[SMM Weekly Review] Ferrochrome Market Generally Stable with Slight Fall, Awaiting Steel Tenders; Chrome Ore Offers Active with Prices Dropping Back Slightly

On May 16, 2025, the ex-factory price of high-carbon ferrochrome in Inner Mongolia was 8,000-8,150 yuan/mt (50% metal content). In Sichuan and north-west China, the ex-factory price of high-carbon ferrochrome was 8,100-8,250 yuan/mt (50% metal content), unchanged from the previous trading day. This week, the ferrochrome market was generally stable with slight fall. The retail price of ferrochrome slightly decreased by 50-75 yuan/mt (50% metal content), with limited actual trading volume and mediocre downstream inquiry sentiment. During the week, the favourable Sino-US tariff policies were implemented, stimulating an improvement in the downstream stainless steel market, with prices significantly strengthening. The earlier cautious wait-and-see attitude eased, pent-up consumer demand was released, and market transactions became more active. However, the favourable expectations were not fully transmitted to the ferrochrome sector, and the trading atmosphere in the ferrochrome market continued to be sluggish as in the previous period. Limited by insufficient downstream purchasing demand, coupled with a significant increase in ferrochrome supply, the earlier supply gap was gradually closing. Ferrochrome producers no longer had the sentiment to stand firm on quotes, slightly lowering their offers, and the availability of low-priced goods on the market increased. As the month progressed, the market was waiting for the next month's steel tender, with expectations that the tender price would remain flat. Considering that chrome ore prices are currently fluctuating at highs, providing cost support for ferrochrome prices, it is expected that the ferrochrome market will be generally stable with slight fall in the short term.

On the raw material front, spot prices of chrome ore slightly corrected during the week, while futures prices remained stable, and purchasing sentiment slightly increased. On May 16, 2025, the spot offer for 40-42% South African powder at Tianjin Port was 61-62 yuan/mtu, and the futures offer was 290-300 US dollars/mt. The offer for 48-50% Zimbabwean powder was 62-63 yuan/mtu, and the futures offer was 350-360 US dollars/mt, unchanged from the previous trading day. Favourable macro front boosted market confidence, slightly driving up the enthusiasm for chrome ore inquiries. From the perspective of chrome ore inventory, the port inventory of chrome ore decreased by 2.22% WoW, with a total volume of 2.9901 million mt. However, limited by the poor sales situation of ferrochrome and the sufficient raw material stocking in the earlier period, the overall atmosphere of chrome ore purchasing during the week was relatively weak, with limited firm transactions, mostly spot restocking. Some traders, their confidence shaken, chose to slightly reduce prices to sell off their goods, and spot prices of chrome ore slightly decreased by 0.5-1 yuan/mtu during the week. However, the flat futures quotes for chrome ore supported the chrome ore market. In addition, considering the upcoming steel tender pricing next month, the market was mostly in a wait-and-see mode. It is expected that the chrome ore market will be generally stable with slight fall in the short term.