Merafe Resources released the Q2 2023 European ferrochrome benchmark price at US$1.72/lb Cr, up 15.4% q-on-q. 

The margins for ferrochrome producers are being squeezed from both sides. Chromium ore prices have been soaring in recent months with low port inventories in China and logistic constraints for the ore source boosting price upsides. Stainless steel demand in China has been slow to materialise after the Chinese New Year and European steel producers are still in challenging waters from energy costs.

The increase in the European ferrochrome benchmark price relieves the pressure from the upstream ore side for ferrochrome producers and transfers the cost to the stainless steel producers. This move is in line with industry consensus expectations that stainless steel should recover strongly from Q2 onwards. Ferrochrome prices in China are still below the domestic industry costs and will have to move to support a ramp-up in output when stainless steel demand returns.