quarterly global chrome and stainless · pdf file · 2011-03-09 q: what products...

Published Quarterly

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Quarterly Global Chrome and Stainless Review



There are a number of questions facing the industry at the moment – some longer-term and some directly topical each quarter. Metal Bulletin Research’s (MBR) Quarterly Global Chrome and Stainless Review provides independent analysis and forecasts for these key issues. This report has exclusive access to all global chromium statistics covering world production and international trade figures, as supplied by the ICDA (International Chromium Development Association)

MBR is the exclusive independent source for these authoritative industry statistics which are currently only available to ICDA members.

Utilising this data, MBR’s expert analysts provide the most comprehensive analysis and forecasting service available to the industry. This unrivalled in-depth coverage of the global ferro-chrome and stainless markets will assist your business with strategic planning. With four issues every year you can make sure you don’t miss key developments in your industry.

Included with a subscription:

Easy-to-set-up multi-user licenses to MBR’s Quarterly Global Chrome and Stainless Review – access cost information anytime, anywhere, by anyone across your divisions.

Analyst support – contact the Head of Research for bespoke scenario analysis and further analytical support.

Access to commodity market economic and survey reports (WEM and MTI).

Preferential access to other product and services e.g. regular market coverage in Stainless Steels: Market Tracker.

Introduction

For more information please visit www.metalbulletinresearch.com or call +44 (0) 20 7779 7999

or email [email protected]

Key trend analysis of global ferro-chrome trade.

Key trend analysis of global ferro-chrome price trends and forecasts fully supported by charts, tables and analysis.

The study details regional production and market price analysis of chrome ore with production forecasts provided on a quarterly basis going out to the next two years.

Given MBR’s unique and exclusive relationship with the ICDA we provide detailed analysis and discussions on the ferro-chrome markets. The study provides by-country production forecasts over the next 5 years – updated annually.

Analysis of separate by-country production cost information updated each quarter.

The Service allows you to access and utilise the entire supply/demand balance for the ferro-chrome industry.


Key Benefits


Q: What products are covered in the report?

A: The report focuses on high-carbon ferro-chrome, charge chrome, and chrome ore. If you are interested in other chrome alloys, including low-carbon ferro-chrome and medium-carbon ferro-chrome, or chrome metal, research on these chrome products can be conducted separately on your behalf.

Q: Is there cost data in the report?

A: Yes, we have ferro-chrome production costs by country and by producer for the industry’s largest producers.

Q: What forecasts are in the report? How far out are the forecasts?

A: We have forecasts for stainless steel production, ferro-chrome consumption, ferro-chrome production, ferro-chrome prices, chrome ore production, and chrome ore prices. Our forecasts are presented on a quarterly basis for the coming two years and on an annual basis for the next five years.

Q: What is the relationship between MBR and the ICDA?

A: MBR is the independent consultancy and research division of Metal Bulletin Ltd. Reflecting MBR’s stellar reputation for high-quality research and analysis, the ICDA selected MBR to be the exclusive non-ICDA member consultancy to receive, analyse and publish the ICDA’s industry statistics.

Q: What stainless information is covered?

A: Detailed austenitic versus ferritic stainless steel statistics, analysis and forecasts including production, consumption, per capita trends and production ratio trends by major region. Major announced investment in new stainless steel melting capacity planned. Analysis of production cost trends facing the global stainless industry including stainless scrap, nickel and freight. Analysis of stainless consumption by key end-user sectors including automotive, electronics and appliances, energy and architecture.

Your Questions Answered

Your Questions Answered Table of Contents

Updated Quarterly

Summary

1. Economic Outlook 1.1 Europe 1.2 Asia 1.3 America

2. Recent Trends 2.1 Consumption 2.2 Production 2.3 Price 2.4 Ferro-chrome Trade

3. Chrome 3.1 Chrome Production 3.2 Chrome Price

4. Ferro-chrome 4.1 Ferro-chrome Market 4.2 Production Costs Cost Breakdown 4.3 Price Outlook

5. Stainless Steel 5.1 Stainless Steel Consumption 5.2.1 USA 5.2.2 Europe 5.2.3 Asia 5.2 Stainless Steel Production

6. Eskom

7. Appendix 7.1 Contract Structure and Pricing 7.2 Chrome Ore Reserves and Capacity 7.3 Processing of ferro-chrome- AC versus DC furnaces

