[SMM Analysis] September Ferrochrome Production Falls Short of Expectations, October Output Expected to Increase

According to SMM statistics, China's total high-carbon ferrochrome production in September 2025 was 793,700 mt, down 1.9% MoM from August. The main reason was that some producers in Inner Mongolia in northern China implemented production halts or cuts, resulting in actual production falling short of expectations, a decrease of 3.5% MoM. Meanwhile, producers in southern regions such as Sichuan, Guizhou, and Guangxi utilized the advantage of lower electricity prices during the rainy season and implemented peak-shaving production, leading to a slight MoM production increase of 0.53%. As the traditional September-October peak season for consumption began, the downstream stainless steel market showed signs of recovery, with planned production increasing further, driving continued strong purchase demand for ferrochrome raw materials. Concurrently, raw material inventories at some steel mills were relatively tight, leading to frequent inquiries and purchase activities. Robust demand supported both rising ferrochrome prices and high production levels. In September, the steel mill tender price for high-carbon ferrochrome rose by 300 yuan to 8,295 yuan/mt (50% metal content), slightly exceeding market expectations of an increase of 100-200 yuan. Producer confidence was significantly boosted, and with expanded profit margins, production enthusiasm was high, with most producers operating at full capacity. Additionally, a significant reduction in ferrochrome imports stimulated domestic producers to actively produce and capture market share. Operating rates remained at high levels. Overall, domestic ferrochrome production primarily fluctuated at highs.

Looking ahead to October, ferrochrome production is expected to reach a new high. On September 23, Tsingshan Group announced its October tender price for high-carbon ferrochrome at 8,495 yuan/mt (50% metal content), up 200 yuan MoM, aligning with previous market expectations for an increase. This provided some support to producer confidence. Furthermore, retail ferrochrome prices remained high, allowing ferrochrome producers to maintain overall profitability and positive production sentiment. Against the backdrop of a fundamental gap created by continuously decreasing ferrochrome imports, producers in southern China are utilizing the advantages of the rainy season to operate at full capacity, while producers in Inner Mongolia in the north that had halted or reduced production are mostly preparing to resume operations. Domestic ferrochrome production is expected to increase. Additionally, the positive effect of the September-October peak consumption season continues, with downstream stainless steel planned production steadily increasing, providing solid support for rigid demand for ferrochrome. Under these dual positive factors, domestic ferrochrome production is expected to continue rising, potentially breaking historical records.