News release on May 29, 2026:
According to statistics from SMM, China's output of high-carbon ferrochrome in May 2026 rose by 5.09% month-on-month and 23.85% year-on-year. The growth was mainly driven by production increases in southern China. As regions entered the normal water flow period and wet season, hydropower prices in Sichuan, Yunnan and other areas plunged by nearly 30% month-on-month, greatly cutting production costs for ferrochrome. In addition, new production capacity was put into operation in Inner Mongolia in northern China. Coupled with a higher proportion of green power consumption, most manufacturers maintained regular operations, leading to a notable overall upward trend in ferrochrome output.
Looking ahead, ferrochrome output is expected to stay at a high level. On one hand, major steel mills including Tsingshan and TIS announced flat tender prices for June, underpinning short-term ferrochrome prices and boosting market sentiment. Meanwhile, downstream stainless steel producers posted steady profits and maintained high production schedules. Recent active procurement by steel mills will unlock rigid demand for ferrochrome, supporting manufacturers to keep normal production. On the other hand, declining production costs have eased the risk of losses for producers. As of May 29, 2026, national port inventories of chrome ore exceeded 4.3 million metric tons, hitting an all-time record high. Faced with mounting selling pressure, traders offered continuous price concessions, dragging down spot prices at ports and further lowering ferrochrome production costs, which secured profit margins for manufacturers.
It is noteworthy that the Ulanqab Ferroalloy Industry Association recently issued a circular on strengthening work safety at ferroalloy enterprises amid tight and unstable power supply. The ferroalloy sector has entered a seasonal power shortage period, which cannot be fully resolved in the short run. Some ferrochrome producers may face power rationing or outages, resulting in restricted operation or even full production halts. Overall, ferrochrome output is likely to fluctuate moderately. Market players shall keep track of the commissioning of new capacity and production plan adjustments among manufacturers.
