- Posted April 11, 2012 by
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Metal Markets: The ferrochrome price is up 17% for the second quarter
The global ferrochrome price for the second quarter has been settled at $1.35/lb, compared with $1.15/lb in the first quarter. The price was $1.20/lb in the fourth quarter of 2011 financial year.
The Xstrata-Merafe chrome JV recently said it would temporarily close an additional two furnaces at its Wonderkop and Lydenburg smelters from April 1 to the end of May, after adjusting its agreement with State-owned power utility Eskom.
A total of seven furnaces would be temporarily closed at the venture’s Rustenburg, Wonderkop and Lydenburg smelters. The closures were anticipated to result in loss in production of 130 000 ton.
Global demand and prices for chrome ore, ferrochrome, a key ingredient for making stainless steel, is likely to continue to increase.
High energy, oil and gas prices, currency devaluation now set the stage for even sharper increases in the costs for mining and transportation of chrome ore ingredients for ferrochrome.
Strong economic growth and urbanization in China, India, Brazil, Turkey Middle East countries, and other nations are expected to create growing demand for ferrochrome in 2012 . The chrome ore and ferrochrome prices will increase do to strong demand and problems with export ban and the high costs of production.
Also, chrome ore shortages are expected as Zimbabwe has banned the export of chrome ore.
Many chrome ore companies in Kazakhstan, India, Turkey, South Africa, Oman, Pakistan and Albania have stoped mining the chrome ore do to high costs of production.
This will effect the global chrome ore prices and ferrochrome production.The concern over the depleting reserves of the chrome ore in India, the steel ministry has demanded a complete ban on chrome ore exports.
Indian have increased the country’s export tax on chrome ore and concentrate to 30% of the sales price on shipments. Such supply conditions may drive prices of stainless steel, ferrochrome and chrome ore up . Ferrochrome production for metallurgical applications uses more than 90% of the world's chrome ore.
The demand for stainless steel will remain strong, growing at about 10% a year. China is increasing ferrochrome production and preventing any ferrochrome from leaving its shores through an export duty.
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