Ferrochrome Surplus Under Pressure, Chrome Ore Rebounds Slightly [SMM Analysis]

Ferrochrome price review: Ferrochrome prices continued to fall this week. As of July 17, 2026, high-carbon ferrochrome was quoted at 8,000-8,150 yuan/mt (50% metal content) in Inner Mongolia; 8,100-8,250 yuan/mt (50% metal content) in Sichuan and north-west China; and 8,350-8,450 yuan/mt (50% metal content) in east China, down 25 yuan WoW. High-carbon ferrochrome from Kazakhstan was quoted at 9,500-9,600 yuan/mt (50% metal content), flat. The high-carbon ferrochrome steel mill tender expectation index was at 8,219.59 yuan/mt (50% metal content), and the market had some bearish expectations for mainstream steel mill tender prices next month.

Demand side: Downstream stainless steel held up well during the week, with futures and spot prices rising steadily, and market confidence recovered somewhat. However, it was still the traditional consumption off-season, and end-use demand remained weak. Steel mills showed signs of further production cuts, limiting the release of ferrochrome procurement demand and leading to mostly need-based deals. Additionally, with steel mills entering the tender pricing cycle, the market largely adopted a wait-and-see stance on mainstream steel mill tender prices for next month. Given that steel mills had some desire to bargain down raw material prices, participants were mostly bearish on tender expectations, and overall trading remained sluggish.

Supply side: New capacity came on stream and reached normal production, while the impact of the light-wind season in Inner Mongolia was limited. Ferrochrome production stayed high and may have edged up slightly from June. For imported ferrochrome, according to customs data, China imported 131,000 mt of high-carbon ferrochrome in May 2026, down 9.7% MoM and 15.62% YoY, with imports moving sideways at low levels. Overall, the ferrochrome market oversupply became increasingly evident, weighing on prices.

Cost side: Ferrochrome production costs edged up during the week. Chrome ore prices, the main raw material, rebounded, and freight costs rose in some regions, raising ore costs for ferrochrome production. According to SMM data, ferrochrome production costs in Inner Mongolia were about 7,809-7,855 yuan/mt (50% metal content), up 0.78% WoW; costs in Sichuan were about 7,937-7,983 yuan/mt (50% metal content), up 1.09% WoW.

Chrome ore price review: As of July 17, 2026, 40-42% South African chrome ore fines were quoted at 53-54 yuan/mtu at Tianjin port, up 0.5 yuan WoW; 48-50% Zimbabwean fines at 56-57 yuan/mtu, up 1 yuan WoW; and 40-42% Turkish lump at 69.5-70.5 yuan/mtu, up 1 yuan WoW. For overseas offers, 40-42% South African fines were quoted at $280/mt this week, flat WoW; 48-50% Zimbabwean fines at $350-360/mt, up $5 WoW; and 40-42% Turkish lump at $325-335/mt, up $15 WoW.

Supply side: Chrome ore inventory declined. According to SMM data, national chrome ore inventory totaled 4.9705 million mt this week, down 2.37% WoW. Despite the slight pullback, inventory remained at historically high levels, keeping supply pressure high. Among this, South African fines were ample, while spot cargoes of mainstream chrome lump ore were relatively tight, continuing the structural divergence in inventory. Given that recent arrivals were mostly high-priced ore purchased at $305-318/mt, traders faced high holding costs and some miners struggled with inverted losses, so they were keen to hold prices firm and raised offers slightly.

Demand side: As ferrochrome prices were consolidating on a weak note, ferrochrome producers were cautious in purchasing chrome ore. With steel mill tender pricing approaching, the mainstream market expectation was bearish, so ferrochrome producers largely adopted a wait-and-see stance, drawing down existing inventories without long-term stockpiling, and mainly made spot order purchases. As a result, although inquiries in the chrome ore market increased, actual transactions were limited, and the overall market continued to move sideways.