[SMM Analysis] August Production Increase Closes Supply Gap, September Steel Tender Boosts Continued Production Growth

According to SMM statistics, China's high-carbon ferrochrome production continued to increase in August 2025, rising 1% MoM and 1.76% YoY. In northern Inner Mongolia, some producers conducted maintenance with production cuts, resulting in a slight 1.07% MoM decline in output. Meanwhile, southern regions such as Sichuan, Guizhou, and Guangxi planned concentrated production by leveraging the rainy season advantages, with multiple production resumptions and expansions driving an 8.7% MoM output increase. The steel mill tender price for high-carbon ferrochrome dropped slightly by 100-200 yuan/mt (50% metal content) in August, aligning with earlier bearish market expectations. However, macro tailwinds supported gradual upward momentum in downstream stainless steel, boosting ferrochrome demand and stabilizing the chrome market. Chrome ore prices had already completed their decline earlier, prompting ferrochrome producers to purchase and stockpile ore, alleviating cost pressure. Additionally, the prolonged low domestic ferrochrome production coupled with significant overseas production cuts maintained a supply gap, stimulating active domestic production with high operating rates.

Looking ahead to September 2025, high-carbon ferrochrome output is expected to rise further. On August 25, Tsingshan announced its September tender price at 8,295 yuan/mt (50% metal content), up 300 yuan MoM from August, exceeding the market's mainstream bullish expectation of a 100-200 yuan increase. This significantly boosted market confidence, with retail ferrochrome prices rising in tandem, expanding producers' profit margins and sustaining high production enthusiasm. Most producers planned output expansions. In northern Inner Mongolia, idled furnaces resumed normal operations, while southern plants controlled costs using rainy season electricity price advantages to concentrate production in September, further driving output growth. Moreover, South Africa's major chrome producer Glencore-Merafe repeatedly stated it had no plans to resume ferrochrome production in 2025, indicating persistently low overseas output and declining import supply. Concurrently, the September-October peak season saw evident recovery in downstream stainless steel, with high planned production boosting ferrochrome procurement demand. Under these dual tailwinds, domestic producers actively ramped up output to address the supply gap.