The future is coming on

The future is coming on

For decades, the European Quarterly Benchmark (EQB) served as the central pricing mechanism for the ferrochrome (FeCr) industry. Negotiated between major ferrochrome producer and European stainless steel mills, it acted as a global reference not only in Europe but also across the US and Asia.

However, in May 2024, EQB was formally discontinued, citing its declining relevance and growing disconnect from market realities. Another major producer has since introduced a revised version of the benchmark.

Two years after the discontinuation of the EQB, we set out to estimate what its price level might be for Q3 2026 using the same methodology historically applied, and to assess whether the new benchmark follows a similar logic.

The calculation is based on changes in China’s bidding prices, with the EQB assumed to move proportionally. This is, of course, a simplified approach and does not fully capture the complexity of the ferrochrome market, which varies significantly by grade and location.

July bidding prices in China have been released this week:

• Both Tsingshan and TISCO reduced their prices by RMB 200 month-on-month, bringing them to RMB 8,295/t and RMB 8,095/t, respectively. This represents a decline of around 3%, which—based on our estimates—implies a Q3 2026 EQB of approximately USD 1.56/lb Cr.

This level is broadly in line with Q1, when the EQB stood at USD 1.55/lb Cr and the average bidding price was around RMB 8,095/t.

While this exercise provides a useful directional estimate of the EQB, it does not reflect the broader ferrochrome market, where divergence from benchmark pricing remains significant.

The table below compares the Q2 2026 EQB with available market indicators.

* Approximate market-observed levels

The spread tells the story: at 161 ¢/lb, the current EQB sits roughly 30–50 cents per pound above actual traded levels in both European and Chinese markets.

Given the complexity of the market—including multiple grades, sub-grades, and regional dynamics—it is not feasible to standardize ferrochrome pricing through a single benchmark.

The inadequacy of pricing mechanisms—failing to accurately reflect the real balance of supply and demand—has been a key factor behind production curtailments by South African producers in 2025 and early 2026. These structural issues were compounded by rising input costs: electricity alone now accounts for 40–60% of total ferrochrome production costs, making price signals particularly critical for operational decisions.

In such an environment, distorted or lagging benchmark pricing amplifies the disconnect between market reality and production economics, accelerating curtailments. Recently announced electricity tariffs, combined with clearer and more transparent price discovery, should help producers in RSA to better assess market conditions and align output decisions more closely with real demand. SoftMetal can help in this assessment via its technology based on real market parameters.

Ultimately, the future of ferrochrome pricing will likely depend on combining transaction-based transparency with scalable market participation, creating a system that is both representative and verifiable—something the traditional benchmark never fully achieved.

We believe that SoftMetal can significantly expand these possibilities and become a valuable tool for market participants trading FeCr and other complex metals. By using SoftMetal, market participants can more easily track pricing across different products and better understand overall market direction.