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| HOME >> Topics List >> February, 2010 >> 26 (Fri) |
| Prior To Negotiation On FeCr Price For Q2 / 10, Bullish Market Is Anticipated |
| = Comments By Yildirim President Of Eti Krom / Turkey |
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The negotiations with stainless steel companies in Europe and Japan on price of high carbon ferro-chrome (charge chrome) for shipments in April - June quarter of 2010 are scheduled to be taken place soon. The benchmark price of South African charge chrome for shipments in January - March quarter of 2010 has been settled by a reduction of 3 US-Cents per lb. of Cr but the producers concerned have planned to rise the price for April - June quarter. Under the circumstances, in addition to the situation in China after Lunar New Year was over, steel production in the USA, Japan, South Korea and European countries has been reviving and steel companies in these countries have deepened the tendency to supplement their stocks of ferro-chrome, indicating a bright picture of the steel market. Mr. Robert Yuskel Yildirim, President and CEO of Eti Krom Inc. as a leading producer of chrome in Turkey, commented in this week on the market situation of ferro-chrome in April - June quarter. According to an information from him, in order to firm up the market of ferro-chrome, South African producers are moving to ask for a rise of 30 US-Cents per lb. of Cr for the benchmark price of charge chrome to be shipped in April - June quarter. The contents of his comments on this subject are as follows ; (1) Following a basic tone which steel mills in the USA, Japan and South Korea have been recovering their production, the movements to supplement their stocks of high carbon ferro-chrome (charge chrome) are expected to become active. The quantity of this ferro-chrome to accumulate its stocks is estimated to come to one million tons during the one year of 2010. In addition, the supply situation of stainless steel scrap will tighten on the worldwide scale. In preparation for Lunar New Year in February, steel mills in China once reduced their stocks of ferro-chrome but, since the holidays were over, are anticipated to invest again in their stocks of ferro-chrome. (2) The supply situation of electric power in South Africa is an anxious matter. In particular, the World Soccer Games is scheduled to be held by FIFA in June of 2010 at Cape Town of South Africa and, therefore, a possibility to reach once a peak of electric power consumption in that period is supposed to exist. The reduced supply of electric power will put a certain influence on production of ferro-chrome in South Africa. The output of ferro-chrome in that time has a possibility to be reduced by a scale of 300,000 tons. (3)At present, China has stocked 2.0 - 2.5 million tons of chrome ore, which are enable China to produce ferro-chrome with volumes to be consumed in China for 3 months. In addition, China has held 0.70 - 1.00 million tons of ferro-chrome at all times, corresponding to the quantity stockpiled by DLA of the USA for an emergency. A major part of chrome ore stocked in China as mentioned above is thought to be UG-2 grade ore produced in South Africa as very low grade chrome ore and, accordingly, it will be necessary for UG-2 grade ore to blend with high grade lumpy chrome ore for production of ferro-chrome. From this point of view, China will be required to have 1.50 million tons of lumpy chrome ore in the next 3 months. However, the sources to be able to supply lumpy chrome ore are Turkey, Albania, Oman and Pakistan but it will be not possible for these countries to comply immediately with this requirement. Eti Krom is the largest chrome mine in Turkey but, because of the troubled inland transportation caused by a heavy landsliding occurred in January of 2010, declared " Force Majeure " for deliveries of chrome ore under the outstanding contracts. Therefore, the supply situation of lumpy chrome ore has become severer. (4) Under the circumstances as mentioned above, market price of chrome ore is anticipated to rise further and the ore price in March to April of this year is convinced to rise to a level of US$450 per dry metric ton on CFR Chinese main port basis. Following this rise of price for Turkish chrome ore, prices of chrome ore produced in South Africa and Oman are supposed to rise to a level of US$300 per ton on CFR Chinese main port basis. (5)Spot price of high carbon ferro-chrome in Europe has risen to US$1.20 - 1.28 per lb. of Cr in this week. Also, spot price of this ferro-alloy in the USA has risen to US$1.30 - 1.35 per lb. of Cr. It has been viewed that, since Lunar New Year was over, spot price of high carbon ferro-chrome in China will maintain a firm tone. Reflecting these rises of spot price for high carbon ferro-chrome as mentioned above, the benchmark price of South African charge chrome for shipments to Europe in April - June quarter is anticipated to rise to a level of 135 US-Cents per lb. of Cr. |
| last modified : Wed 03 Mar, 2010 [10:06] |
