September 08, 2008

Chinese import of ferrochrome in 2008 to surge

Platts cited Mr Wan wu Dong director of marketing for Kermas China while speaking at the Metal Bulletin's 9th Asian Ferroalloys Conference in Hong Kong as saying that China will import more than 2 million tonnes of ferrochrome in 2008, marking an increase of a minimum of 650,000 tonnes over 2007.

Mr Dong said China imported about 1.39 million tonnes of ferrochrome in 2007 up sharply as compared to only about 449,385 tonnes imported in 2006 and 233,140 tonnes in 2005.

Mr Dong said the continued growth of stainless steel production in China will continue to drive the country's ferrochrome imports. He said "In 2007, China increased its stainless steel production by 40% and China was the driver of growth in the stainless steel industry and that its consumption of ferrochrome would increase further.”

Mr Dong also said that South African producers' ferrochrome output was limited by the power concern in the country. He said that "Electricity shortage in South Africa is a big threat and producers' stock levels of ferrochrome, particularly in South Africa are at a critically low level and forecasting supply to tighten further.”

Mr Dong said that ferrochrome prices in China would continue to rise as the rapidly expanding consumption in China has changed the market's dynamics, while the medium term shortage of electricity in South Africa would remain a concern. He said "The boom of chrome has just started."

Kazakhstan, South Africa and India are the three major exporters to China. Kazakhstan exported 616,619 tonnes of ferrochrome to China in 2007 followed by South Africa with 551,632 tonnes and India with 181,991 tonnes.