Ferro chrome is the raw material for producing stainless steel and special steel. Due to the shortage of chrome ore resources in China, chrome ore mainly depends on imports. Turkey is one of the major chromium producing countries. Affected by the earthquake, the export of local chromium ore is at a standstill. Is the supply of domestic chrome ore affected? Will the production and price of ferrochrome be affected?
Chromium Ore Storage Decline
According to the feedback from Tianjin Port on February 14, the import of chromium ore is generally stable, and the impact of the earthquake in Turkey on domestic supply is limited.
Tianjin Port is the port with the largest import volume of chrome ore in China. Since February 6, the amount of chrome ore arriving at the port in a week has been about 400,000 tons, which has remained basically stable. According to customs staff, more than 90% of my country’s chrome ore depends on imports. The imports are mainly from South Africa, Turkey, Zimbabwe, Pakistan, and other countries. South African mines have increased their market share due to their low prices. In 2022, my country’s chrome ore imports from South Africa will account for 82.1%, and Turkey will only account for 6.3%, and there will be chrome ore from Pakistan instead. Therefore, the impact of the Turkish earthquake on the supply of chrome ore is limited.
According to customs data, Tianjin Port imported about 1 million tons of chromium ore in January, and the import volume remained stable. Although the import volume of chromium ore has been relatively stable recently, due to the market recovery after the Spring Festival holiday, ferrochrome production enterprises have significantly increased their purchase of chromium ore, and the port inventory is at a low level. According to the person in charge of the port, the estimated daily delivery volume of the port is about 25,000 tons, and the peak daily delivery volume of chrome ore has reached 35,000 tons recently. On February 10, the total inventory of chrome ore ports was 2.104 million tons, which was at a low level compared with the total inventory of about 4 million tons in the same period of 2021.
The price of mainstream chrome ore rose by nearly 60% year-on-year due to rising demand and reduced supply
Domestic Demand for Ferrochrome Increases
In January 2023, China’s stainless steel brand output was 2.38 million tons, and the output in February was 2.91 million tons, and the demand in February increased by 530,000 tons. Ferrochromium sales were up 15% in February compared to January. The increase in the purchase quantity drives up the price of ferrochrome. The bidding price of domestic ferrochrome in January is 9000RMB/ton, and the bidding price of ferrochrome in February is 9450RMB/ton
The price of high-grade ferrochrome in Europe continued to rise, among which the price of high-grade chromium within C6-8.5%, Cr65-70%, and Si1.5% rose to 2.48-2.73 US dollars per pound of chromium. The flow of high-quality resources such as Harbin Iron and Steel Co., Ltd. The distribution volume of dealers other than Changxie in the market has shrunk.
C6-8.5%, Cr60-64.9%, the price of high carbon chromium within Si3% has also risen to 1.16-1.25 US dollars per pound of chromium, and the price of ferrochrome in India has risen to 120,000 rupees per ton, and India’s willingness to export ferrochrome to the Chinese market It is not as urgent as before, and low-cost resources are hard to find.
The price of low-carbon ferrochrome continues to rise in the short term, with raw material prices rising, downstream demand increasing, and foreign orders increasing. The long-term price of low-carbon ferrochrome is stable.