Ferrochrome production slightly declined in June, while flat steel tenders in July boosted the increase [SMM analysis]

According to SMM data, China's high-carbon ferrochrome production in June 2025 decreased slightly, with a minor MoM decline of 0.83% and a YoY decrease of 8.96%. Among them, Inner Mongolia accounted for 78.20% of the production, with a MoM decrease of 0.9%. Southern regions such as Sichuan, Guizhou, and Guangxi accounted for 17.16% of the production, with a minor MoM decline of 0.69%. The decrease in high-carbon ferrochrome production in June mainly came from Inner Mongolia, where environmental protection checks impacted ferrochrome production in the northern region. Some ferrochrome producers chose to avoid peak production hours, resulting in a reduction in output. Meanwhile, southern regions officially entered the rainy season, and with the advantage of lower electricity prices, ferrochrome producers chose to resume production, leading to a slight increase in ferrochrome output. Overall, ferrochrome production remained largely stable.

In June, the tender price for high-carbon ferrochrome procurement by mainstream stainless steel mills remained unchanged. Tsingshan Group's tender price was maintained at 8095 yuan/mt (50% metal content), aligning with market expectations. The downstream stainless steel market faced a supply-demand imbalance, with oversupply driving the market to continue its downward trend. During the traditional consumption off-season, end-use consumption was weak, and stainless steel mills implemented production cuts, limiting procurement demand for ferrochrome. Market trading activity was mediocre, and ferrochrome sales were difficult. Producers had a poor outlook for the future market, with many planning maintenance, leading to fluctuations in production.

Looking ahead to July 2025, high-carbon ferrochrome production is expected to increase. On June 24, Tsingshan Group announced the July tender price for high-carbon ferrochrome procurement at 8095 yuan/mt (50% metal content), unchanged MoM. This unchanged price exceeded the market's earlier bearish expectations, boosting confidence in the chrome market to some extent. Additionally, with the rapid short-term decline in chrome ore prices, the smelting cost of ferrochrome decreased, expanding producers' profit margins and increasing production enthusiasm, leading to expectations for production increase. Furthermore, with the conclusion of environmental protection checks in the northern region, affected ferrochrome producers resumed normal production, and high-carbon ferrochrome production is expected to increase.