Mumbai, 03 Dec (Commoditiescontrol): In November, Chinese high-carbon ferrochrome prices extended their decline, with procurement rates from major stainless steel mills diverging for the first time in two years. Taiyuan Iron & Steel Group Co., Ltd. (TISCO) reduced its procurement price by 150 yuan/mt (50% metal content) to 7,945 yuan/mt, while Tsingshan Holding Group lowered its price by 200 yuan/mt to 8,095 yuan/mt. This narrowed the price gap between northern and southern mills to just 150 yuan/mt. Meanwhile, declining chrome ore prices further weakened cost support for ferrochrome production.
Stainless steel mills, holding sufficient ferrochrome inventories, showed little buying interest, prompting manufacturers to reduce retail prices closer to procurement levels. However, this adjustment intensified losses for domestic producers, particularly in southern China, where production halts and cuts were reported. Northern producers, benefiting from lower costs and fixed electricity contracts, maintained higher operating rates, sustaining an oversupplied market.
December Prices Deepen the Decline
Year-end seasonality and weak profitability for stainless steel mills added to the downward pressure on ferrochrome prices. Both Taiyuan Iron & Steel Group Co., Ltd. (TISCO) and Tsingshan Holding Group preemptively announced December procurement prices that fell short of market expectations. TISCO reduced its price by 300 yuan/mt to 7,645 yuan/mt, while Tsingshan cut its rate by a steeper 700 yuan/mt to 7,395 yuan/mt, reversing the trend in procurement pricing.
This move widened the gap between retail and procurement prices, exacerbating financial pressure on ferrochrome manufacturers. With imported chrome ore costs exceeding $300, producers faced significant losses, leading to weak retail activity and a near-halt in transactions.
Market Outlook: Persistent Weakness Ahead
Ferrochrome producers are unlikely to recover from losses in the near term, as production halts and cuts are expected to deepen in December. Lower output will reduce raw material demand, exerting additional pressure on chrome ore prices. This, in turn, will sustain the weak pricing environment for ferrochrome.
While expectations for production cuts may accelerate supply-demand rebalancing, the market outlook remains bearish. Oversupply and sluggish transactions are likely to define the ferrochrome market through the end of the year.
(By Commoditiescontrol Bureau: 09820130172)
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