Higher costs of chrome ore to underpin ferrochrome prices post-holiday

SHANGHAI, Feb 22 (SMM) – Higher costs of seaborne chrome ore after CNY holiday added to market optimism over prices of high-carbon ferrochrome, and this is expected to underpin prices of the essential raw materials in stainless steel production in the month ahead, SMM believes. 

As of February 21, overseas offers of chrome concentrate with 40-42% Cr in South Africa increased $3-5/mt from pre-CNY, to $160-163/mt. Offers of Zimbabwe’s chrome concentrate with 48-50% Cr grew $5/mt during the same period, to $240/mt.

Electricity supply shortage in South Africa affected production at local mines, and lifted prices of chrome ore delivered to China after trades returned from holiday. 

Low inventories of chrome ore at Chinese ports and restocking demand at high-carbon ferrochrome producers in Inner Mongolia also drove overseas suppliers to firm up offers. As of February 15, chrome ore inventories across major Chinese ports shrank 2% from pre-CNY, to 2.8 million mt.

SMM learned that severe weather in China’s northern regions of Inner Mongolia hiked shipment charges, and raised costs at high-carbon ferrochrome producers. In Fengzhen county of Ulanqab, freight charges of chrome ore increased to a high of 150 yuan/mt as of February 21. 

Extended restrictions on the power supply in Inner Mongolia will also affect local production of high-carbon ferrochrome until May. This will impact the release of 40,000-50,000 mt of new capacity that was scheduled to commission in April in Inner Mongolia. 

Separately, Shanxi’s steelmaker Taiyuan Iron and Steel (TISCO) settled its March’s purchasing price of high-carbon ferrochrome flat from February’s tender, at 6,650 yuan/mt with a lower purchasing volume, SMM learned on February 20.