Ferrochrome January review: cost-driven iron price rises steadily

In January, the price of high-carbon ferrochrome increased by 500 yuan/50 basis tons. News of power cuts and production cuts at the beginning of the month injected confidence into the market, and ferrochrome suppliers became more reluctant to sell. Then the price of chrome ore at the port began to rise, and the quotations of factories rose steadily until they reached the “9000 mark”. Affected by the spring holiday in the middle of the month, the ferrochromium consumer market closed and transactions were suspended, and the iron price remained unchanged. After the festival, the cost of resumption of the market once again pushed up the price of iron. With the increase in the rate of returning to work, the trading activities of ferrochromium gradually became active, and the price of iron rose again.

1. Imported Ferrochrome

In January, the price of high-carbon ferrochromium imported by the port rose by 600 yuan/50 basis tons, and the operation trend was basically consistent with that of domestic iron. The rise in the price of high-grade ferrochrome in the European market and the weakening of the US dollar exchange rate have stimulated foreign companies to increase futures quotations, and dealers have increased the cost of receiving goods. In recent days, due to delays in shipping schedules and reduced customs clearance efficiency due to holidays, the arrival of high-grade chromium at ports The current situation of tight supply of ferrochrome creates conditions for the rise of iron prices.

2. National Ferrochromium Production in January

According to website statistics, the national output of high-carbon ferrochrome in January 2023 was 511,800 tons, a decrease of 7,600 tons from December’s 519,400 tons, a month-on-month decrease of 1.46%, and a year-on-year decrease of 12.89% (the output in January 2022 was 587,500 tons).

According to website statistics, the national output of low-carbon ferrochrome in January 2023 was 42,200 tons, a decrease of 9,000 tons from 51,200 tons in December, a month-on-month decrease of 17.58%, and a year-on-year decrease of 18.06% (the output in January 2022 was 51,500 tons).

3. Micro carbon ferrochrome

In January, low carbon ferrochromium rose by 700 yuan/60 basis tons. Before the middle of the year, due to the approaching of the end of the year, retail market inquiries and purchase enthusiasm weakened, and there were only rigid demand purchase activities in the market. However, steel mills set prices higher than retail prices, which is the follow-up trend of iron prices It has made a good start, and most factories in the south have stopped production for maintenance, and the quotations continue to be strong. Returning after the festival, the prices of chromium ore and silicon chrome rose strongly, and the cost of low-carbon ferrochrome smelting rose significantly. Coupled with the steady release of downstream demand, retail prices rose rapidly and gradually moved closer to the level of steel bills.

4. The price of chrome ore is running strongly

In 2023, the chrome ore market will usher in a “good start” market. With the strengthening of the concentration of port inventory, alloy factories have increased demand for spot goods, which makes the spot transaction price of chrome ore increase by 2-7 yuan/ton. The market is improving, and futures inquiries The increase in the market also gave foreign chromium ore companies the confidence to continue to increase the price of ore. The futures have been raised by 10-20 US dollars / ton, and the upward trend is still maintained. In the post-holiday market, after a long period of stable operation, the mainstream chrome ore block has gradually become more cost-effective, and it has also attracted the attention of downstream factories. The increase in inquiries and purchases, coupled with the small port spot trade volume, has gradually shown a rise in the price of mainstream chrome ore blocks.

5. Tendering for steel mills

Tsingshan Group’s purchase price of high-carbon ferrochrome in January 2023 is 8695 yuan/50 basis ton (cash including tax to factory price), an increase of 500 yuan/50 basis ton from the previous month, and the receiving price at Tianjin Port is reduced by 150 yuan/50 basis ton. The deadline is before February 10, 2023. The purchase price of high-carbon ferrochrome in Shanxi Taigang in January 2023 is 8495 yuan/50 basis tons (cash including tax to the factory), which is 500 yuan/50 basis tons higher than the previous month, and the delivery date is before January 31, 2023. Baosteel Desheng’s purchase price of high-carbon ferrochrome in January 2023 is 8695 yuan/50 basis ton (tax-included ex-factory price), a month-on-month increase of 500 yuan/50 basis ton.

6. Stainless Steel Market

The price of stainless steel futures this month showed a fluctuating upward trend as a whole. After the New Year’s Day, some downstream factories started the Spring Festival holiday, the demand for stainless steel fell, and the market weakened. Then steel mills raised their prices under the influence of high costs, and futures and spot prices rose, because most of the downstream factories and traders have entered the Spring Festival holiday At the end of the month, traders began to return to the market, downstream factories gradually started operations, market expectations were favorable, stainless steel futures and spot prices rebounded, downstream enterprises have not yet fully started operations, demand is limited, and transactions are relatively deserted.

7. Forecast for next month

The price of ferrochrome purchases by mainstream steel mills in February all showed an increase, and the market direction was clear. The downstream purchases were carried out step by step. The level of downstream stocking varies, and the purchase prices of various companies may widen the gap. The subsequent increase in iron prices mainly depends on the actual follow-up of consumption after the Lantern Festival.


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