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Turkey Has Cautious Outlook For Chrome Exports In 2009
= A Major Producer, Cr-Ore Exports In 2009 Are Anticipated To Decrease By 50% Compared To That In 2008
Reflecting a substantial expansion of the markets to export chrome ore, Turkey was successful in having developed largely its production of chrome ore in 2007 and 2008 but, as for the exports of chrome ore in 2009, a major producer in Turkey has a cautious outlook. The Yildirim Group (Eti Krom), which is the largest producer of chrome ore and ferro-chrome in Turkey, has foreseen that the quantity of chrome ore to be exported from Turkey in 2009 will shrink to a scale of 1,000,000 tons per annum with a decrease of 50% from that in 2008.

For a reference, it is estimated that Turkey exported chrome ore in 2008 on a scale of 1,850,000 tons. The reason, why Turkey is supposed to decrease their exports of chrome ore in 2009 to a considerable extent, is due to a forecast that the exports of chrome ore from Turkey to China in 2009 will decrease substantially. The price of Turkish chrome ore to be exported in 2009 is hoped to remain at levels of around US$200 per dry metric ton on CFR China basis for Cr2O3 42% grade hard lumpy materials.

Therefore, by taking into consideration of seasonal factors (winter time), chrome mines in Turkey have suspended to operate until around May of 2009. Also, in order to cope with a sudden and drastic change of the economic circumstances emerged mainly in the USA and Europe, Eti Krom has decided to postpone the investments in new facilities until 2011. Eti Krom has been already reducing their production of chrome ore by 50% and, in addition, the plants in Turkey and Sweden have entered into the structure to decrease their production of ferro-chrome.

The chrome business in Turkey once enlarged smoothly and accumulated substantial earnings but, owing to the worldwide crisis of financing markets as arisen from mid September of this year, has been driven to face a sudden and drastic change of the chrome markets, having caused a depression of the global economy. A remarkable matter is that the world demand for ferro-chrome in 2008 decreased to 7,100,000 tons per anum as a considerable decline from that (8,400,000 tons) as so far anticipated. Mr. Robert Yuksel Yildirim, who is top executive of Eti Krom and President & CEO of the Yildirim Group, already warned of this change of the chrome markets at the International Ferro-Alloys Conference held in October of 2008 in Arizona State of the USA.

A scale of ferro-chrome to be produced in the world for 2008 is estimated to be 7,100,000 tons, having decreased by 10% compared with that in the preceding year of 2007. This global cutback of ferro-chrome production is due to the reduced production of stainless steel at such major stainless steel companies of the world as ArcelorMittal, Acerinox, Thyssen Krupp, Nippon Steel & Sumikin Stainless Steel, Posco, Taiyuan Iron & Steel, Baosteel, and so on, and, consequently, the world demand for ferro-chrome has decreased to a large extent. There is a view in the market that this negative tendency on production of ferro-chrome will continue by the end of the first quarter (January - March) of 2009.

Eti Krom has had a severe forecast that the world output of stainless steel in 2009 is estimated to come down to a scale of 25 million tons as a decline of 2 million tons from that in 2008. In order to accord with this decreased demand for ferro-chrome, the plants in South Africa, China, India, Russia, Kazakhstan, Turkey and Sweden have been already implementing to reduce production of ferro-chrome but it will be necessary to have a certain time to adjust the world supply of ferro-chrome. In addition, a possibility to be needed a further cutback of ferro-chrome production is anticipated.

Under the present situation which consumers have held excessive stocks of ferro-chrome, the matter to settle the benchmark price of South African charge chrome for shipments in January - March quarter of 2009 has involved problems and the price settlement in a three-digit process is thought to be necessary in Europe, depending on cases.

On the other hand, a leading producer of chrome ore in Turkey has an opinion that, although it is still hard to give an affirmative comment on price of chrome ore, the current situation of price for chrome ore is approaching to the mining costs and price of chrome ore is expected to bottom out soon. This change of price for chrome ore is supposed to be caused by the substantially reduced production of chrome ore. The current rock bottom levels of prices for chrome ores to be exported from Turkey to China are thought to be US$190 - 200 per dry metric ton for Cr2O3 42% grade hard lumpy ore and US$240 - 250 per dry metric ton for Cr2O3 48% grade concentrate, both of which are based on CFR China.
last modified : Mon 22 Dec, 2008 [10:17]
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