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| Supply And Demand Of Main Ferro-Alloys In Japan For Jan. - Sep. 2005 (2) |
| Fe-Cr Business Had To Continue Hard Fight For Unexpected Cutback Of Stainless Steel Production |
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( Continued from our No.8906 dated December 20, 2005 ) Apart from China, the world production of stainless steel in 2005 decreased unexpectedly. A leading analyst has a view that the world output of crude stainless steel in 2005 would come to 24.86 million tons as decreased by 0.3% compared with that in 2004. Only China is supposed to have produced 3.75 million tons of crude stainless steel in 2005 as increased by 67.8% compared to that in 2004. A myth concerning the growth of stainless steel does not collapse but this growth in 2005 came to a standstill, having left a considerable bill for ferro-chrome producers. The price of South African charge chrome had fallen for the successive two quarters from July - September quarter of 2005. Namely, the price had fallen by 5 US-Cents per lb. for July - September quarter and also by 5 US-Cents per lb. for October - December quarter, totaling to a fall of 10 US-Cents. Also, the price of South African charge chrome for shipments in January - March quarter of 2006 has been settled by a reduction of 5 US-Cents per lb., having continued to fall for the three quarters. Accordingly, such major producers as South Africans have experienced again the bitterness of their unprofitable production. In particular, owing to a steep rise of gold price, the exchange rate of South African Rand against US-Dollar has trended to strengthen and, therefore, South African producers have suffered from the double punches of the Rand exchange rate and consumers` request to reduce price of charge chrome. Incidentally, by taking into consideration of the matter which the demand for ferro-chrome from stainless steel mills expands on a macro base, producers in South Africa and Kazakhstan have been increasing the facilities for production of ferro-chrome and these expansions of the capacities are scheduled to complete during the second half of 2005 to 2006. In South Africa, Hernic Ferrochrome commissioned newly No.4 electric furnace to produce 160,000 tons per annum of charge chrome from September of 2005 and Xstrata is scheduled to complete the Lion project ( to produce 360,000 tons per annum of charge chrome ) in June to July of 2006. KazChrome of Kazakhstan completed in October of 2005 the construction of pelletizing plant ( to produce 400,000 tons per annum of pelletized chrome ore ) at Donskoy chrome mine and has planned to operate this plant on a substantial scale from the first half of 2006. The output of stainless steel products ( hot-rolled products ) in Japan for the calender year ( January - December ) of 2005 is estimated at 3.23 million tons as decreased by 6% compared with that in 2004 and is a decline since 2002. This shrink of the demand for stainless steel products has come up to the surface with an increase of the stocks at stainless steel mills. The quantity of high carbon ferro-chrome stocked at consumers as of the 30th September of 2005 increased to 153,000 tons as the highest level in the past years and, accordingly, the stock rate came to 2.47 months against the consumption in the month. In order to reduce the stocks in question, stainless steel mills are endeavoring to postpone the shipments under the outstanding contracts. This trend is putting an influence on new contracts to be concluded for shipments in 2006 and a scale of the quantity to import ferro-chrome into Japan in the fiscal year of 2006 will shrink. In view of the world circumstances as mentioned above and the market situation in Japan, the supply and demand of ferro-chrome in Japan for January - September of 2005 were as follows ; Japan consumed 678,965 tons of high carbon ferro-chrome in January - September of 2005 as increased by 4.6% compared with that ( 649,129 tons ) in the same period of 2004. The output of stainless steel products in Japan for January - September of 2005 was 2.515 million tons as decreased by 2.0% compared to that in the same period of 2004 but Japan still kept a high level of the consumption. Also, Japan imported 792,116 tons of high carbon ferro-chrome in January - September of 2005, having still maintained a high level and increased by 8.0% compared to that ( 687,359 tons ) in the same period of 2004. Only Nippon Denko has survived as the producer of ferro-chrome in Japan and produced 1,947 tons of high carbon ferro-chrome in January - September of 2005. Furthermore, Japan consumed 37,067 tons of low carbon ferro-chrome in January - September of 2005 as increased by 11.5% compared with that ( 33,241 tons ) in the same period of 2004. JFE Material had been active to produce low carbon ferro-chrome in Japan and actually produced 8,366 tons of low carbon ferro-chrome in January - September of 2005, having had a considerable increase of 32.6% from that ( 6,308 tons ) in the same period of 2004. On the other hand, Japan imported 48,336 tons of low carbon ferro-chrome in January - September of 2005 as decreased by 9.2% compared to that ( 53,236 tons ) in the same period of 2004. The production of low carbon ferro-chrome in Japan recovered and this aspect of the domestic production permeated into the market. Consequently, the import of low carbon ferro-chrome into Japan was so far on a favorable tone but has retreated at present. The quantities of ferro-chrome produced, imported, consumed and delivered by Japan in January - September of 2005 were as per the table attached hereto. |
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| last modified : Fri 13 Jan, 2006 [11:44] |
