[SMM Weekly Review] Chromium market continues to decline, with bearish expectations and is expected to remain in the doldrums

On June 20, 2025, the ex-factory price of high-carbon ferrochrome in Inner Mongolia was 7,700-7,900 yuan/mt (50% metal content); in Sichuan and north-west China, it was 7,800-7,900 yuan/mt (50% metal content); for South African high-carbon ferrochrome, the quotation was 7,800-8,000 yuan/mt (50% metal content); and for Kazakhstan high-carbon ferrochrome, the quotation was 8,800-9,000 yuan/mt (50% metal content), flat MoM from the previous trading day. This week, the ferrochrome market was in the doldrums. With steel mill tenders approaching, the market mostly adopted a cautious wait-and-see attitude, with expectations mainly leaning towards a decline. The downstream stainless steel market continued to fall. Under the circumstances of a supply-demand imbalance, expectations for production cuts at steel mills increased, leading to cautious purchases of ferrochrome, with very limited transactions within the week. Additionally, chrome ore prices continued to fall, and the third round of coke price reductions was implemented, shifting the smelting cost of ferrochrome downward. At current chrome ore futures and spot prices, the cost of producing ferrochrome in Inner Mongolia dropped to around 7,400 yuan/mt (50% metal content), providing room for further declines in ferrochrome prices, which decreased by 50 yuan/mt (50% metal content) within the week. According to Chinese customs data, China's total imports of high-carbon ferrochrome in May 2025 were 155,300 mt, down 38.8% MoM and 50.2% YoY. Among these, 35,000 mt came from South Africa, a significant decrease of 74.13% MoM. Melfi's complete halt of its ferrochrome smelting operations had a noticeable impact on the supply of imported ferrochrome, somewhat alleviating the pressure on ferrochrome supply. It is expected that the ferrochrome market will remain in the doldrums in the short term.

Raw material side, this week, chrome ore prices continued to fall, with short-term consecutive decreases in futures driving down spot prices. On June 20, 2025, the spot price of 40-42% South African powder at Tianjin Port was 54-56 yuan/mtu; the 46-48% Zimbabwean chrome concentrate powder was quoted at 55-56 yuan/mtu; and the 40-42% Turkish chrome lump ore was quoted at 61-62 yuan/mtu, flat MoM from the previous day. A new transaction of 20,000 mt of 40-42% South African powder futures was made at $265/mt, down $10 from June 14. As of June 20, the futures price of 40-42% South African chrome concentrate fell by $30 over two weeks, dampening the confidence of domestic spot traders and causing the spot price of chrome ore to drop by 3 yuan/mtu within the week. With the next month's steel mill tender approaching, the market mainly adopted a cautious wait-and-see attitude. Ferrochrome producers had relatively sufficient inventories of their own chrome ore, and influenced by the sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, they mostly waited for the steel mill tender to be finalized before purchasing chrome ore. Therefore, recent inquiries for chrome ore were sluggish, with limited transactions. According to customs data, China's total imports of chrome ore in May 2025 were 1.8996 million mt, up 25.38% MoM and 4.84% YoY. This week, the port inventory of chrome ore slightly decreased by 1.47% MoM, with a total inventory of 2.756 million mt, still at a relatively high level. With an increase in supply coupled with weak demand, the chrome ore market is expected to remain in the doldrums in the short term.