China's Imports Of FeCr In First Half 2010 Decreased By 10%
The situation on supply and demand of ferro-chrome in China has had a considerable change in the last 2 - 3 months. This aspect has been accelerated by the movement, which major stainless steel mills in China commenced from July to reduce their production of stainless steel.
China imported 2,164,000 tons of high carbon ferro-chrome in the calender year (January - December) of 2009, having increased by 2 times compared to that in the preceding year of 2008. This remarkable increase of the imports by China was due to the fact that the prices of high carbon ferro-chrome produced in overseas countries were lower than that produced in China.
However, according to the customs-statistics released in China, this country imported 956,000 tons of high carbon ferro-chrome in the first half (January - June) of 2010, which decreased by 9.2% compared with that (1,053,000 tons) in the same period of 2009. Particularly, China imported only 99,841 tons of high carbon ferro-chrome in June of 2010, having recorded a very low level after an interval of 17 months. The quantities of ferro-chrome and chrome ore imported by China in the first half of 2010 were as per the table attached hereto.
On the other hand, the international price of high carbon ferro-chrome has rallied from the beginning of 2010 and a mood to produce more high carbon ferro-chrome in China is surging. Reflecting this aspect, China imported 4,413,000 tons of chrome ore in the first half of 2010, having had a considerable increase of 87.9% compared to that (2,348,000 tons) in the same period of 2009.
In the course of a high mood to produce more high carbon ferro-chrome in China, a tendency to become the oversupply is coming up and domestic price of high carbon ferro-chrome in China started to fall, after having reached the ceiling of CNY9,800 per ton of material in the middle of May. The current price of high carbon ferro-chrome in domestic market of China has come down to CNY7,800 per ton as a lower level than CNY8,000 per ton.
The facts, which the imports of high carbon ferro-chrome into China have suddenly decreased and domestic price of this ferro-alloy has fallen to a large extent, have been accelerated by a reduction in production of stainless steel implemented by major stainless steel mills in China from July. Nevertheless, this reduction in production of stainless steel has been also utilized for maintenance of facilities in some cases and the parties concerned have viewed that this reduction in production of stainless steel will be continued in China until August and Chinese mills are scheduled to return to a normal operation from September.
However, it is not clear yet at when does the weakened domestic price of high carbon ferro-chrome in China bottom out. China imported a considerable quantity of chrome ore in 2010 as mentioned above but a portion of the cargoes has become a surplus, which has been accumulated at wharves in discharging ports, and this circumstance has put an indirect pressure on domestic price of high carbon ferro-chrome in China.
The matter in question is domestic price of high carbon ferro-chrome ruling in China. The grade of high carbon ferro-chrome, being distributed in domestic market of China, is mainly charge chrome, containing 50% min. of Cr, and domestic price of CNY7,800 per ton of material is equivalent to US$1.05 per lb. of Cr as calculated on the basis of this Cr content. Reflecting this price on US$ base as mentioned above prevailing in domestic market of China, spot price of high carbon ferro-chrome (charge chrome) in Europe has fallen to a nearer level to that in China. Therefore, such major producers as South Africans have faced a wall for their exports of charge chrome (high carbon ferro-chrome) to China and have to take again the offensive for sales in Europe. |
