US ferro-chrome market looks to new solutions: Ferro-chrome pricing webinar key takeaways

After the announcement of the discontinuation of the quarterly European ferro-chrome benchmark in June 2024, the question of how to replace it became a key priority for the ferro-chrome industry, especially given it was still in use in long-term contracts at the time.

In the intervening time, the need for new solutions has remained at the top of the market’s agenda, not just in Europe, but across global markets, including the US, where the quarterly benchmark was also widely used.

Our webinar panel, featuring Fastmarkets experts Janie Davies, Iñaki Villanueva, Claire Patel-Campbell, Chris Kavanagh and Daniel Hilliard, provided insights into developments since the announcement was made – and other recent news – and what they may mean for ferro-chrome market participants across the United States at a time of change and uncertainty.

Ferro-chrome pricing suite

The panel highlighted the wide array of prices already available at Fastmarkets across products in the US and Europe, which provide insight into an often complex and highly nuanced market.

Chris Kavanagh, price reporter in the US, discussed the changing supply and demand dynamics in the US, and highlighted the key high carbon ferro-chrome price, as well as the most used US low-carbon ferro-chrome price (0.10% carbon content).

 “While these markets can experience varying degrees of illiquidity, our flexible methodology allows us to [closely] follow trends and minimize price lags,” he said.

Claire Patel-Campbell, senior price reporter for Europe, focused on Fastmarkets’ suite of high carbon ferro-chrome prices in Europe. This includes charge chrome on a delivered Europe basis, the newest addition to the European ferro-chrome suite and likely the closest analogue to the quarterly benchmark in terms of reflecting the charge chrome market on the continent. She emphasised how these prices can capture market dynamics, including smaller and more nuanced moves, as well as bigger shifts in the macroeconomic backdrop.

Providing consistency: continuing the benchmark indicator

The panel also highlighted the fact that one of the key takeaways from conversations with market participants in the wake of the discontinuation of the quarterly benchmark has been a desire for transparency and for consistency.

With that in mind, Fastmarkets continues to publish its weekly benchmark indicator price, which is backed by an eight-year publication history.

Iñaki Villanueva, index manager and advanced analytics lead, flagged that, importantly, it is not a forecasting tool, but rather, provides an insight into what the quarterly benchmark would have been if it had been negotiated on a weekly basis.

He explained that the benchmark indicator uses a combination of weekly published ferro-chrome prices that correlate best to the quarterly benchmark while it was still being published, and includes adjustments for factors such as seasonal shifts in supply and demand.

The goal, he said, was “to increase transparency and reduce the uncertainty between the settlements” of the quarterly benchmark, by using extensive historical data of benchmark settlements, along with ferro-chrome prices assessed by Fastmarkets to provide a more market-reflective estimate.

What next for ferro-chrome pricing?

Janie Davies, steel and ferro-alloys editor, EMEA, told webinar attendees that the major shake-up in the ferro-chrome market as a result of the benchmark’s discontinuation, after more than two decades in operation, required an innovative, consistent and transparent approach to pricing solutions.

This is something that will need to be developed over time, and in collaboration with markets, although it could take the form of a direct average of some of Fastmarkets’ existing prices. This could include a European high carbon ferro-chrome price assessment, the European charge chrome price assessment, and also the CIF China charge chrome price assessment, as a way to reflect China’s major influence across global ferro-chrome markets.

In the meantime, along with the 18 global ferro-chrome price quotations we provide, Fastmarkets’ is continuing to publish its weekly benchmark indicator as a way to offer the market the consistency, transparency and stability it needs.

“We have a robust pricing methodology aligned across all our commodities, along with carefully crafted specifications for each individual price assessment,” Davies said.

Latest market dynamics in Europe and US

Later in the session, Kavanagh discussed the decline in US stainless steel markets and the potential impact of lower priced imports from “non-traditional” origins.

“Since the summer months, US stainless markets have been lacklustre [and] inventory levels have built up. Steel capacity utilization rates have seen a notable decline, tumbling down from 80% in August into the lower 70% range,” he noted.

“Over-production and weakening demand, amid economic and market uncertainty, led many US mills to undergo various maintenance outages over the last two months to try and correct the steel oversupply. We’ve seen some furnaces idle indefinitely.”

Patel-Campbell’s update on recent market dynamics in Europe highlighted difficulties that have emerged partly from the impact on stainless steel markets of lower priced imports from Asia, and also from the ongoing weakness in demand.

“Downstream, stainless and special steel markets in Europe have continued to struggle in recent months – and even years – with high, albeit fluctuating, costs and waning demand from end users and that has naturally had a knock-on effect on ferro-chrome,” she said.

And across markets globally, the discontinuation of the European quarterly benchmark has highlighted the opportunity for a new offering – or offerings – that will provide the same clarity and useability as the benchmark, or better.

The elephant in the room: what does Donald Trump’s re-election mean for stainless steel and related markets?

A key question posed by during the webinar – which took place in the immediate wake of the US election result – was how a second term for Donald Trump could affect stainless steel and ferro-chrome markets, in the US especially, but also globally.

Dan Hilliard, steel editor, Americas, said: “I expect an increased focus on tariffs, protectionism in general, a rejection of the global system in favour of regional supply chains.”

He expected a potential increase in tariffs on imported goods to 75%, which he says will benefit steel producers but may limit end-user options. Meanwhile, ferro-chrome consumption could potentially increase due to higher steel production.

Hilliard noted that that the US steel industry was generally positive about Trump’s re-election due to the 25% tariffs he has promised to put on steel and aluminium.

There remains, however, much uncertainty for end users, who may look for alternatives or near-shore production to avoid US tariffs. Hilliard added: “It remains to be seen whether that will be healthy in the long-term for the steel industry.”

According to Kavanagh, US stainless steel mills could benefit from increased consumption: “We will see some level of tariffs imposed, and that that should help our own manufacturing and our own steel production.” He added that markets are now sure of who will be at the helm of the world’s largest economy through to 2028, and the certainty provided is seen as positive for business.

Fastmarkets’ comprehensive suite of ferro-chrome prices includes a new European charge chrome price and a ferro-chrome benchmark indicator, which has an eight-year publication history and offers consistency and stability at a time of change. Find out more on our dedicated ferro-chrome prices hub.

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