To Resume FeCr Production In China, Being Stimulated By Expansion Of Stainless Steel Production

The movements of spot prices for imports of chrome ores into China in an early part of June were as per the table attached hereto. A sudden and remarkable change of the prices was not seen compared with that in an early part of May but the circumstances surrounding chrome ores are already changing to a considerable extent. The business to import chrome ores into China in the second half (July – December) of 2009 has a strong possibility to take back its vitalities.

China imported 6.84 million tons of chrome ores in 2008 and played the role of having risen steeply international prices of chrome ores but this active demand for chrome ores from China had shrunken from October – December quarter of 2008. However, the international price of high carbon ferro-chrome (charge chrome) to import into China has turned to rise from April of 2009 and Indian high carbon ferro-chrome had once taken the offensive to sell at discounted prices but even lowered price of Indian product has recently recovered to a level of 72 – 75 US-Cents per lb. of Cr CIF. In view of this change on the market situation, the movements to resume production of ferro-chrome in China are now coming up to the surface.

The benchmark price of South African charge chrome for shipments to Europe in July – September quarter of 2009 is anticipated to be most probably settled on 90 US-Cents per lb. of Cr by a rise of 21 US-Cents and the factors to encourage domestic production of ferro-chrome in China have multiplied. The current prices of high carbon ferro-chrome (with Cr 50% min.) produced in China and contracted with Chinese steel companies are in the range of CNY6,300 – 6,400 per metric ton of material (corresponding to 85 – 86 US-Cents per lb. of Cr, including value-added tax of 17%).

The latest movements concerning chrome ores in the world market are as follows ; (1) It was informed that the Government of Zimbabwe has a possibility to determine the regulations to prohibit exports of chrome ores. Zimasco of Zimbabwe resumed to produce ferro-chrome from April to May of 2009 and, therefore, this country has aimed to export value-added product, and (2) In expectation of a rise of prices for chrome ores in the near future, Turkish exporters of chrome ores have kept up their stocks of chrome ores and deferred the time to sell these stocks, having taken an attitude to watch carefully about further movements of prices for chrome ores.