Shanghai November 12th (Xinhua Finance) - Recently, the market for chromium salts has shaken off its usual low-key demeanor, experiencing a wave of strong price increases.

Data shows that since the fourth quarter, the market for metal chromium has been continuously affected by the wave of price increases, with a monthly increase of about 24%. The industry leader Zhenhua Shares has raised prices twice in October, with a cumulative increase of 14,000 RMB/ton, and the price of new orders continues to rise month by month. The second largest chromium salt manufacturer in China, Sichuan Galaxy Chemical Co., Ltd., followed the price increase and announced that the price of metal chromium would be increased by 5,000 RMB/ton starting from November 10.

"The recent price increase is mainly due to the intensification of the supply and demand mismatch, the tightening of upstream mine resources, strict environmental restrictions, and the rapid growth of downstream demand, which has made metal chromium gradually scarce." An official from a leading domestic chromium salt production enterprise said that chromium salt has a strong essential attribute, with high strength, high temperature resistance, anti-oxidation, and corrosion resistance, and is more used in aerospace, high-end equipment manufacturing and other fields.

Leading companies take the lead in raising prices

In the natural world, chromium mainly exists in the form of chromite, and the global chromite resources are highly concentrated in South Africa, Kazakhstan, and Zimbabwe. The global known chromite production capacity is about 10 million tons, and China accounts for about 45% of the world's chromite production.

According to the data from BAICHUAN Yinfu, on November 11th, the price of metal chromium was 83,000 RMB/ton, with a daily increase of 3,500 RMB/ton, an increase of about 38% compared to the beginning of the year. The most closely linked product to metal chromium, green chromium oxide, has seen its market price rise to 34,500 RMB/ton, an increase of 4,500 RMB/ton compared to previous low points.

As the domestic leader in chromium salts, Zhenhua Shares has raised the price of metal chromium twice since October this year, with a cumulative increase of 14,000 RMB/ton. The company revealed: "The price of new orders signed continues to rise month-on-month, and the company's metal chromium products are in full production and sales mode, with orders scheduled until the end of this year."

Sichuan Galaxy Chemical Co., Ltd. also rose in lockstep, announcing that it would raise the price of metal chromium by 5,000 RMB per ton starting from November 10th, due to the rise in raw material prices.

Market supply and demand mismatch intensifies

The core logic of the current rise in metal chromium prices is the mismatch between supply and demand in the market.

A relevant person in charge of a domestic leading chromium salt company introduced to reporters that the upstream of the chromium industry chain includes the mining of chromium iron ore, the production of chromium salts, and the smelting of metal chromium, etc. Among them, the processing and purification of chromium iron ore to produce sodium dichromate, chromium dioxide and other chemical intermediates is the key "bridge" for chromium to extend to the downstream; Further reduction of chromium salts to obtain metal chromium, and enter the field of metal materials. Since the fourth quarter, due to the pull of downstream demand, the prices of metal chromium and chromium salts have increased.

From the supply side, the South African government recently planned to implement export controls on chromite mines, requiring exports to be licensed in the future and proposing an export tax of 25%. According to Zhenhua Shares, in the past 10 years, there have been no new entrants or new production projects in the domestic chromate industry, and the incremental supply of the industry mainly comes from the company's technological transformation. The company's chromate production in 2024 reached 260,000 tons.

Gjin Securities research report analyzes that the rapid expansion of SOFC (Solid Oxide Fuel Cell) production in 2025, 2026, and 2027 will bring 0.38 million tons, 1.13 million tons, and 2.62 million tons of chromium demand, and 1GW of SOFC will drive 0.75 million tons to 1 million tons of metal chromium demand. At the same time, the demand for chromium in the field of gas turbine blades, commercial aviation, etc., will be superimposed to drive the demand for chromium and chromium salts. It is expected that by 2028, the supply and demand gap of chromium and chromium salts will exceed 70,000 tons and 300,000 tons, respectively, and the gap ratio will exceed 30%.

On October 13th, Zhenhua Shares issued a public announcement regarding the progress of its participation in the restructuring of the bankruptcy of Xinjiang Shen Hong Group Co., Ltd. and other 7 companies. The company plans to invest 200 million RMB to participate in the merger and bankruptcy restructuring of Xinjiang Shen Hong Group and other 7 companies. After the restructuring is completed, Zhenhua Shares will obtain 100% of the shares of the target company. It is reported that the core business of Xinjiang Shen Hong Group covers the production and sales of chromium salt products, metal mining, and heat and power supply, etc., with a chromium salt production capacity of 20,000 tons.

Zhenhua Shares stated that the company is currently the world's largest manufacturer of chromium chemicals and vitamin K3. In order to further expand the company's business channels, promote the integration and upgrading of the chromium salt industry, and promote the chromium salt industry to develop in a higher quality, more environmentally friendly, and more efficient direction, in line with the development requirements and rules of the chromium salt industry, the company participated in the recruitment of investors for the bankrupt reorganization of the target company. As the only investor in this reorganization case, the company will fully play the operational potential of the target company and further seize the development opportunities of the chromium salt industry by combining the successful experience of the industry's mergers and acquisitions and reorganization that have been implemented.

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