[SMM Daily Review] Ferrochrome Market Operates Steadily, Chrome Ore Prices Fluctuate and Remain Stagnant

On May 12, 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. The ferrochrome market was generally stable with slight fall during the day, with moderate enthusiasm for inquiries and purchases, and limited actual transactions. Ferrochrome producers were relatively pessimistic about the market outlook and chose to lower their quotes to ensure stable capital flows. The previous supply gap for ferrochrome gradually narrowed, and it is expected that there will be a slight surplus of ferrochrome in May. The previous tight balance in supply and demand has been continuously weakening its support for ferrochrome prices. However, the current high-level fluctuation of chrome ore prices and cost pressure have prolonged the time for ferrochrome prices to decline. It is expected that the ferrochrome market will remain weak in the short term.

On the raw material side, chrome ore prices remained stable during the day. On May 12, 2025, the spot offer for 40-42% South African powder at Tianjin Port was 61.5-62.5 yuan/mtu, unchanged from the previous trading day. A new round of futures transactions saw 60,000 mt traded at $295/mt. Inquiries were generally moderate at the beginning of the week, with purchases mainly for immediate needs and spot orders, resulting in limited transactions. Chrome ore is currently influenced by the production schedules of ferrochrome and stainless steel, and it is expected to remain stable at high prices. However, the sluggish market conditions have dampened the confidence of some traders, leading to increased bargaining space for chrome ore and a slight decrease in spot prices. In addition, the increase in chrome ore port inventory, combined with sufficient raw material inventory at ferrochrome producers, has resulted in moderate demand for chrome ore purchases. It is expected that chrome ore prices will remain stable in the short term.

In the afternoon of May 12, 2025, a joint statement was issued following the Sino-US Geneva Economic and Trade Talks, marking a positive adjustment to the tariff policy that began on April 3: Both China and the US will suspend the 24% tariff imposition within 90 days, while retaining the 10% tariff hike. This measure is expected to benefit the currently sluggish ferrochrome and stainless steel markets, driving an increase in end-use consumption demand and boosting purchasing enthusiasm. Close attention should be paid to the reactions of the stainless steel and chromium markets to the policy changes in the future.