December 2023 saw national high-carbon ferrochrome output in China dip to 626,900 mt, down 5.16% MoM, but up 22.08% YoY. Inner Mongolia produced 443,400 mt, down 0.36% MoM, while Sichuan's output fell sharply by 63.16% to 10,500 mt. In December, steel mills’ bid prices fell by 200 yuan/mt (Cr50%), pushing all domestic ferrochrome producers under long-term contracts into negative margins. Sichuan's dry season caused power shortages and ferrochrome factory shutdowns. In Inner Mongolia, less severe negative margins, long-term contracts, and delivery pressures meant a limited drop in ferrochrome supply.
January's high-carbon ferrochrome production is expected at 603,000 mt, down MoM. Bid prices from steel mills were stable. Due to strong stainless steel orders, and pre-holiday stocking, ferrochrome demand has firmed, tightening retail supply. Yet, with market supply still relaxed, price hikes are unlikely, keeping ferrochrome factories in negative margins and possibly reducing their operating rates further in January.
