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FeCr Q4 European Benchmark Negotiations To Start Next Week
= Price cut inevitable due to decline of spot prices =
Negotiations for the benchmark price applicable to the South African Charge Chrome shipped to Europe during the fourth quarter (October - December) of 2012 are scheduled to start next week. Based on the soft spot market situation especially in China, the price is destined to make another drop following the drop agreed for the Q3 (July - September) shipments.

The benchmark price for the current quarter was agreed at US$1.25/lb Cr ddp, down by US$0.10/lb from the preceding quarter. According to a source in Europe, the Q4 benchmark will be cut by US$0.10 - 0.15/lb from the current quarter.

The negotiators will be as usual, Inoxum (a subsidiary of ThyssenKrupp, one of the major stainless steel mills in Europe) on the buyer's side and Xstrata, the world biggest ferrochrome producer on the seller's side.

As announced in January this year by the relevant parties, Inoxum is to be purchased by Outokumpu, Finland, an integrated producer of chrome ore, ferrochrome and stainless steel, who is to establish a new company pending an approval from the European Commission. With the delay in obtaining the approval, Inoxum will continue to serve as a chief negotiator in the coming negotiations. After Inoxum is consolidated in the new company, it is understood that Aperam, a stainless steel division of ArcelorMittal will take the role of the chief negotiator on the buyer's side most likely from the early part of the next year.
last modified : Tue 25 Sep, 2012 [10:35]
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