Overseas Quotations for Chrome Ore Saw First Decline This Year, Resulting in Loss: What Is Future Trends of Ore Prices [SMM Analysis]

Since the beginning of this year, high-carbon ferrochrome production has repeatedly hit new highs, driving chrome ore prices to historical peaks in recent years. However, in August, the bidding prices for high-carbon ferrochrome from major stainless steel mills fell, directly causing the first decline in overseas quotations for chrome ore this year. The price of South African 40-42% chrome concentrates dropped by $10/mt to $310/mt, with the shipment expected by September 15.

Summer is the traditional off-season for stainless steel consumption, and the profits of stainless steel mills have generally narrowed, leading to a decrease in production. In July, national stainless steel production fell to 3.14 million mt, reducing the demand for high-carbon ferrochrome and causing a backlog in the retail market. Due to the severe oversupply of high-carbon ferrochrome in the earlier period, the weakening demand led to continuous declines in high-carbon ferrochrome prices, with domestic high-carbon ferrochrome manufacturers generally facing losses and having low acceptance of high-priced raw materials. Meanwhile, the supply of chrome ore significantly increased, with imports in H1 rising sharply to 10.35 million mt, up 25.43% YoY. Domestic spot chrome ore prices have already shown signs of decline, and the August high-carbon ferrochrome bidding has become an opportunity for the synchronous decline in overseas chrome ore quotations.

However, with the upcoming peak consumption season of "Golden September and Silver October," domestic high-carbon ferrochrome production remained at a high level despite a slight decline. The demand for chrome ore was still strong, with the inventory-to-sales ratio of chrome ore falling below 1.4. Additionally, the high costs of chrome ore arriving at ports in the near future have somewhat supported chrome ore prices. Therefore, it is expected that the room for a decline in chrome ore prices in the short term is limited.