Key drivers of the global ferrochrome market: ICDA 2024 insights

The International Chromium Development Association (ICDA) hosted a two-day conference in Hong Kong, on 22-23 May 2024. Prominent speakers discussed topics such as chrome ore, ferro chrome, nickel, stainless steel, and related subjects, covering everything from the macro-economy to the Chinese chrome and stainless steel industry, as well as global perspectives. The seminar also explored the future outlook of the chromium industry. BigMint is honored to share the key takeaways from this summit.

The conference began with a welcoming address from Zelda du Preez, President of ICDA and representative of Rand York Minerals. Following this, Shaun Rein from CMR, PR China, delivered a presentation on China's new economic drivers for growth. He discussed the economic impacts of Covid-19 and outlined projections for the post-pandemic decade in China. According to him, despite China's challenging macroeconomic situation currently, opportunities of the chromium value chain remain bright.

Prof. Ba Shusong, Chief China Economist and Managing Director at HKEX , discussed the 5th Industrial Transfer, emphasising its implications for China and the commodities market. He outlined five cycles of industrial transfer, highlighting the shift from labour-intensive to capital and skill-intensive industries, culminating in regional cooperation and sectoral upgrades. Hong Kong's evolution into an international financial center since 1980 has supported these transitions, marked by significant growth in listed companies and market capitalisation. The 5th cycle drives global economic transitions, with ML enterprises expanding internationally and developing domestically, aided by HKEX through fundraising, risk management tools, and RMB products. The restructuring of global supply chains post-pandemic emphasises production stability, regionalisation, and localisation, impacting commodity demand patterns.

Despite global economic challenges, China's growth-stabilising policies and robust demand for commodities, particularly oil, continue to drive market changes, with high-tech manufacturing and consumption-driven growth shaping future demand. The dual-carbon strategy also influences China's energy structure and related commodity demand.

Han Jianbiao of ZLJ Steel, PR China, discussed factors driving Chinese stainless steel demand and provided a market outlook for 2024. He analysed supply and demand dynamics in the stainless steel and nickel markets, noting that prices of 304 and 316 series stainless steel are influenced by the use of ferroalloys like FeNi and FeMo. He highlighted the increase in global primary nickel production, driven by Indonesia, and the shift towards refined nickel production. In China, the stainless steel industry remains the primary consumer of nickel, with growing demand from the new energy battery sector. He also emphasised the role of chrome, particularly in the 413 series stainless steel, where high-carbon ferrochrome (HC FeCr) is extensively used. Challenges faced by FeNi producers were discussed, alongside the expected growth in stainless steel production in China and Indonesia. Additionally, he noted the importance of chrome in stainless steel production, impacting both costs and market trends.

In "Analysing Shifts in the Chromium Market: Navigating Future Trajectories," Wen Luo of Ferroalloynet, PR China , underscores pivotal transformations. Over 2018-2023, global HC ferrochrome production surged by 2.16 million tonnes (mnt), led by China's remarkable 97% contribution. Indonesia emerged as a significant player, escalating from 300,000 to 1.1 mnt capacity. Inner Mongolia solidified its dominance, reaching 7.36 mnt output in 2023. Production dynamics shifted towards large-scale, environmentally conscious operations, influenced by policies favouring green practices. Meanwhile, rising chrome ore prices juxtaposed with declining ferrochrome prices reshaped profit margins. With China's supply poised to surpass 11 mnt by 2024, the chromium market anticipates further evolution.

Markus Moll, Managing Director of Steel & Metals Market Research, delved into the dynamic landscape of stainless steel production from 2020 to 2024. In 2023, global stainless steel output reached approximately 57,190 thousand tonnes, with China being a pivotal contributor, producing around 34,800 thousand tonnes. Forecasts indicate a 2% increase in China's 2024 stainless production. Overall, stainless steel production is anticipated to escalate by 4% in 2024 compared to 2023, driven significantly by China, Indonesia and India, with India's production expected to surge by 14%.

Long-term analysis highlights the declining proportion of 400 series stainless steel due to limited applications, impacting the growth pace of the chrome industry. Moll outlined the shifting economic winds from headwinds in 2023, including inflation and market decline, to crosswinds in 2024, marked by decreased inflation and interest rates, alongside improved purchasing power despite market stagnation and moderate restocking.

Nishtha Mukerjee, GM operations at BigMint highlighted India's FeCr production is expected to increase to 1.9 mnt by CY30 versus 1.4 mnt in CY23. Out of this, domestic consumption will increase from 0.59 mnt in CY23 to 0.7 mnt in CY30. This would be on the back of India's stainless steel output which grew from 2.7 mnt in CY22 to 3.3 mnt in CY23. Going forward we expect India's stainless steel production to increase to over 6 mnt in CY30. Increased demand in several sectors, including railways, process industries, architecture, building and construction have supported increased stainless steel production in India.

Tanisha Schultz, Senior Analyst at ProjectBlue, presented on chromium in South Africa, emphasising key industry dynamics. Her presentation showed China's high carbon ferrochrome (FeCr) growth from 2010 to 2024, driven by South African ore exports, highlighting China's rising influence in the global FeCr market. The 2023 outlook for South African ores indicated fluctuations in stock changes, ore consumption, and imports, with a steady increase in exports projected through 2024. Additionally, the impact of PGM prices on UG2 production was examined, revealing stable chromium production despite declining PGM prices due to EV adoption.