Outokumpu, the integrated Finnish stainless steel producer, and Zimasco, the Chinese-owned ferrochrome producer in Zimbabwe, have announced suspensions of ferrochrome furnaces at their flagship operations.

For Outokumpu, the closure is a delayed restart of one furnace after planned maintenance at its Tornio plant, the latest victim to surging energy prices in Europe. For Zimasco, the closure of two furnaces is in the face of global economic challenges unable to support higher costs along the supply chain.

The economic situation in China remains challenging, with the country’s zero-COVID policy continuing to disrupt the potential economic recovery. Beijing is making about US$1 trillion of government funds available for construction projects, but Project Blue expects demand support for raw material markets only to return after the Chinese New Year. In Europe, the war in Ukraine and the lingering economic impacts of COVID-19 underpin the continent’s energy challenges and inflation. Both situations are the key issues that are set to underpin a tough Q4 ahead.

In the longer term, the stainless steel industry should spell out positive growth trends for ferrochrome. However, the impacts of the current economic climate may accelerate some permanent closures of steel plants, while China continues to invest in growing its production base.