Merafe Resources announced the Q4 European ferrochrome benchmark price yesterday, quoting US$1.49/lb Cr down 17.2% q-on-q. Last week, Chinese stainless steel giant Tsingshan raised its ferrochrome tender prices by RMB300/t m-on-m to US$0.97/lb Cr.

Ferrochrome prices in China have been on a steady decline since monthly average prices peaked in April 2022, while European prices held elevated levels for longer through to June 2022 before starting their accelerating decline. The ferrochrome market had tightened over 2021, with high prices adding relief to narrow margins since H2 2019, but the drop in prices comes in the wake of bleak global economics and weakening demand from stainless steel mills.

European prices are dropping rapidly as stainless steel plants close amidst rising energy prices. South African ferrochrome producers were able to leverage higher premiums in Europe over much of 2022 but with the quarter ahead looking to be the hardest hit in Europe, that premium is expected to quickly erode further. Project Blue expects relief from stainless steel mills only to come in Q1 2023 from China, but a strong US dollar will help carry some of the cost pressure for South African smelters in the meantime.