I. Market Background of the Price Index

In industrial production, high-carbon ferrochrome, as a key alloy additive, has a wide range of applications. However, China's ferrochrome market is relatively passive: on the upstream side, it is restricted by scarce chromite resources, with an external dependence of over 99.8%; on the downstream side, approximately 90% of high-carbon ferrochrome flows into the stainless steel sector, among which more than 80% is settled through long-term contracts, guided by the bidding prices of mainstream steel mills. Meanwhile, in recent years, the high-carbon ferrochrome industry has been plagued by severe overcapacity, leading to increasingly fierce market competition and significantly greater price fluctuations. Against this backdrop, after long-term accumulation and in-depth market research, SMM officially launched the High-Carbon Ferrochrome Steel Bidding Price Expectation Index. This index aims to more truly and effectively reflect the current market dynamics of the chrome market, predict market price expectations in advance, and reduce transaction risks and costs.

II. Methodology of the Price Index

1. Comprehensive Coverage by Two-Way Samples

The inquiry scope of the High-Carbon Ferrochrome Steel Bidding Price Expectation Index simultaneously covers ferrochrome manufacturers on the smelting side and stainless steel mills on the consumption side. The samples include both leading enterprises and small-to-medium-sized enterprises in the industry, avoiding the dominant influence of a single entity on price expectations.

2. Balanced Weighting for Objective Pricing

The price index takes ferrochrome production volume and demand volume as the weight benchmarks, achieving a balanced structure where the smelting side and the consumption side each account for 50%. Additionally, the maximum weight of a single enterprise does not exceed 25%, and real-time adjustments are made according to changes in the production capacity of enterprises. This ensures the objectivity and fairness of the index.

3. Dynamic Factor and Multi-Dimensional System

Based on the current-month procurement bidding prices of high-carbon ferrochrome from mainstream steel mills, the index collects daily expectations of manufacturers (within the sample) for the next-month steel bidding prices, which are then calculated using a weighted average model. The index incorporates various factors such as costs, inventory, and supply-demand into statistics, constructing a three-dimensional system that can dynamically reflect the current operating status of the ferrochrome market.

III. Practical Effects of the Price Index

By using the price index to predict the next-month steel bidding prices, ferrochrome enterprises can reduce the cost of information asymmetry and timely adjust their production plans as well as the pace of product shipment and raw material procurement. Since its official launch in April 2025, the High-Carbon Ferrochrome Steel Bidding Index has shown a high degree of consistency with the actual steel bidding prices. A two-way verification mechanism of "expectation vs. actual" has gradually taken shape, which basically aligns with the actual trend of steel bidding prices. This fully demonstrates that SMM's methodology can truly and effectively reflect the market, providing more accurate reference and feedback for upstream and downstream enterprises. In future work, we will also maintain high-frequency interactions with enterprises in the industry, respond to changes in market demand in real time, further deepen research on the chrome industry, provide effective references for the market, and help upstream and downstream enterprises in the chrome industry better grasp market dynamics.