[SMM Analysis] Sluggish Demand Weighs on Ferrochrome Prices

The ferrochrome market operated mainly in a weak and stable manner this week. Dragged by sluggish downstream demand and limited cost reductions, both high-carbon ferrochrome and low & micro-carbon ferrochrome showed a weak pattern of "lowered offers and only rigid-demand transactions".

Ferrochrome Price Review

Ferrochrome prices edged down under pressure this week.

As of October 16, 2026, quotations for Inner Mongolia high-carbon ferrochrome stood at 7450–7700 RMB/mt, Cr50% basis;

Sichuan and Northwest China high-carbon ferrochrome at 7550–7700 RMB/mt, Cr50% basis;

East China high-carbon ferrochrome at 8000–8050 RMB/mt, Cr50% basis, down 25 RMB week-on-week.

Kazakhstan high-carbon ferrochrome was quoted at 9050–9150 RMB/mt, Cr50% basis, falling 50 RMB week-on-week.

The high-carbon ferrochrome steel tender price expectation index reached 7638.96 RMB/mt, Cr50% basis, and mainstream market sentiment continues to price in further declines for next month's steel tender price.

Low-carbon ferrochrome was quoted at 12600–12800 RMB/mt, Cr60% basis, down 50 RMB week-on-week.

Demand Side

The traditional peak consumption season expectation of "Golden September & Silver October" failed to materialize. Rising US inflation lifted interest rate hike expectations, weighing on macro sentiment and dragging stainless steel futures lower. Terminal consumption remained weak with muted stainless steel spot trading. Steel mills have steadily implemented production cuts, reducing procurement demand for ferrochrome raw material while maintaining price pressure tactics. Only a small number of steel mills entered the market for purchases during the week with cautious pricing, suppressing ferrochrome spot prices and resulting in difficult cargo clearance, alongside pessimistic market expectations. Overall, the ferrochrome market lacks substantial positive catalysts. Downside pressure from weak demand will persist, and ferrochrome prices are expected to maintain a weak performance in the short term.

Supply Side

Widespread industry losses and margin inversion have prompted intensified production cuts and shutdowns among southern producers. Northern Inner Mongolia plants maintain output backed by long-term contract volumes, yet profit margins keep shrinking, with some factories initiating maintenance to control production. Total output continues to trend lower. Nevertheless, overseas ferrochrome capacity restarts are advancing and import volumes are gradually recovering, offsetting domestic output reductions. The surplus pressure in ferrochrome supply has not been effectively eased.

Cost Side

Coke completed its second round of price cuts, coupled with falling spot chrome ore prices, bringing a slight decline in ferrochrome production costs this week. The spot production cost of high-carbon ferrochrome in Inner Mongolia stood at approximately 7612 RMB/50 mt Cr basis, down 2.16% week-on-week.

The chrome ore market trended weaker this week. Port spot price centers kept moving down while overseas forward quotations diverged. South African fines remained flat, whereas high-grade chrome concentrate and mainstream chrome ore grades saw offer declines.

Chrome Ore Price Review

As of October 16, 2026, Tianjin Port quotations:

40–42% South African fines at 50–51.5 RMB/mtu;

48–50% Zimbabwean fines at 55–56 RMB/mtu;

40–42% Turkish lumpy ore at 69–70 RMB/mtu, down 0.5–1.5 RMB week-on-week.

Overseas offers:

40–42% South African fines at 265 USD/ton, unchanged week-on-week;

48–50% Zimbabwean fines at 350–360 USD/ton, down 5 USD;

40–42% Turkish lumpy ore at 330–340 USD/ton, down 5 USD.

Supply Side

Chrome ore arrivals stayed at normal levels this week with no concentrated cargo influx. However, inventory destocking progressed slowly, keeping chrome ore inventories at high levels. Cargo disposal pressure serves as the core factor suppressing chrome ore prices. Traders were forced to offer discounts to recover capital, with actual transaction prices below nominal offers, and pessimism spread across the market.

Demand Side

Continuous drops in steel tender prices and weak downstream demand transmitted downward pressure upstream. Ferrochrome plants implemented production cuts amid eroded profits, and adopted a wait-and-see stance for chrome ore procurement, mostly only inquiring for rigid-demand restocking with sporadic small-lot deals and quiet market sentiment. Overall, chrome ore demand lacks solid support, with a stalemate game between buyers and sellers. Chrome ore demand is unlikely to see notable improvement in the short term.