China's ferro chrome output soars 24% y-o-y in Jan'24

In January, high-carbon ferro chrome (FeCr) production among the 176 Chinese smelters surveyed monthly by Mysteel reached 660,500 tonnes, (t) marking a 3.7% increase compared to the previous month and a significant surge of 23.7% compared to the corresponding period last year. These surveyed smelters, which represent 95% of China's ferrochrome smelting capacity, contributed to this production figure.

The rise in domestic ferro chrome output was mainly thanks to the upbeat production enthusiasm among smelters in North China's Inner Mongolia whose output totaled 470,200 tonnes in January, registering m-o-m rise of 6.1% and y-o-y jump of 52.7%, according to Mysteel's survey.

For example, a high-carbon ferro chrome smelter in Inner Mongolia put a submerged arc furnace (SAF) into production at the beginning of January and announced on 25 January to start another SAF of 48,000 kVA, which will bring the smelter's total ferro chrome production capacity to 32,000 tonnes per month after achieving designed capacity.

With the Chinese New Year holiday approaching, many downstream steelmakers in North China inquired for some ferro chrome supplies to fulfill their production needs during the holiday, which boosted the sentiment among smelters of the ferroalloy, Mysteel Global observed.

Plus, lower power costs further enhanced confidence among Inner Mongolia's smelters last month. Mysteel's daily survey showed that the electricity cost for smelting the ferro alloy in Inner Mongolia settled at Yuan 0.39/kWh ($0.05/kWh), falling by Yuan 0.005/kWh m-o-m.

However, most ferro chrome smelters in South China were reluctant to ramp up their production with their mounting losses and few orders from end-users over last month, as many steelmakers opted to suspend operations for maintenance during the traditional off-season for steel consumption during January and February.

Regarding other costs, China's chrome concentrates prices stayed largely flat recently, with the price of South Africa-origin 42% grade chrome concentrates at Tianjin port in North China registering an unchanged Yuan 58/dmtu on 6 February as the previous month, according to Mysteel's tracking.

The imported chrome ore stocks at the six major ports Mysteel tracks nationwide shed by a tiny 0.7% from 5 January to 2.71 million tonnes as of 2 February.

As such, according to Mysteel's assessment, the price of high-carbon ferro chrome with 55% Cr content in North China's Inner Mongolia, a key reference price in China's ferro chrome market, stayed unchanged at Yuan 8,600/t EXW and including the 13% VAT as of 6 February compared with a month before.

Note: This article has been written in accordance with an agreement between Mysteel Global and BigMint.