Merafe Resources published a US$1.51/lb Cr price for the Q3 2023 European ferrochrome benchmark, dropping 12.2% compared to the Q2 price of US$1.72/lb Cr. 

The ferrochrome price has been boosted for several reasons lately, despite energy cost pressures falling off since 2022 and demand not recovering to the expected levels.

The first is related to high chromite ore prices. The majority of ores are sourced from South Africa, where logistic supply chain constraints have been central to domestic issues to get material to market. Port stocks in China dropped to just above one month of domestic demand in end-April and have remained below two months of available stock for much of the year, keeping ore prices high.

In addition, South African ferrochrome producers have sold increasing volumes to China, leveraging the availability of material due to weak European demand and the ability to undercut costs in China thanks to a weak South African rand. Not long ago, South African producers were straddling a cost line that threatened the sustainability of plants continuing to operate. For now, the cost opportunity of South African plants outweighs the load-shedding energy issues in the country.

The lowering of the European benchmark comes as some European ferrochrome producers have ramped up domestic ferrochrome production again.