Chrome Ore Market Review for May and Outlook for June [SMM Analysis]

Chrome ore prices rose in May. As of May 28, the price of South African 40-42% chrome ore concentrates averaged 62.5 yuan/mtu. On May 28, the inventory of chrome ore at China’s ports decreased to 2.6317 million tons, with 2.1247 million mt at Tianjin Port. In May, high-carbon ferrochrome bid prices remained flat, making ferrochrome manufacturers maintain high production enthusiasm. In addition, with the rainy season in South China, domestic ferrochrome production further increased, boosting demand for chrome ores. Although the expected port arrivals of chrome ore are not low, the increase in demand is greater, leading to a continuous decline in port inventories in May. Overseas futures prices also rose, driving up spot chrome ore prices.

According to SMM, the shipments from major global ports reached 2.3684 million mt by May 26. According to domestic shipping reports, the expected arrivals of chrome ores at Tianjin Port by June 25 are approximately 929,100 mt. Chrome ore prices continued to run strongly, with spot prices also climbing driven by rising overseas futures prices. The shortage of chrome ore was not as severe as expected. Consistently high bidding prices led to high operating rates at domestic high-carbon ferrochrome plants, pushing chrome ore demand to historical peaks, causing a supply deficit. In the current high-carbon ferrochrome market, although retail supply is slightly tight and market prices stay at relatively high levels, high-carbon ferrochrome still shows a clear surplus trend. It remains uncertain whether high bidding prices for ferrochrome can be maintained during the off-season. Meanwhile, with the continuous rise in chrome ore prices, the profits of high-carbon ferrochrome manufacturers were squeezed.