[SMM Weekly Review] Chromium market was generally stable with slight fall, producers cautiously observing the market development in the future

On May 30, 2025, the ex-factory prices of high-carbon ferrochrome in Inner Mongolia were 7,900-8,000 yuan/mt (50% metal content), while in Sichuan and north-west China, the prices were 8,000-8,100 yuan/mt (50% metal content), unchanged from the previous day. During the week, ferrochrome prices continued to decline, with a drop of 100 yuan/mt (50% metal content). The overall market was generally stable with slight fall, with subdued purchasing sentiment from downstream buyers. However, ferrochrome producers resumed production activities, leading to a surplus in supply. Production in Inner Mongolia, a northern region, was affected by power issues, with some producers cutting or halting production. In contrast, the southern region, benefiting from lower electricity prices during the rainy season, saw more production resumptions, resulting in a significant increase in overall production compared to April. Meanwhile, news of production cuts in downstream stainless steel further impacted ferrochrome purchases, weakening the confidence of ferrochrome producers. To ensure stable cash flow, they lowered their quotes to facilitate sales. The tender prices for high-carbon ferrochrome from major steel mills in June were settled at flat levels. Coupled with the decline in chrome ore and coke prices, the production cost of ferrochrome decreased, weakening the price support and contributing to the generally stable with slight fall market trend for ferrochrome.

On the raw material side, chrome ore prices fell further this week, with the market adopting a wait-and-see attitude. Ferrochrome producers mostly purchased for spot restocking. On May 29, 2025, the spot quotes for 40-42% South African powder at Tianjin Port were 60-61 yuan/mtu, for 48-50% Zimbabwean powder were 61-62 yuan/mtu, and for 40-42% Turkish lump ore were 63-65 yuan/mtu, all unchanged from the previous day. Purchasing sentiment was subdued ahead of the Dragon Boat Festival, with a poor inquiry atmosphere. Ferrochrome producers' existing chrome ore inventory mostly consisted of previous futures, with occasional spot restocking needs, but they mostly sought low-priced spot cargo. Traders faced increasing pressure to sell, driven by expectations of a bearish market outlook, leading to discounted sales. Zimbabwean powder, with good cost-effectiveness and dispersed holdings, saw a significant price decline, becoming the focus of attention in the recent chrome ore market. This week, the chrome ore inventory at ports was 2.8606 million mt, up 2.39% WoW, with insignificant changes in outflows from warehouses and a relative increase in inflows. Considering the subsequent arrival of chrome ore at ports, supply is expected to gradually increase, exerting certain downward pressure on spot chrome ore prices. On the futures front, futures prices remained stable during the week, awaiting guidance from the new round of offers from overseas major mines. The chrome ore market is expected to remain generally stable with slight fall in the short term.