1. Market analysis of ferrochrome industry in China
China is the largest producer of ferrochrome in the world, but the capacity utilization rate is low.
According to Ferroalloy Online statistics, the total production capacity of high-carbon ferrochrome in China in 2020 will be 12.858 million tons, an increase of 585,200 tons from 12.2728 million tons in 2019. Among them, Inner Mongolia’s production capacity is about 5.85 million tons, accounting for 47%, nearly half of the country; followed by Sichuan and Shanxi, with production capacity reaching 1.07 and 1.03 million tons respectively. According to ferroalloy online statistics, it is estimated that in 2021, the country will add about 660,000 tons of high-carbon ferrochrome production capacity.
Chart 1: Domestic production capacity of high carbon ferrochrome
Although domestic production capacity of ferrochrome is relatively high, the capacity utilization rate is low. According to ferroalloy online statistics, the total output of high-carbon ferrochrome in the country in 2020 is 5.6913 million tons, a year-on-year decrease of 5.53% (the total output in 2019 is 6.0245 million tons). In 2020, the national low-carbon ferrochrome output totaled 537,500 tons, a year-on-year decrease of 18,000 tons, or 3.24%, (the total output in 2019 was 555,500 tons).
2. The overall concentration of China’s ferrochrome industry is low
In 2020, the cumulative output of high-carbon ferrochrome produced by the top ten enterprises will be 3.1437 million tons, accounting for 55.24% of the total output. Overall, the industry concentration is relatively low.
Chart 2: Top 10 National High Carbon Ferrochrome Production Enterprises in 2020
3. China’s import of ferrochrome increased slightly
In 2020, China will import 3.07 million tons of ferrochrome, a year-on-year 0.4%; export 55,000 tons of ferrochrome, a year-on-year 68.3%. From the perspective of imported product categories, it is mainly high-carbon ferrochrome, which will account for 100% in 2020. From the perspective of importing countries, in 2020, 1.65 million tons will be imported from South Africa, accounting for 54%; 874,000 tons will be imported from Kazakhstan, accounting for 28.5%; 337,000 tons will be imported from India, accounting for 11%; 11% will be imported from Zimbabwe million tons, accounting for 3.4%. From 2004 to 2020, the compound growth rate of ferrochrome imports was 15.33%, exceeding the level of 12.6% compound growth rate of chrome ore imports. Overall, the growth momentum of ferrochromium imports exceeds that of chromium ore, which also reflects the changes in China’s import structure of chromium series products.
Chart 3: Import and export volume of ferrochrome in China (10,000 tons)
4. Both domestic and imported ferrochrome prices have decreased
In 2020, the price of domestic high-carbon ferrochrome is 6,014 yuan/ton, a year-on-year -7.4%; the price of domestic low-carbon ferrochrome is 10,302 yuan/ton, a year-on-year -11.4%. Overseas imported high-carbon ferrochrome prices in 2020: South Africa 6127 yuan/basis ton, -8.9% year-on-year; Kazakhstan 7170 yuan/basis ton, year-on-year -11%; India 6062 yuan/basis ton, year-on-year -9.5%; Zimbabwe 6044 Yuan/basis ton, -9.8% year-on-year.