How to Invest in Chromium (Updated 2023)

What factors impact chromium supply and demand?

Prices for ferrochromium, a chromium and iron alloy, have been on the rise in recent years on the back of increasing demand, energy costs and supply concerns in Europe due to Russia's invasion of Ukraine.

The global chromium market is expected to reach US$16.92 billion by 2030 due to higher steel sector demand.

More than 95 percent of chromium demand comes from metallurgical applications, with stainless steel representing the vast majority of consumption. Stainless steel production also requires large amounts of iron ore.

"Ferrochrome is added to stainless steel to improve its corrosion resistance and appearance, and thus rising demand from stainless steel manufacturers will facilitate the ferrochrome market growth in the upcoming years," according to Fortune Business Insights. "Chromium stainless steel and chromium manganese grade are usually used in the construction and transportation industries. Additionally, the surging demand for stainless steel from the construction, transportation, and metallurgical industries is likely to aid market proliferation as well."

As the leading producer of stainless steel and ferrochromium, China is the largest consumer of chromium. The US purchased US$1.5 billion, or 5 percent, of global chromium supply in 2022.

In terms of supply, the majority of the world’s chromium production originates in South Africa, Turkey and Kazakhstan. According to the US Geological Survey, South Africa produced 18 million metric tons of chromium in 2022, beating out the rest of the world’s chromium producers by a wide margin.

Interestingly, South Africa used to be the world’s largest producer of ferrochrome as well; however, it lost that title in 2012 to China due to power supply constraints.

One of the niche uses of chromium is as an alloy in dental restorations. While gold and ceramic alloys are more common in industrialized countries, developing nations often use an alloy mix of nickel and chromium when performing dental fillings as these materials are more affordable.

How to invest in chromium?

Chromium investing can be challenging, as this lesser-known metal is not traded on any public exchanges; as a result, owning the physical metal is difficult, risky and generally not recommended.

For that reason, many investors interested in chromium choose to buy shares of companies engaged in ferrochrome production. The largest publicly traded producer is major miner Glencore (LSE:GLEN,OTC Pink:GLCNF), which produces the metal in South Africa.

It is also possible to buy shares of smaller companies focused on chromium exploration and development activities, but finding and evaluating these companies requires research and extensive due diligence.