What to expect from FeCr market development in H2 2025 – is the glass half full or half empty?

While the ferrochrome (FeCr) market usually slows in summer, signs suggest that this quiet period could be masking deeper supply issues already in motion. Despite significant production cuts in the RSA, the market has not shown significant reaction. We expect that once the restocking period starts, those cuts will put upward pressure on the FeCr prices, and it might happen faster than market participants could react. Especially with the latest stainless steel production numbers being close to 2024 results, around 60+ million tonnes.

Several structural transformations are underway in the market at the same moment, and this is not only a general uncertainty related to the present tariff and trade barriers development, but also RSA Cr ore export duty recent decision, restructuring of several leading enterprises in the Cr industry worldwide, changing landscape amongst the major players in the industry. This comes on top of the not always adequate market price discovery mechanisms amongst a numerous indexes and many new replicas and descendants of discontinued last year EQB.

In late June 2025, Glencore and Merafe Resources announced the temporary shutdown of multiple smelters in South Africa — a major contributor to global FeCr supply. The decision was driven by soaring power tariffs and weak market conditions, taking a significant chunk of capacity offline.
In China, high-carbon FeCr producers are under similar pressure. Cr Ore prices have surged, but FeCr prices haven’t kept pace. Margins are collapsing. Reports indicate that smelters in Southwest China are losing up to RMB 800 per tonne. Meanwhile, Indian FeCr exports are down sharply, tightening regional availability.
Despite this, the market reaction continues to be subdued.

Several factors that are covering the impact — at least for now:
• High Inventory Levels: Chinese stainless producers and traders built stock during late 2024’s early 2025’s price dip.
• Demand Remains Soft: Stainless output is steady but not accelerating, especially in major producing regions.
• Seasonal Slowdown: Summer is traditionally quiet for metals buying, delaying any real test of supply resilience.
But this may be a wrong sense of security. The real question isn’t if the market tightens — but when.

FeCr smelters can’t restart instantaneously. In South Africa, unreliable power and complex logistics make restarts particularly slow. If demand picks up in Q4 — through increased Chinese stainless output or restocking in Europe — the current idled capacity should result in a rapid and severe supply squeeze.
This could mirror post-COVID commodity patterns, where supply contractions during downturns left producers unprepared for sharp rebounds — triggering price spikes and extreme volatility. The major difference being that post-COVID, the market was filled with liquidity and monetary support from the government.

There are some indicators to keep an eye on:
1. China Stainless Output (Aug–Oct): A rise could quickly draw down stockpiles.
2. Introduction of chromium ore export duty in South Africa
3. South Africa Load-Shedding Data: Extended outages would prolong production curtailments.
4. Chrome Ore Prices (CIF China): Despite recent decrease the price level is still way above the beginning of the year, while Cr ore stocks in China are at the lowest level in 2025.
5. European Spot FeCr Premiums: Tightness here often reflects early signs of global imbalance, especially with export cuts from India
6. Port & Freight Metrics: Even minor logistics hiccups could compound supply risks.

The ferrochrome market is increasingly driven by supply/demand balance, energy policies, and geopolitical risks. Unfortunately, it takes significant time for the market to react to any weighty changes.
That’s where online trading marketplaces such as SoftMetal provide its users with an important advantage. With a diversified supplier network, real-time market intelligence, and a strong ESG framework, SoftMetal empowers clients to secure material when others are waiting for the market reaction. Whether conditions are calm or chaotic, SoftMetal helps businesses anticipate disruption — not just react to it.

The ferrochrome market may look stable today. But with smelters offline, margins diminishing, and inventories slowly ticking down, we may already be in the early stages of a supply shock — just one that hasn’t fully shown up in price level yet. Unless the demand goes down, supply will definitely not be enough in the second half of the year. And if the demand recovers supply will definitely need time and price support in order to catch up. Looks like the supply/demand balance is rather half empty than full and will have to be refilled in H2 2025.