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FeCr Price May See Opportunity to Rebound For Case Of Antidumping Duties In Europe
= Sales Of Indian Product At Discounted Prices Made Round, Glaring On 60 - 65 US-Cents
In view of the current movements, the international price of high carbon ferro-chrome (including charge chrome) has continued to fall from autumn of 2008 but is now supposed to see an opportunity to rebound. A producer of ferro-chrome in Sweden (Vargon Alloys AB) appealed on the end of last week to the European Commission (EC) for imposition of antidumping duties on the EU imports of ferro-chrome produced in India, South Africa, Kazakhstan and Russia. Although it is not clear yet whether EC receives this case or not, this action seems to be inevitable to put the brake on sales of ferro-chrome at discounted prices in Europe.

Also, China is only the market to expect new contracts on imports of ferro-chrome for shipments in 2009 and, therefore, the offensive for sales to China taken by each source has been complicated. Accordingly, price of high carbon ferro-chrome offered to China in spring of 2009 (February to March) has fallen to a lower level than 60 US-Cents per lb. of Cr CIF and mainly Indian product has been offered on this price level. Indian high carbon ferro-chrome had a seasonal necessity to cope with settlements of accounts closed on the 31st March of 2009 but a lower price than 60 US-Cents is not profitable even for production cost in India and, consequently, major Indian producers of ferro-chrome have been driven to reduce their production.

South African producers of ferro-chrome have already entered into the structure to decrease their production from October of 2008 and the operation rate on average in January - March quarter of 2009 was 20% of nominal capacity as a whole and, accordingly, some of producers assumed that the operation rate in the world as of January of 2009 would be 28% on average.

The current price of charge chrome offered from suppliers to China is 65 US-Cents per lb. of Cr CIF but, on the other hand, the latest price of this ferro-alloy bidden by Chinese buyers is 60 US-Cents CIF, having glared at each other. Unless this is a speculation that China has purchased high carbon ferro-chrome in February to March for forward shipments as the price is bottoming out, some of the parties concerned have a view that price of this ferro-alloys will trend to rise to a nearest level to 65 US-Cents per lb. of Cr. The rises of prices for nickel metal and nickel-based stainless steel scrap are anticipated to exhibit an acceleration of this effect.

In India, Jindal Stainless has decided to shut down one electric furnace for stainless steel production at the Orissa Works and is considering to purchase ferro-chrome as raw material from outside sources. Also, the cutback of ferro-chrome production in South Africa has still continued. Assmang announced in last week that all of four electric furnaces installed at the Machadodorp plant wil be shut down from June. Therefore, the two companies of Hernic Ferrochrome and Assmang in South Africa will suspend to operate all of their electric furnaces, because IMF has resumed to operate one electric furnace from April out of two idled furnaces.

According to the examples as seen in the past years, there is a jinx in the market that, when the producer concerned in the area files case for dumping of ferro-alloy, price of this ferro-alloy will bottom out. Therefore, it is marked to see whether the same matter arises again from this case or not.

For a reference, the benchmark price of South African charge chrome for shipments to Europe in April - June quarter of 2009 has been settled in the first week of April by a reduction of 10 US-Cents per lb. of Cr from that fixed for the preceding quarter of January - March and the price for this quarter has come to 69 US-Cents per lb. of Cr on DDP base. The price for Japan is anticipated to be settled by the end of April and supposed to agree to a reduction of 10 US-Cents in the same case as that of Europe.
last modified : Fri 24 Apr, 2009 [10:15]
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