China LC & MC Ferrochrome Market: Prices Rise on Cost Push, Margins Remain Under Pressure

In early to mid-December, low-carbon (LC) and medium-carbon (MC) ferrochrome producers in southern China were the first to raise offer prices amid mounting cost pressures. Price increases subsequently spread to northern production regions, lifting the overall market level.

Current Market Prices

According to market sources, mainstream spot prices for LC and MC ferrochrome (CNY/ton, 60% Cr basis, cash, ex-works, tax included) are assessed as follows:

LC Ferrochrome C0.25

• Sichuan: 12,800–12,900
• Jiangsu: 13,100–13,200
• Inner Mongolia: 12,700–12,900
• Shanxi: 12,800–12,900

Micro-carbon Ferrochrome C0.10

• Sichuan: 13,000–13,100
• Jiangsu: 13,300–13,400
• Inner Mongolia: 12,900–13,100
• Shanxi: 13,000–13,100

Micro-carbon Ferrochrome C0.06

• Sichuan: 13,300–13,400
• Jiangsu: 13,500–13,600
• Inner Mongolia: 13,100–13,300
• Shanxi: 13,200–13,300

Cost Pressure Forces Silicon-Chromium Alloy Output Cuts

Market participants noted that silicon-chromium alloy producers faced severe cost inversions in December due to a combination of factors:

• A sharp decline in silicon-chromium alloy prices earlier
• Significant electricity price increases during Sichuan’s dry season
• Rising prices of high-carbon ferrochrome

As a result, multiple plants suspended operations, leading to a month-on-month output reduction of around 6,000 tons in December.

Currently operating silicon-chromium alloy plants are quoting 8,300–8,500 yuan/ton, rebounding by nearly 300 yuan/ton from previous lows.

Chrome Ore Prices Firm, Negotiation Room Limited

Chrome ore prices, another key cost component, have also strengthened. Zimbabwean chrome concentrate prices have risen by approximately 3 yuan/dmtu since mid-month.

• Zimbabwe chrome concentrate 50–52%: ~58 yuan/dmtu

Market sources reported limited room for negotiation, further tightening producers’ cost structures.

Price Gains Offset by Costs, Profits Still Compressed

Although LC and MC ferrochrome prices have rebounded by 300–400 yuan/ton (60% basis) in recent weeks, most of the increase has been absorbed by higher input costs. As a result, smelters’ profit margins have not materially improved.

Southern China continues to see production cuts and shutdowns, with LC and MC ferrochrome output in the region down by more than 2,000 tons month on month.

January Steel Mill Tenders and Pre-Holiday Stocking Support Prices

With major domestic steelmakers entering January procurement tenders, the latest bidding prices for D25 ferrochrome were heard at:

• 13,100–13,200 yuan/ton (60% basis, processed blocks, tax included, delivered)

This represents a month-on-month increase of over 300 yuan/ton, broadly in line with spot market gains.

Driven by rising prices, traders have stepped up stocking activity ahead of the Lunar New Year, leading to a short-term concentration of demand. Combined with reduced supply, this has provided solid near-term support to LC and MC ferrochrome prices.