India's ferro chrome production drops 20% y-o-y in Apr-Sep'25. Know why?

• Ferro chrome exports fall by 11% y-o-y in H1FY'26
  
  
• Domestic chrome ore production down 18% in Apr-Sep
  
  
• Average ferro chrome prices drop 4% y-o-y on steel market downtrend
  
  

Morning Brief: India's ferro chrome production was assessed at 0.56 million tonnes (mnt) in April-September 2025 (H1FY'26), a decrease of 19% y-o-y as against 0.69 mnt in H1FY25, as per BigMint data. The declining trajectory of domestic ferro chrome production is a result of various forces acting on the market, notably domestic raw materials production, global demand, and the sustained downtrend in the domestic steel market.

Factors affecting ferro chrome production

Exports drop 11% y-o-y: Exports of ferro chrome from India fell by 11% to 0.24 mnt in H1 of this fiscal against 0.27 mnt in H1FY'25. With exports having a share of nearly half of Indias production, the decline highlights growing structural challenges for the industry at a time when international competition and shifting trade dynamics are reshaping the market.

China, which remains the major destination for Indian ferro chrome, imported 0.07 mnt in H1, lower by 30% against 0.1 mnt in H1FY'25. Chinese demand remains constrained due to the 45 mnt ceiling on stainless steel production and the shrinking possibilities for exports.

Tsingshan, a major stainless steel player in China, lowered its tender prices in H1. Lower export realisations and competitive Chinese domestic prices kept exports to China lower. Chinese ferro chrome production in H1 stood at 4.59 mnt against 4.57 mnt in the year-ago period. Production remained supported on healthy profit margins which incentivised smelters to maintain high run rates. Most high-carbon ferro chrome producers in South China maintained high operating rates, while in North China, despite maintenance stoppages at some facilities, the restart of large-capacity plants contributed significantly to output growth.

China accounted for nearly 35% of Indias ferro chrome exports in CY'24. So, weaker buying appetite in China impacted India's ferro chrome exports.

Subdued prices affect production: Indian ferro chrome prices moved down by 4% y-o-y to average at INR 103,600/t in H1 in comparison to INR 107,700/t exw-Jajpur in H1FY'25. Despite healthy stainless steel production the general downtrend in steel prices affected the raw materials and alloys markets. Although domestic ferro chrome prices were steady for the larger part of the current fiscal, supply crunch in the market due to falling production levels played a role in propping up prices.

Chrome ore prices also fell from INR 25,000/t in H1FY'25 to INR 21,800/t in the same period of the ongoing fiscal year, as per data collected from Odisha Mining Corporation's (OMC) chrome ore auction for the 48-50 grade. With the decline in raw material prices, overall cost of production and prices edged down in H1.

Decline in raw material availability: Chrome ore production saw an 18% y-o-y decline from 1.64 mnt to 1.34 mnt in H1FY'26. Indias biggest chrome miner, OMC, recorded output at 0.57 mnt in H1, a decrease of 20% from 0.71 mnt in H1FY'25. Production was impacted during the extended monsoon period from July to early October due to waterlogging in mines, as well as weak steel market conditions and prices.

Tata Steels ore output also fell sharply by 52% to 0.2 mnt from 0.42 mnt in H1FY'25. Output crashed as the company surrendered one of its three mines. Tata had recorded a steep 39% y-o-y fall in chrome ore output at 0.58 mnt in FY25 compared to 0.96 mnt in FY'24. The decline stemmed mainly from reduced volumes at its Sukinda mines. The steel major has been slapped with a demand notice by the Odisha government for low production and has recently concluded an asset transfer agreement with IMFA for its Kalinganagar ferro chrome plant.

Outlook

The decline in Chinese demand, with mills facing domestic uncertainties and tighter scrutiny abroad, has obviously impacted Indias ferro chrome production. Domestic steel market blues and tight raw material availability will keep affecting production in FY'26. However, a recalibration in market dynamics and emerging consolidation promises stability in the mid-to long-term.