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ferrochrome prices analysis

ferrochrome prices analysis

ferrochrome prices analysis

Anyang Weiyuan Alloy provides professional ferrochrome prices information, high-quality products, and excellent delivery services.


Market Details

ferrochrome prices market analysis

As one of the main raw materials for the production of stainless steel, ferrochrome is more sensitive to the stainless steel market. However, it is worth noting that while stainless steel prices have fallen recently, ferrochromium prices have shown an upward trend against the wind. Ferrochromium prices run counter to those of stainless steel, mainly because of the increasingly severe supply and demand issues.

Starting from the fourth quarter, iron plants began to have production suspensions and production reduction problems. After entering December, due to weather effects and continued high cost pressure, ferrochromium production companies’ production suspensions and production reduction problems intensified. Problems on the supply and demand side are reflected in the market, and the downstream stainless steel market continues to be sluggish, which ultimately leads to a headwind rebound in ferrochromium prices, but transaction problems remain severe.

Raw material end: High dependence on foreign countries, and the downward trend of chrome ore prices is unclear

my country is not high in the ranking of global chromium ore reserves. However, because my country is the world’s largest stainless steel producer, this has led to a large demand for chromium ore in our country, which has led to a dependence on foreign chromium ore of over 75%. Among them, South Africa The proportion of mines is relatively high. Therefore, we take the price of chrome ore in South Africa as an example to judge the cost of ferrochrome production.

Since 2021, port chrome ore prices have maintained an upward trend. Although the growth rate has slowed down, the high price of chromium ore continues. Zhuochuang Information data shows that as of December 2023, the price of chromium ore (40%-42%) in major domestic ports is 58-60 yuan/ton unit, an increase of 8.5 yuan/ton unit compared with the end of 2022, an increase of 16.83%, compared with At the beginning of 2021, it rose by 28 yuan/ton, an increase of 90.32%.

The continued rise in chromium ore prices has caused a continued increase in the production costs of ferrochrome manufacturers, which is also the main reason for the suspension and production reduction of iron plants starting in the fourth quarter of 2023.


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Product side: Ferrochromium production costs are upside down and supply is reduced to support prices

As the price of chromium ore rises, the cost of ferrochrome continues to rise. However, the rate of increase in ferrochromium prices is limited by the downstream stainless steel market. In the end, some ferrochromium companies that survived in the cracks strategically suspended production, and the supply and demand issues were balanced again. According to research by Zhuochuang Information, currently less than 50% of ferrochromium production enterprises in Southwest China and Central China are operating, and less than 70% are operating in North China.

The overall trend of high-carbon ferrochromium prices has tended to be stable. Unlike the rapidly rising chromium ore prices, ferrochromium, which is limited by the restrictions of the stainless steel industry, fell immediately after a brief surge in 2021, and finally entered 7,000-10,000 yuan/50 basis tons. Fluctuate within a large range.

As of mid-December 2023, the price of domestic high-carbon ferrochrome is 8,500-8,900 yuan/50 basis tons, a decrease of 100 yuan/50 basis tons from the end of 2022, a decrease of 1.14%, and an increase of 300 yuan/ton from the beginning of 2021. is 3.57%. Overall, ferrochrome prices have failed to effectively keep up with the rise in chrome ore, and it is gradually becoming more difficult for iron plants to survive.

ferrochrome prices

ferrochrome prices trend

Downstream end: Stainless steel market is sluggish, steel mills reduce production and restrict ferrochrome

As the most important downstream consumer area of ferrochromium, the stainless steel market has been under continuous pressure from the global economic environment in recent years, as well as the overcapacity problem caused by the continuous increase in newly built/commissioned production capacity at home and abroad. The overall start-up performance has not been optimistic. According to research data from Zhuochuang Information, the overall domestic stainless steel production capacity will remain at around 60% in 2023. It is worth noting that since the fourth quarter, the stainless steel industry has also taken production reduction measures. According to research by Zhuochuang Information, the current domestic stainless steel crude steel production capacity affected by production cuts is as high as 200,000 tons.

As shown in Figure 3, domestic stainless steel crude steel production has fallen to less than 2.5 million tons/month since September 2021, and has failed to achieve a breakthrough until October 2023. Zhuochuang Information data shows that domestic crude steel production from January to October 2023 was 23.4328 million tons, an increase of 800.9 thousand tons or 3.53% compared with the same period in 2022, and a decrease of 2.7736 million tons compared with the same period in 2021, a decrease of 10.58%.

On December 14, the Shanghai Stock Exchange issued the “Announcement on Approving the Registration of PT YONG WANG INDONESIA “YONG WANG” Brand Stainless Steel with our Exchange.” The reasonable return of Indonesian stainless steel will continue to put pressure on domestic stainless steel companies, and the probability of the start-up falling below 60% will increase. In other words, the demand for ferrochromium still faces great challenges.



To summarize the above, raw material prices remain high and demand-side production is insufficient, resulting in ferrochromium production companies reducing and suspending production after long-term cost inversion. The production reduction and suspension of ferrochromium production have led to tight supply in the ferrochromium market, and prices have rebounded against the wind within a small range.

However, returning to the supply and demand relationship of the ferrochrome market itself, there is a possibility of strategic transfer of stainless steel production capacity in the future, and the continued weakness on the demand side puts pressure on the market. Zhuochuang Information believes that this rebound in ferrochrome prices may be just a flash in the pan, and there is a risk that ferrochrome prices will continue to fall in the future. .

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Anyang WeiYuan Alloy Co., Ltd was established in 2011. We specialize in producing various ferroalloys for steel making, including Ferro Silicon, Ferro Chromium, Silicon Carbide, Ferro Manganese, Metal silicon price Calcium Silicon Barium, Metallurgy Nodulant, Silicon Calcium Powder, carbon raiser, etc.

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