Bibliography

List of Charts

Chart 1: Germany’s exposure to PIIGS nations

Chart 2: Chinese trade surplus

Chart 3: Purchasing Managers Index

Chart 4: US purchasing managers index

Chart 5: Unemployment rate

Chart 6: Stainless steel inventory

Chart 7: Chromite ore

Chart 8: HC ferro-chrome production

Chart 9: HC ferro-chrome quarterly price comparison

Chart 10: European charge chrome price comparison

Chart 11: Chrome ore production 20s09 & 2010

Chart 12: Annual chrome ore production outlook

Chart 13: Outlook for chrome ore price

Chart 14: Cost forecast by country 2010F

Chart 15: Ferro-chrome costs at the end of 2009

Chart 16: Chrome ore cost component in FeCr prices

Chart 17: Coke cost component in FeCr prices

Chart 18: Chrome exporter’s currency

Chart 19: Implied stainless steel consumption per capita

Chart 20: US weighted

Chart 21: EU weighted IP Index

Chart 22: Eskom and the ferro‐chrome industry

List of tabLes

Table 1: GDP growth

Table 2: USA stainless steel shipments & inventories

Table 3: HC FeCr Imports

Table 4: HC export summary

Table 5: World quarterly chrome production

Table 6: Quarterly ferro-chrome production 2005-2010

Table 7: HC ferro-chrome production forecast

Table 8: Costs of South African Producers

Table 9: Quarterly ferro‐chrome supply/demand balance 2005-2010

Table 10: ferro‐chrome balance

Table 11: Characteristics of HC FeCr/ Charge Chrome

Table 12: Use of chrome in steels

Table 13: Stainless steel consumption

Table 14: Quarterly stainless steel production

Table 15: Outlook for ferro-chrome consumption

Table 16: Global chrome Reserves

Table 17: Chromite ore capacity

Table 18: Processing of ferro-chrome- AC versus DC furnaces


3. Chrome Ore

3.1 Chrome Ore Production

We expect chrome ore production to make a reasonable come back this year and improve by 26% following a decline to 2003 levels in 2009. Much of this growth is expected to be driven by South Africa, Turkey and India which are expected to increase production by 40%, 64% and 69%, respectively. This increase in production has been driven by renewed buying of chrome ore from China. China accounts for 85% of chrome ore import demand owing to the country’s dearth of chrome reserves as well as production capacity. In addition, since the financial crisis the country has focused on preserving their domestic resources and has chosen instead to capitalise on depressed commodity prices by importing. According to an Xstrata spokesman “China will continue to produce ferro-chrome and stainless steel and the only limiting factor will be the amount of ore China can get its hands on.”

SAMPLE

To date South Africa remains the largest supplier of Chinese ore, though the South African government is trying to limit the amount of unbeneficiated products leaving the country. In an interview with Xstrata chrome division, indications were that owing to the lack of power, which is critical to convert the chrome ore to ferro-chrome, the Department of Mineral Resources (DMR) have turned a blind eye to the amount of ore leaving the country. Xstrata’s black economic empowerment arm, Merafe, has long been a lobbyist for limiting chrome ore leaving South Africa. The delegation asked for a duty of $100/t to be imposed on chromite ore exports and that only integrated producers be allowed to export ore-limiting the ore exports to only 30% of their production capacity.

However a delegation of South African junior miners retaliated vehemently to these requests, accusing the delegation of acting in a cartel-like manner and saying that they are only exporting chrome ore since Eskom has indicated that they will be unable to provide them with power for a further 5-9 years. China bought 2.9m tonnes of ore out of a total of 6.4m tonnes form South Africa last year for an average price of $215/t CIF compared with $360/t CIF it paid for Indian exports.2 The country also paid more than 35% for raw ore from Turkey. The DMR has yet to come to a decision regarding this matter and we do not believe that exports will be restricted in the short term.

In 2011, South Africa is expected to have a new chrome producer – Ruuki. The Finnish ferro-chrome producer is expected to expand its operations into South Africa and supply ore to its Mogale Alloys smelting operations. The existing Mogale Alloys operations have a capacity of 140,000 tpa, which is expected to double following Ruuki’s entry into South Africa. This will add 1.8% to South Africa’s chrome ore output, rendering Mogale Alloys a medium-sized producer by South African standards.

March 2010 [THE GLOBAL CHROME QUARTERLY AND STAINLESS REVIEW]

March 2010 [THE GLOBAL CHROME QUARTERLY AND STAINLESS REVIEW]

5.1 Stainless Steel Consumption

Stainless steel consumption per capita is expected to increase in 2010 in the majority of countries compared to 2009.

5.2 Stainless Steel Production

5.2.1 USA

According to South African ferro-chrome producer Hernic, the United States stainless steel producers are increasing their demand orders. We foresee a similar trend in our end use index (Chart 19), which has shown signs of increasing over the last quarter. This increased consumption could be caused by distributors and OEMs replenishing their inventories rather than a reflection of sustainable demand. The general consensus is that at the end of 1Q10, the US stainless steel industry had completed their destocking of stainless steel inventories and stocks were extremely low.

According to the MSCI’s tally, only 2.6 months worth of stocks were on hand by the end of December. Following a 33% year-on-year decline in the automotive market in 2009, demand for Types 409 and 439 stainless steel for auto exhaust systems bottomed out in 4Q09. Since 1Q10, there have been monthly increases in sales of passenger cars and light trucks. We estimate that North American auto builds will rise from 8.5m in 2009 to 10.6m vehicles thisyear. We foresee a rise US per capita consumption of 13%.

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quarterly global chrome and stainless · pdf file · 2011-03-09 q: what products...

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