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General Review Of Chrome Ore In 2009 And Its Outlook For New Year
= 2009 Was The Year Swung Around By Demand For Chrome Ore From China
The reason, why the international prices of chrome ores had fluctuated considerably during the last one year of the end 2008 to 2009, can be well understood from the movements of floor prices applied to exports by MMTC of India. The floor prices of high grade chrome ores (concentrates and friable ore with Cr2O3 48% min.) applied by MMTC to exports in September - December of 2008 were in the range of 710 - 715 per metric ton FOB India but those as of the 31st December of 2009 were in the rang of US$250 - 255 FOB, having fallen by US$460 per ton compared with the floor prices in one year ago. For a reference, US$250 - 255 as of the end of 2009 have been revised and risen to US$330 - 335 per metric ton FOB India for exports in the mid January to the end March of 2010, because the international prices of chrome ores have turned to rise.

However, the floor prices of US$710 - 715 FOB continued from May of 2008 to the end December of 2008 had been said as the remnants arisen from an extraordinary boom, which China aggressively imported chrome ores in 2008. The movements of the floor prices (per metric ton FOB) for exports of chrome ores applied by MMTC in the calender year (January - December) of 2009 were <> in first half (January - June) : US$250 - 195 and <> in second half (July - December) : US$330 - 250, having fluctuated in the range of US$200 - 330 per metric ton FOB India. Therefore, the floor prices of Indian chrome ores applied to exports in 2008 were extremely high levels and those in 2009 are thought to have had comparatively stable movements.

From a conclusive point of view, China has become only the country in the world to import chrome ores with large quantities and, accordingly, the requirements of chrome ores by China have been supposedly controlling the international prices of chrome ores. According to an estimation by Antaike which is an investigation agency having belonged to the Central Government of China, the output of crude stainless steel in China for the calender year of 2009 is presumed to have reached 9.90 million tons, having had a considerable increase of 25% compared to that in 2008, but the international prices of chrome ores could have had a sunlight only from autumn of 2009. Stainless steel mills in China had secured chrome unit by means of having imported large quantities of ferro-chrome at discounted prices in the first half of 2009. Therefore, ferro-chrome producers in China had been deferred a timing to be favored with an increase of orders for ferro-chrome from Chinese steel mills.

A depression in production of ferro-chrome by China was due to the countermeasures for a sudden slump in consumption of ferro-chrome in Europe, which ferro-chrome producers in India and South Africa had taken the drastic offensive for sales of ferro-chrome to China at discounted prices (at 58 - 60 US-Cents per lb. of Cr CIF China for shipments in January - March quarter of 2009). As a matter of fact, China imported 1,050,000 tons of ferro-chrome in the first half of 2009, having had a considerable increase of 60% compared with that (658,000 tons) in the same period of 2008, and, Chinese producers, who have been suffering from high cost for production of ferro-chrome, were delayed to have their time to go on stage as their supply ability of ferro-chrome has been restricted. Accordingly, Chinese producers held back to import chrome ores as raw material for their production of ferro-chrome.

In view of the matter, which ferro-chrome producers in China import chrome ores as raw material and convert it to ferro-chrome through refining process, the cost to produce ferro-chrome in China is estimated to be higher than those in India and South Africa. Nevertheless, since the international prices of ferro-chrome have turned to rise from the second half of 2009, a tendency to produce more ferro-chrome in China has surged and, in order to comply with this aspect, China increased their imports of chrome ores in the second half of 2009, having resulted in 6,760,000 tons of chrome ores imported in the calender year of 2009 as decreased somewhat compared to that (6,848,000 tons) imported in the preceding year of 2008. However, the stocks of chrome ores in China as of the 31st December of 2009 increased to 1,400,000 tons and, in spite of the expectation from Chinese producers, a discrepancy on supply and demand of chrome ores has arisen.

When the quantities of chrome ores imported from main sources into China in 2009 are compared with those in 2008, <> from South Africa : increased by 6.6%, <> from Turkey : increased by 0.8%, <> from India : decreased by 29% and <> from Oman : decreased by 22%. Therefore, the sales of chrome ores from South Africa to China were remarkable. South Africa has also increased their exports of ferro-chrome for China. In South Africa, where is said as the kingdom of chrome, ferro-chrome producers are negotiating with the Government of South Africa to enforce the regulations for exports of chrome ores but the matter to control exports of chrome ores from South Africa is so far not materialized, because the exports of chrome ores from South Africa cause to increase the employment in this country.

The international prices of chrome ores are controlled by a trend of prices to be imported by China as the largest country in the world to consume chrome ores. From this point of view, MMTC of India revised in 2009 their floor prices of chrome ores for exports but this decision followed the movements on prices of chrome ores in the international market.

For a reference, Japan imported 84,000 tons of chrome ores in 2009, which included 62,000 tons from India and compared with that (145,000 tons) in 2008. The Chiba Works of JFE Steel has been using metallurgical grade chrome ore as a direct reducing agent for production of stainless steel and only this demand for chrome ore has been still left in Japan.
last modified : Mon 22 Feb, 2010 [11:40]
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