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Price Of Charge Chrome For Shipments In Q1 / 11 Is Delicate To Be Settled By Roll-Over
= European Mills Are Supposed To Request A Reduction, Price For China Is Focused
The benchmark price of charge chrome (high carbon ferro-chrome) to be settled for shipments in the first quarter (January - March) of 2011 is shaking. Some of stainless steel companies in Europe have an intention to ask for a reduction of the price but, on the other hand, South African producers are suffering from many factors to raise their production cost. Therefore, the present situation may allow to remain unchanged as the best settlement of the price for January -March quarter of 2011, although a possibility to reduce the price is thought to exist.

The benchmark prices of South African charge chrome settled for shipments in October - December quarter of 2010 are (1) 130 US-Cents per lb. of Cr on DDP base for Europe and (2) 138 US-Cents per lb. of Cr CIF for Japan respectively, both of which have remained as unchanged from those fixed for shipments in July - September quarter.

However, spot price of high carbon ferro-chrome (charge chrome) has been very slow to rally and rise and, in consequence of a large differential between benchmark price and spot price continued for a long period, an existence of the benchmark price is being discussed to be how to mean. Japanese side is also watching carefully about further movements of this matter.

At present, a differential between spot price and benchmark price has enlarged. Spot price of high carbon ferro-chrome in Europe has been improved to 105 US-Cents per lb. of Cr by a rise of 5 US-Cents in November to December but, on the contrary, spot price of this ferro-alloy in China has fallen.

Owing to the fact that South African producers are suffering from their overproduction of ferro-chrome and have taken a positive attitude for sales to China, the lowest price of charge chrome bidden at a tender held recently by a stainless steel company of China has fallen to a lower level than 100 US-Cents per lb. of Cr. The current price of high carbon ferro-chrome (charge chrome) offered for China has weakened to 98 US-Cents per lb. of Cr as the normalized level but this tender has been concluded at a lower price than the normal level as mentioned above.

Therefore, some of stainless steel companies in Europe have deferred to receive the cargoes of charge chrome to be shipped in October - December quarter and attached an importance to purchase spot cargoes at discounted prices. The benchmark price of charge chrome has been discussed on its meaning from autumn of 2010 and, in order to settle the price of charge chrome for January - March quarter of 2011, a meaning of the benchmark price has to be discussed again.

However, the system to add alloy surcharge as a measure to calculate sales prices of stainless steel products has been based on the benchmark price of charge chrome, as far as chrome is concerned, and this system gives an advantage to stainless steel mills as buyers of ferro-chrome. Under the circumstances, it seems to be difficult to retreat immediately from the benchmark price and the complicated affairs have been included in this matter.
last modified : Fri 10 Dec, 2010 [10:30]
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