Global ferro chrome trade contracts in CY'25 amid South African supply disruptions, weak demand

• South Africa's exports halve as high power tariffs force smelter shutdowns
  
  
• Global stainless steel output rises 2% y-o-y in CY'25 against 7% in CY'24
  
  
• China's benchmark prices fall 8% y-o-y, pressuring exporters margins
  
  

Morning Brief: Global ferro chrome trade volumes contracted sharply by 26% y-o-y to 5.38 million tonnes (mnt) in CY'25 from 7.29 mnt in CY'24, as production disruptions in South Africa coincided with slower stainless steel growth, weaker Chinese import demand, and falling benchmark prices.

According to data cited in Merafe's annual report, global ferro chrome production fell 7% y-o-y to 15.9 mnt in CY'25 from 17.1 mnt a year earlier. Demand, however, increased marginally by 2.5% to 16.4 mnt, although growth slowed from the 5% uptick recorded in CY'24.

Factors influencing global ferro chrome trade in CY'25

South African exports halve amid production cuts: South Africa, the world's largest ferro chrome exporter, recorded a 51% y-o-y drop in shipments to 1.77 mnt in CY'25, as soaring electricity tariffs, weak margins, and subdued stainless steel demand forced widespread smelter shutdowns.

The sharp decline reinforced growing concerns over South Africa's long-term competitiveness in ferro chrome production, particularly against Chinese smelters benefiting from lower power costs and expanding domestic capacity.

Electricity remains one of the largest cost components in ferro chrome production, accounting for an estimated 35-45% of total smelting costs. Repeated electricity tariff hikes over recent years have significantly eroded the competitiveness of South African producers and accelerated capacity curtailments.

Among the largest producers, Glencore's ferro chrome output dropped 63% y-o-y to 436,000 tonnes (t) during CY'25 following the suspension of operations at its Boshoek and Wonderkop smelters in Rustenburg in May and June last year.

Merafe also reported a 63% y-o-y decline in production from its Glencore joint venture to 112,000 t in CY'25 due to prolonged suspension of smelting operations under unfavourable market conditions.

Together, the Glencore-Merafe operations represent installed ferro chrome capacity of around 2.3 mnt, highlighting the scale of idled production in South Africa.

Besides rising electricity tariffs, South African producers also faced persistent logistics bottlenecks, which further affected operations.

Slower stainless steel growth weighs on ferro chrome demand: Global stainless steel production slowed, pressuring ferro chrome demand.

According to worldstainless data, global stainless steel melt shop production increased only 2.1% y-o-y to 64.2 mnt in CY'25, compared with growth of 7% in CY'24 and 4.6% in CY'23.

The slowdown reflected weaker industrial activity, softer construction demand, and cautious end-user buying.

China reduces ferro chrome imports amid supply disruptions: China's ferro chrome imports declined 33% y-o-y to 2.46 mnt in CY'25 amid South African supply disruptions, rising ferro chrome output, and slower stainless steel production growth.

China's ferro chrome production increased marginally by around 1% y-o-y to 8.65 mnt in CY'25, following a sharp 20% rise in CY'24. Although growth moderated, the trend reflects sustained domestic smelting expansion.

At the same time, China's stainless steel production growth slowed to 3.6% in CY'25 from 7.5% in CY'24, reducing procurement requirements for imported ferro chrome.

Meanwhile, China's chrome ore imports rose 13% y-o-y to around 24 mnt in CY'25, while imports from South Africa increased 15% to 19.57 mnt.

The divergence between falling ferro chrome imports and rising chrome ore imports indicates a structural shift in trade patterns, with China increasingly importing raw material and undertaking value-added ferro chrome production domestically.

Benchmark prices weaken, squeezing exporter margins: Average monthly tender prices set by Tsingshan Holding Group, China's largest stainless steel producer, declined around 8% y-o-y to RMB 7,900/t ($1,144/t) in CY'25 from RMB 8,600/t ($1,245/t) in CY'24.

Weaker demand conditions and rising Chinese domestic production pressured benchmark ferro chrome prices and compressed exporter margins across major supplying regions.

India's exports decline amid lower realisations: India's ferro chrome exports fell 14% y-o-y to 0.48 mnt in CY'25 as weaker Chinese demand and lower prices reduced export realisations.

China, the largest buyer of Indian ferro chrome, reduced imports from India by nearly 22% y-o-y to 0.14 mnt from 0.18 mnt in CY'24.

Spot export offers from India to China declined around 7.4% y-o-y to 88 cents/lb CNF China from 95 cents/lb a year earlier.

Average export prices to Japan fell to 94.75 cents/lb in CY'25 from 102.73 cents/lb in CY'24, while prices to South Korea declined to 92.35 cents/lb from 99.5 cents/lb.

Weak margins also affected domestic production. Indias ferro chrome output declined 5% y-o-y to 1.39 mnt in CY'25 as several producers reduced operating rates or undertook maintenance shutdowns.

Kazakhstan's exports fall moderately: Kazakhstans exports also declined during CY'25, although the drop was relatively moderate at 5% y-o-y.

Kazakhstan's production base remained relatively stable, and producers largely focused on maintaining long-term contractual supply arrangements rather than pursuing aggressive spot exports amid volatile market conditions.

Zimbabwe gains market share: In contrast to the broader downturn, Zimbabwe emerged as one of the few countries to register export growth during CY'25.

The country's ferro chrome exports increased 12% y-o-y to 0.45 mnt, supported by government policies favouring value-added ferro chrome production over raw chrome ore exports. The commissioning of new ferro chrome capacity also boosted exports.

Notably, in June 2025, the Zimbabwe government had stated that all new chrome ore mining rights exceeding 100 hectares must be linked to plans for ferro chrome smelting capacity expansion or construction.

Outlook

BigMint expects global ferro chrome trade volumes to recover gradually in CY'26 if discounted electricity tariffs in South Africa support the restart of idled smelting capacity.

Additionally, South Africa is considering stricter export regulations on chrome ore, including mandatory export approvals, tighter controls on illegal mining, and a proposed 25% export tax on unprocessed ore. These measures may indirectly support ferro chrome shipments by encouraging greater domestic smelting.

At the same time, China's expanding domestic ferro chrome industry remains a major long-term risk for exporters. Chinas strategy of importing more chrome ore while expanding domestic smelting capacity may structurally reduce seaborne ferro chrome trade over the medium term.

Given that China accounts for around 55% of global stainless steel production and consumes nearly 11 mnt of ferro chrome annually, subdued Chinese procurement is likely to weigh on global trade volumes.

Indonesia has also sharply reduced ferro chrome imports to 0.43 mnt in CY'25 from 0.9 mnt in CY'24, reportedly due to rising domestic production, further limiting global trade opportunities.

To know more on what's happening in global ferro-chrome industry, join the 6th International Ferro Alloys Conference (IFAC 2026) being organised by the Indian Ferro Alloy Producers Association (IFAPA) which will take place in Goa from 16-18 September 2026.