Reflecting the fact that major stainless steel mills of China have been continuing to decrease their production of stainless steel, the market price of high carbon ferrochrome in China is falling. The domestic price of this high carbon ferrochrome in April to May had risen to CNY 16,600 per tonne but turned to fall to CNY 13,700 at the end of June.
This domestic price of CNY 13,700 per tonne at the end of June corresponded to USD 1.38 per short tons of Cr, having fallen sharply from that USD 2.21 in May. Stainless steel companies in Japan, South Korea and Taiwan have regarded stainless steel mills in China as an enemy for them and, therefore, are interested in knowing how extent is the domestic price of ferro-chrome in China falling.
In order to adjust excessive stocks of stainless steel products, major stainless steel mills of China have entered from May into the structure to decrease their production of stainless steel and a signal to recover the production from July is not seen yet. Owing to this reduction on production of stainless steel in China, the market price of high carbon ferrochrome in China had once maintained a firm tone but is now in the direction to weaken. The background is due to the matter that Chinese producers of ferrochrome were eager to purchase chrome ore as raw material for production of ferrochrome and have now held fairly stocks of chrome ore. Under this situation, it is possible for Chinese mills to purchase necessary lots of ferrochrome produced in Chins without problems.
According to the customs-statistics released in China, this country imported 2,940,000 tons of chrome ore in January to May of 2008, having increased by 22.5% compared with that 2,400,000 tonnes in the same period of 2007. As a matter of fact, China imported 6,090,000 tonnes of chrome ore in the calendar year January to December of 2007, having had a substantial increase of 40% compared to that in the preceding year of 2006, and secured necessary quantity of chrome ore. China has been importing chrome ore in 2008 on a higher pace than that in 2007.
As regards sources to import chrome ore into China, this country has been increasing the imports from South Africa. A crisis of electric power has emerged in South Africa from the end January of 2008 and it is unable to expect an increase of electricity supply for the next 5 years. Accordingly, new tendency to export a surplus of chrome ore from South Africa is coming up. Under the present situation which China is only the country to purchase chrome ore on spot base, there is no other way but to increase exports of chrome ore for China.
