west China, the price of high-carbon ferrochrome remained stable at 8,200-8,300 yuan/mt (50% metal content), unchanged from the previous trading day. This week, the ferrochrome market was generally stable with slight fall, continuing the sluggish trend before the holiday, with limited inquiries and transactions. Limited by the downturn in the downstream stainless steel market, steel mills adopted a cautious approach to procurement, leading to weak demand for ferrochrome. To ensure stable cash flow, factories chose to lower their quotes, resulting in an increase in low-priced supplies. Ferrochrome transaction prices were concentrated in the 8,100-8,200 yuan/mt (50% metal content) range. Meanwhile, many ferrochrome producers resumed production operations before the holiday, and ferrochrome production in May is expected to increase further, gradually narrowing the previous supply gap and exerting certain pressure on the support for ferrochrome prices. In addition, according to data released by South African Customs, the volume of high-carbon ferrochrome exported from South Africa to China in March decreased by 52.3% MoM. Coupled with the announcement by South African chrome enterprise Merafe that it would halt production at two ferrochrome smelters, the supply of imported ferrochrome is expected to decrease further, which, to a certain extent, is beneficial to ferrochrome prices. However, overall, the current atmosphere in the ferrochrome market is relatively gloomy. While downstream buyers are cautious, the increase in high-priced chrome ore has added cost pressure. The ferrochrome market lacks confidence in the future outlook, worrying about the risk of price declines. It is expected that the ferrochrome market will remain weak in the short term.

On the raw material side, the chrome ore market operated smoothly this week. On May 9, 2025, the spot cargo offer for 40-42% South African powder at Tianjin Port was 61.5-62.5 yuan/mtu, a slight decrease of 0.5 yuan/mtu from the previous trading day. The new round of overseas market futures offer was $295/mt, unchanged from April 25. Inquiry sentiment for chrome ore improved somewhat during the week compared to before the holiday, but actual transactions remained limited, with many waiting for new pricing guidance from overseas mines to direct the market. Ferrochrome producers had relatively sufficient raw material stocking in the early stage, and current production mainly relies on consuming existing inventory. Coupled with the uncertainty in the downstream stainless steel market, chrome ore procurement has remained cautious, with limited spot cargo transactions of chrome ore during the week often involving price concessions. In addition, the spot cargo inventory of chrome ore increased significantly this week, up 17.52% WoW, and the supply tightness of South African powder may ease somewhat. Overall, the further increase in planned production of ferrochrome provides strong support for chrome ore demand, and restocking demand is expected to emerge subsequently. Meanwhile, the flat futures offers from overseas mines also supported market confidence in the chrome ore market. It is expected that the chrome ore market will operate smoothly in the short term.