16 March 2023 – Benchmark prices for EU ferrochrome are rising significantly. The key stainless steel raw material increases in price by more than 15% for Q2 2023. Key chrome suppliers and producers facing problems. Rating agency raises outlook for metals and mining sector to stable. And US steelmakers can’t meet demand.
EU ferrochrome benchmark prices for Q2 2023 rise significantly
The European benchmark prices for Ferrochrome for the second quarter of 2023 have increased significantly, as we expected. With a jump of more than 15%, they are up compared to the first quarter.
Price trend for 400 stainless steel series
Ferrochrome is integral to the composition of the 200, 300 and 400 stainless steel series, but significantly influences the prices of the 400 series and the widely used 409, 430, 439 and 441 and 444 stainless steel grades.
Our tip: Buy 400 series stainless steel now and replenish stocks before prices will rise!
Ferrochrome shortage in China
Ferrochrome prices have increased significantly since the end of 2020. They peaked in July 2021 due to scarce availability caused by energy shortages in China, but since then prices have held at an average level almost 60% higher than in 2020.
South Africa: Most important chrome supplier with difficulties
South Africa, which is considered by far the most important supplier of chrome ores and derivatives, has had a persistent problem with energy supply since October 2021. This is also hitting the important South African mining and metals industry hard and has led to a stagnation in the energy-intensive production of ferrochrome.
Is China sucking the chrome market dry?
China is by far the largest consumer of chrome ores and concentrates in the world. In 2022, the country had imported chrome products in the total export volume of South Africa. And was already barely able to meet its demand. At present, Chinese buyers seem to be already in the process of covering their needs again, especially on the South African market. This could become a problem for countries such as the United States, which have no ferrochrome production of their own and rely exclusively on imports.
Moodys predicts stable global metals and construction sector in 2023
Moody’s Investors Service has upgraded its global outlook for the metals and mining sector to stable as economic conditions in the U.S. and Europe have improved and the revival of China’s economy supports demand for base metals, steel and coal.
Rising demand expected for base metals
Base metals are showing signs of rising demand, while tight inventories are supporting their prices. Aluminum prices will remain above the historical average until early 2024, partly due to the growing role of aluminum in the clean energy sector.
Copper inventories extremely low
Historically low inventories of copper and ongoing supply disruptions in the industry will support the price.
Nickel demand to lead to supply deficits
Increasing growth in nickel demand from the electric vehicle market will lead to supply deficits in the coming years.
Zinc in short supply, high energy costs
Zinc prices are expected to be supported in 2023 by tight supply, low inventories and higher energy costs that could displace high-cost producers, Moody’s said.
Steel producers facing historically strong year?
Moody’s also believes steelmakers could generate historically strong profits and cash flows in 2023.
US steelmakers unable to meet demand
According to several media reports, U.S. steelmakers appear unable to meet demand in the U.S. market even in 2023. This is clearly supporting steel prices there. In addition to the already existing supply deficit, there will also be extensive maintenance work at many domestic steel mills in 2023, which is likely to exacerbate the shortage.
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.