Is it time for a White Swan after so many Black ones?
Now that 2026 has started, we would like to look at the changes in the chrome-related market during 2025 including: changes in supply and demand dynamics and the introduction of ferroalloys safeguard measures in the EU; and outline what new developments may emerge in 2026 such as CBAM implementation. On top of that, both the USA and China have started a new round of economic stimulus packages, which could have a positive impact on demand for ferroalloys and steel.
Starting with ferrochrome demand, the stainless-steel industry, despite some slowdown, is showing 3–4% year-on-year production growth, with a possibility of another record-breaking production year, driven mostly by China, India, and Indonesia. Our estimation, based on the latest data from WorldStainless, puts global stainless-steel production at around 64 million tonnes, up by 1.5 million tonnes compared to 2024.
While this is a modest growth compared to previous years, it is nonetheless positive, coming from an industry that is heavily reliant on FeCr and remains one of the main consumers of chrome-related products.
On the supply side, we are seeing a gap developing due to production cuts in South Africa as well as decreased exports from India. By the end of 2025, exports from RSA during January to October period, were down by almost 50%, to only 1.576 million tonnes, compared to 3.052 million tonnes in the same period of 2024.
While there has been a breakthrough in negotiations for new electricity tariffs for ferrochrome producers, the capacity expected to remain operational may account for only around one-third of 2024 production levels. In addition, the cost of this rescue plan could be immense and, due to the use of coal-powered electricity, South African ferroalloys will fall under CBAM regulations in the EU. This could lead to additional price increases for EU-based customers. Furthermore, the electricity price negotiations currently apply only to ferrochrome smelters, while other ferroalloy producers have not been invited to participate.
As a result, major importers of material from South Africa already feel a noticeable shortage of available products in the market. Given the current supply situation, in the short to mid-term, we expect to see even less FeCr exported from South Africa, especially to China and other non-premium markets.
At the same time, India, the third-largest exporter of ferrochrome has cut its HC FeCr exports by almost half compared to 2023, to just above 400,000 tonnes in 2025 (based on annualized data). This is a result of improved domestic demand, low export prices in the EU, and uncertainty surrounding CBAM and safeguard regulations.
With India’s plan to become the second-largest stainless-steel producer and to increase crude steel production to 300 million tonnes by 2030, we believe that India will eventually become a net importer of ferrochrome and ferroalloys, especially niche and specialty products.
In response to tightening market conditions, China ramped up its domestic ferrochrome production to over 9 million tonnes, a record-breaking level in 2025, while importing 2.193 million tonnes of FeCr, a decrease of 29% compared to the same period in 2024, from January to October.
Due to increased domestic FeCr production, the latest round of bidding prices in China has dropped to the lowest level since August 2025, but remains significantly higher than at the end of 2024. Overall bidding price performance in China remains positive, with 21% growth from January to December 2025, while January 2026 prices are 17% higher year-on-year. Given solid demand for FeCr in China, coupled with strong chromium ore prices, which are up 31% since the beginning of the year, we expect prices to remain steady in Q1 2026.
At the same time, the supply-demand balance in China improved significantly by the end of 2025 compared to 2024:
- At the end of 2024, there was an oversupply of 1,493,800 tonnes of HC FeCr, while demand stood at around 12,645,100 tonnes.
- At the end of 2025, oversupply declined sharply to 100,700 tonnes, while demand increased to 13,082,900 tonnes.
This is one of the main reasons why bidding prices in China remain at a reasonably high level.
Imports of chromium ore into China increased by over 1 million tonnes compared to the same period in 2024. South Africa increased its chromium ore exports by 11% year-on-year, from January to October, with almost all of this material shipped to China.
At the same time, there is emerging news from Zimbabwe. In fiscal year 2026, Zimbabwe may change its tax policy on chromium ore exports. It is still unclear whether these changes will restrict supply or, conversely, encourage exports from Zimbabwe.
Another important development for the ferrochrome and ferroalloys markets is the implementation of CBAM in the EU from 1 January 2026. CBAM is designed to put a price on carbon emissions generated during the production of certain goods imported into the EU. It applies to imports of selected carbon-intensive products, including iron, steel, cement, aluminium, fertilisers, electricity, and hydrogen—sectors that typically rely heavily on coal and other fossil fuels.
CBAM will impose additional costs on exporters, especially those from developing countries such as India, which is one of the major players in the seaborne ferrochrome and ferroalloys market.
Despite years of development, several key uncertainties remain and could have an even larger impact:
- CBAM benchmarks have not yet been announced; they are expected in 2026, but no concrete timeline has been provided.
- All payments related to 2026 emissions will be settled only in 2027, meaning companies must have sufficient CBAM funds available after a full year of operations.
- Other countries, including the UK and the USA, are planning their own versions of CBAM, which could make premium export markets significantly more expensive for ferroalloy producers.
Contrary to substantial changes in the supply of chrome-related products, price levels outside China showed only a limited reaction. While some indices rose by around 20% in 2025 (HG HCFeCr), others showed growth of only 7% (LG HCFeCr). This further demonstrates that without a transparent and verifiable pricing system, ferrochrome prices continue to respond poorly to rapidly changing market conditions.
This stands in stark contrast to commodities such as cobalt, nickel, and copper, which are traded on exchanges. As a result, any supply-demand news for these metals has an immediate impact on prices:
- Cobalt prices rose by 125% in 2025 following a four-month total export ban, later replaced by a quota system.
- LME nickel prices are currently around USD 18,000 per tonne, having increased by more than USD 3,000 per tonne since November 2025.
- Copper prices increased by nearly 5% in the first weeks of 2026.
- These recent price movements in copper and nickel can be attributed to persistent supply tightness since Q4, strong downstream demand, and logistical delays. Unlike chrome-related products, exchange-traded commodities show much faster reaction times to changes in supply-demand balance.
Despite the shifts in supply and demand during 2025–2026, we expect that the ferrochrome market will eventually react to tightening supply and steady demand, potentially leading to upward price momentum for chrome-related products.