Tisco Reduces November High-Carbon Ferro-Chrome Bid Price Amid Surplus Concerns

Northern China’s state-owned steelmaker, Taiyuan Iron and Steel (Tisco), has lowered its tender procurement price for high-carbon ferro-chrome for November delivery. This move reflects a response to oversupply issues and muted demand in the stainless steel sector.

Tender Price Adjustment

Tisco reduced its November tender price on October 17 by 150 yuan/t ($21.10/t) compared to October, setting the price at Yn7,945/t on a 50% chromium basis. This price, equivalent to Yn15.89/kg ($1.01/lb) for contained chromium, includes 13% value-added tax (VAT) and is payable in cash, with shipments scheduled for delivery by December 5.

Market participants suggest that excess supply of high-carbon ferro-chrome has driven Tisco to lower its bid price. There is also speculation that Tsingshan, China’s largest stainless steel producer, may follow suit, with a potential adjustment to Yn8,145/t or Yn16.29/kg ($1.04/lb) for contained chromium.

Oversupply Challenges

From January to August 2024, China’s high-carbon ferro-chrome production reached 5.77 million tonnes, while apparent demand, including imports, totaled 8.74 million tonnes. However, actual alloy demand was only 8.11 million tonnes, leading to a supply surplus of 630,700 tonnes, according to Hunan-based steel mill estimates.

Falling Demand in the Stainless Steel Sector

Stainless steel output in China dropped by 2-2.5% from August to September, with October’s production expected to remain flat or decline by 1% compared to September. This decline has directly impacted ferro-chrome demand, causing a 1% drop in high-carbon ferro-chrome production in September compared to August. October production is expected to decrease further as alloy producers in Inner Mongolia began maintenance in response to falling prices.

Outlook

With stainless steel demand muted and high-carbon ferro-chrome production constrained by maintenance, market sentiment remains bearish. The continued adjustments by major players like Tisco and Tsingshan will be closely watched as the market seeks balance amid persistent oversupply.