Taiyuan Iron and Steel Corporation (Tisco), a leading Chinese steelmaker, has announced a significant price reduction for high-carbon ferro-chrome. The company has lowered its November tender price by 150 yuan per tonne ($21.10 per tonne) in response to ongoing market challenges. These include concerns over oversupply and weak demand in the stainless steel sector.
Price Reduction in Response to Market Conditions
Effective from October 17, 2024, Tisco’s new bid price for high-carbon ferro-chrome stands at 7,945 yuan per tonne, or approximately $1.01 per pound, on a 50% chromium basis, inclusive of VAT. This price cut reflects the current oversupply situation in the ferro-chrome market. Industry experts believe that Tisco’s decision may prompt other industry leaders, such as Tsingshan, to follow suit and lower their prices in line with market trends.
Surge in Production and Declining Stainless Steel Output
China’s high-carbon ferro-chrome production surged to 5.77 million tonnes from January to August 2024. However, the apparent demand reached 8.74 million tonnes, while actual alloy demand was just 8.11 million tonnes. This led to an oversupply of approximately 630,700 tonnes. Furthermore, the demand for stainless steel has declined, with a 2-2.5% drop in production from August to September 2024, and a 1% decrease expected in October. These factors have resulted in lower ferro-chrome demand, prompting price reductions across the market.
Ongoing Market Pressures and Production Maintenance
Alongside the weak stainless steel demand, maintenance shutdowns at alloy producers in Inner Mongolia have contributed to the market’s oversupply issues. Tisco and other major players are likely to continue adjusting prices as they seek to balance supply and demand. Despite these efforts, market conditions remain uncertain, with oversupply still a significant concern for the ferro-chrome sector.
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