As a supplier with 17 years of experience in the ferrochrome industry, Zhenxin Metallurgical Materials Co., Ltd. continues to pay attention to the impact of geopolitics on the global supply chain. The easing of the conflict between Russia and Ukraine has attracted widespread attention. This article will deeply analyze the potential impact of the changing situation on ferrochrome prices to help customers seize procurement opportunities.
What happened during the conflict?
Supply chain shortage
Russia and Ukraine are like a “highway” for the transportation of chromium iron. The war has led to the closure of the Black Sea ports – just like the closure of the highway, European customers cannot receive the goods, and the price will soar by more than 20% in 2022 (equivalent to an additional cost of nearly 2,000 yuan per ton).
Electricity prices in Europe have risen.
Electricity and gas prices in Europe have skyrocketed, and the cost of producing ferrochrome has doubled. The cost is too high, and many small factories have stopped production directly, and the market shortage is even more serious.
Several major changes in the ceasefire in the Russia-Ukraine conflict
- Black Sea ports are gradually restarting, and it is expected that the capacity will be restored to 70% of the pre-war capacity within 6 months
- The previous backlog of goods may arrive in batches, and short-term Ferrochrome prices may fluctuate
- Electricity costs have dropped by half from the highest point, but the environmental tax is coming again (similar to the “carbon emission toll”),This has put European ferrochrome plants under tremendous pressure again after they had just eased off a bit.
- Large ferrochrome factories recover quickly, small factories may be permanently closed, and high-quality ferrochrome sources are more sought-after
- Russian ferrochrome will return to the market, but some countries may restrict purchases (just like some supermarkets do not allow the sale of imported goods)
- Smart buyers are looking for “spare tires”, such as the mining areas in Türkiye and South Africa that we cooperate with.
Impact of the end of the Russian-Ukrainian conflict on steel
After the end of the Russian-Ukrainian conflict, Ukraine began to rebuild its infrastructure, such as real estate, transportation, and automobile industries. This has led to an increasing demand for steel.
It is expected that the demand for steel in 2025, including stainless steel, high-speed steel, heat-resistant steel, etc., will double that of 2024, with Ukraine being the main export destination.
Therefore, with the increasing demand for steel and stainless steel, the demand for ferroalloys, such as ferrochrome, ferromanganese and ferrosilicon, will also increase sharply.Therefore, in 2025, due to the end of the war, the price of ferrochrome will become higher and higher. With the start of Ukraine’s infrastructure construction, the demand for steel and ferroalloys will increase, and the price of ferrochrome will also increase significantly.
Impact of the end of the Russian-Ukrainian conflict on ferrochrome prices
Ferrochrome is an important alloying additive in the steel industry. Increase or decrease in steel demand will also affect ferrochrome alloys.
