China to Become World’s Largest Ferrochrome Producer in 2013

China to Become World's Largest Ferrochrome Producer in 2013

China could overtake South Africa to become the world’s largest producer of ferrochrome in 2013 given forecasts for sustained high levels of Chinese chrome ore imports, a senior executive at Turkish ferrochrome producer Eti Krom, a subsidiary of Yildirim Holding Inc., said Wednesday.

China has no domestic chrome ore reserves, but rapid expansions of smelting capacity in China and cost pressures on South African ferrochrome producers will boost China’s market share next year as it continues to import huge volumes of chrome ore, Eti Krom Sales Manager Cengiz Onal said.

“South Africa will keep exporting ore, China will keep investing in ferrochrome smelting, and so China will become the world’s largest ferrochrome producer,” he said, speaking at Metal Bulletin/SMR’s 7th Asian Stainless Steel Conference.

In 2012, global output of ferrochrome–a key ingredient in stainless steel–will total 9.7 million metric tons compared with 9.1 million tons last year, with new Chinese production driving the increase.

Of that total, China will represent between 32% and 33% of output and South Africa 34%. In 2013, Chinese output will account for 35% of global production versus 33% for South Africa, Onal said on the sidelines of the conference.

South African production will decline due to high power costs and narrow profit margins, he said.

“There are major reserves in South Africa and there’s smelting there…but sooner or later we’re going to see shutdowns,” he said.

Meanwhile, Chinese ferrochrome producers will continue buying ore reserves, he said, referring to previous acquisitions and investments in countries including Turkey, Zimbabwe, South Africa and Canada.

On the demand side, Onal estimated that global ferrochrome consumption will total 9.5 million tons in 2012 compared with 8.9 million tons in 2011.

By Clementine Wallop

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