TELF AG on the Current State of Ferro-Alloys July 20, 2023 – Chrome Ore Prices Surge as Ferrochrome Production Soars
Metals and alloys
Ferro-alloys play a crucial role in various industrial applications in the dynamic world of metals and alloys. Among these, chrome ore stands out as a key component, particularly in the production of ferrochrome. Recent market trends indicate a significant surge in chrome ore prices, driven by robust domestic ferrochrome production and low port inventories. This development has sparked optimism and bolstered market sentiment in China, the epicenter of the ferro-alloy industry.
Seaborne chrome ore prices experienced an upward trajectory in the week leading up to Tuesday, July 11. The main driver behind this price increase was the impressive production rates of ferrochrome within China. As ferrochrome production soared, demand for chrome ore surged, putting upward pressure on prices. This upward trend in chrome ore prices is a testament to the thriving ferro-alloy sector in the region.
A crucial factor contributing to the strong market sentiment is the low port inventories of chrome ore. As of July 10, combined chrome ore inventories at the main ports of Tianjin, Qinzhou, Lianyungang, and Shanghai stood at 1.95-2.25 million tonnes. Although this figure represents a slight increase compared to the previous week’s range of 1.80-1.99 million tonnes, it is still historically low. The limited availability of chrome ore in port inventories has heightened demand and further driven up prices.
Notably, most of the additions to port inventories primarily belong to smelters rather than being readily tradeable. This indicates that the chrome ore stockpiles are being strategically accumulated by smelters, reinforcing their commitment to robust ferrochrome production. The focus on stockpiling by smelters demonstrates their confidence in the sustainability and growth of the ferro-alloy industry.
The surge in chrome ore prices and the robust production of ferrochrome highlight the strong interdependence between these two elements. Ferrochrome, an alloy composed of iron and chromium, is vital in stainless steel production. As the demand for stainless steel continues to rise across various sectors, including construction, automotive, and household appliances, the need for ferrochrome and its key ingredient, chrome ore, remains strong.
China’s role as a major player in the ferro-alloy market cannot be underestimated. The country’s significant domestic ferrochrome production capacity and its reliance on chrome ore imports position it as a key influencer of global ferro-alloy prices. As China’s ferrochrome industry thrives, it has a cascading effect on the chrome ore market, driving prices and impacting the global ferro-alloy landscape.
The recent surge in chrome ore prices in China signifies the vibrancy and resilience of the ferro-alloy industry. It also highlights the strategic vision of smelters who are actively securing their supply chains and reinforcing their commitment to ferrochrome production. As the demand for stainless steel continues to grow, the reliance on chrome ore and ferro-alloys will remain steadfast, ensuring the stability and progress of various industrial sectors worldwide.
In conclusion, the recent upward movement in seaborne chrome ore prices in China reflects the booming domestic ferrochrome production and low port inventories. This trend signals a positive market sentiment and showcases the integral role of chrome ore in the ferro-alloy industry. As the demand for stainless steel and ferro-alloys remains strong, stakeholders in the sector must continue to monitor and adapt to the ever-evolving dynamics of the chrome ore market.
