TEX reported that Chinese local prices of charge chrome and high carbon ferrochrome rebounded in December 2011. In response to the curtailment by the domestic smelters, Chinese stainless steel mills raised their quotes for deliveries in December 2011.

This move could be the start of something favorable to the ferrochrome market to happen within short. The tendency of recent years was that the European stainless steel industry increased output during the first calendar quarter (January to March 2012) after the fiscal year end, for most of them, when they became somewhat liberated from the market value accounting.

In the past years, ferrochrome price was activated by the raised output of stainless steel. Last year's benchmark price for the second quarter (April to June 2011) was increased by USD 10 per pound, and the benchmark for the second quarter of 2009 was raised largely by USD 35 per pound.

The quotes in the local currency indicated by the Chinese mills for deliveries during December 2011 were CNY 7,700 to CNY 7,900 per pound including the VAT, up by CNY B200 to CNY 400 per pound from the quotes before the raise. The new level was equivalent to USD 95 to USD 97 per pound, excluding the VAT, up USD 2 to USD 3 per pound from November 2011. It is encouraging for the ferrochrome market that the price was increased by the Chinese stainless steel mills who are the buyers of large quantity and very influential over the international market.

According to Mr Robert Yildirim, the president of Turkey's Yildirim Group having Etikrom, Vargon Alloys etc, who gave his price forecast for 2012 upon the year's opening about ferrochrome and chrome ore, the market will start recovering firmly in February 2012 just after the Chinese New Year, and such recovery will definitely affect the benchmark negotiations in Europe in March to lead to a higher benchmark price for the second quarter, fairly reflecting the various cost raising factors, such as price rise of power, fuel and carbon reductants, higher costs to keep skilled workforce, increased royalties and taxes etc. In South Africa, ESKOM is to increase the power rates by 25% again in April 2012.

(Sourced from TEX Report Limited)