A major chrome mine in Turkey has decided to put the brake on their sales of chrome ore for shipments in the second half (July - December) of 2010 and, therefore, the price of chrome ore for China is anticipated to rise. Eti Krom Inc., a leading producer of chrome and ferro-chrome in Turkey, announced on the beginning of this week that the Company will hold back to offer any chrome ore to the Chinese market for shipments in July - September quarter (for whole quantity) and even part of that to be shipped in October - December quarter.
Eti Krom is scheduled to ship 200,000 tons of chrome ore for Vargon Alloys AB (VAAB) in Sweden, a subsidiary of Eti Krom, in July - December of 2010 and these shipments fulfill the annual contract concluded with VAAB in the beginning of 2010. Because of this reason, Eti Krom has to hold back to make any new offer for chrome ore destined to China as mentioned above.
Eti Krome has viewed that the international prices of ferro-chrome in 2011 will continue on a firm tone. Accordingly, in order to cope with this favorable situation on ferro-chrome, the Yildirim Group has planned to expand the capacity for production of ferro-chrome. In addition to the matter, which Vargon Alloys in Sweden is scheduled to increase their production of ferro-chrome from November of 2010, Eti Krom has been constructing two new large electric furnaces (with transformer capacity of 30 MVA per furnace) at their plant in Turkey and the construction of these two new furnaces is expected to complete by the end of 2010 for commissioning. Its total capacity has been designed to produce 100,000 tons per annum of ferro-chrome.
As regards the sales of chrome ore for China in 2011, Eti Krom has aimed to conclude annual contracts on the quantities with Chinese consumers and the prices will be determined and settled on quarterly base.
For a reference, owing to the landslide occurred on the 23rd January of 2010 in Turkey and also extremely severe winter conditions, Eti Krome once declared force majeure on shipments of 140,000 tons of chrome ore and 10,000 tons of high carbon ferro-chrome but successfully fulfilled these contracts by means of utilizing other ways of inland transportation. Also, Eti Krom has already concluded the contracts with Chinese consumers on 200,000 tons of chrome ore for shipments in April - June quarter of 2010 and these contracts are now being carried out without troubles. |
