[SMM Chrome Weekly Review] Steel Tender Settlement Boosts Price Rise, Production Increase Fuels Optimistic Expectations

On August 29, 2025, the ex-factory price of high-carbon ferrochrome in Inner Mongolia stood at 8,200-8,350 yuan/mt (50% metal content). Prices in Sichuan and north-west China were 8,300-8,400 yuan/mt (50% metal content), while east China quotations reached 8,350-8,400 yuan/mt (50% metal content). South African high-carbon ferrochrome was quoted at 7,900-8,000 yuan/mt (50% metal content), and Kazakh product at 8,900-9,100 yuan/mt (50% metal content), up 25-50 yuan/mt (50% metal content) MoM.

This week, the ferrochrome market showed significant upward momentum. The September steel mill tender prices settled slightly above expectations, strongly boosting market confidence in chrome products, with retail prices following the upward trend. On August 25, Tsingshan announced its September tender price at 8,295 yuan/mt (50% metal content), up 300 yuan MoM and exceeding the market's mainstream expectation of 100-200 yuan. Ferrochrome producers saw expanded profit margins and increased production enthusiasm. High-carbon ferrochrome production rose 1% MoM in August, with September's planned production expected to maintain high levels. Cost side, the seventh round of coke price hikes took effect, increasing total coking costs by 200 yuan/mt, while the eighth round faced resistance, suggesting stable coke prices ahead. Meanwhile, chrome ore spot prices showed sustained modest increases driven by positive expectations, compounded by truck restrictions at Tianjin Port that tightened transportation capacity and raised freight costs by 30%. Inner Mongolia's immediate ferrochrome smelting costs remained elevated, reinforcing producers' price-firm stance, with offers rising to 8,250-8,300 yuan/mt (50% metal content), marking a 200 yuan weekly gain. Supply and demand side, as the September-October peak season approaches, downstream stainless steel production increases amid tight raw material inventories, driving gradual release of ferrochrome procurement demand. These positive factors support prevailing market optimism. Currently, ferrochrome producers are prioritizing long-term contract and backlog orders, with some having commitments extending to mid-late September. Spot inventory remains tight, with limited retail availability and growing reluctance to sell, sustaining upward price pressure. Overall, high costs support price hikes, seasonal demand strengthens consumption, and tight supply fuels holding sentiment, suggesting the ferrochrome market will maintain its firm trajectory.

Raw material side, on August 29, 2025, Tianjin Port's 40-42% South African concentrate spot prices stood at 56-57.5 yuan/mtu; 40-42% South African raw ore at 50-53 yuan/mtu; 46-48% Zimbabwean concentrate at 58-59 yuan/mtu; 48-50% Zimbabwean concentrate at 59-62 yuan/mtu; 40-42% Turkish lump ore at 60-61 yuan/mtu; and 46-48% Turkish concentrate at 64-65 yuan/mtu, up 0.25 yuan/mtu MoM. Futures market, 40-42% South African concentrate offers were $269-275/mt; 48-50% Zimbabwean concentrate at $340-350/mt, flat MoM.

This week, the chrome ore market operated steadily, with both futures and spot prices edging up slightly, but inquiries and transactions slowed down WoW. The slightly better-than-expected September steel tender prices supported a steady rise in chrome ore prices, while sustained growth in ferrochrome production schedules further bolstered market sentiment. Spot-wise, South African 40-42% chrome concentrate offers rose by 1 yuan to 56-57.5 yuan/mtu; 40-42% raw chrome ore climbed to the 10.5-11 range; Zimbabwean 48-50% chrome concentrate offers increased by 1 yuan to 59-62 yuan/mtu. In futures, mainstream South African powder ore offers rose by $4 to $273/mt, with actual transactions concentrated in the $273-275/mt range. However, most ferrochrome producers had restocked raw materials during the first half of the month when ore prices were lower, leaving them with ample inventory and limited appetite for higher-priced ore, resulting in subdued inquiry activity. Additionally, vehicle restrictions at Tianjin Port affected chrome ore transportation, prompting many producers to postpone purchases until after the key period. For forward spot cargo, given sustained high shipment volumes and increased chrome ore exports driven by overseas ferrochrome production cuts, the anticipated supply surplus may curb price upside, leading traders to favor near-term port arrivals. Futures price increases remained cautious. Port inventory-wise, this week, total chrome ore port stocks stood at 2.9182 million mt, up 4.09% MoM, with Tianjin Port holdings at 2.274 million mt, up 3.54% MoM. Port arrivals rose significantly WoW, and warehouse inflows increased, but weak procurement demand limited actual transactions, causing outflows from warehouses to decline and overall inventory to trend upward.