With the onset of the dry season in Sichuan province, ferroalloy smelters have cut back production in anticipation of higher prices and reduced hydroelectric output. The weak prices for ferrochrome in China, as well as a recent lag in chrome ore intake, should lead to additional smelters closing their operations through the wintertime. Some estimates indicate that production in Sichuan will fall by 30,000 mt over the three-month dry season. Despite the current market conditions, China’s Inner Mongolia Kehan Metallurgical has invested 800 million yuan ($132-million) in its ferrochrome plant. The first phase of three furnaces, with a 120,000 tpy capacity, will be commissioned by year end. The second phase of three additional furnaces, also with a 120,000 tpy capacity, will be completed by the end of 2014. When fully commissioned, the operations will be one of the top five largest ferrochrome smelters in China, in terms of capacity.

 

Meanwhile, the Chinese chrome ore market has been slow over the last couple of weeks, as domestic ferrochrome smelters have cut their intakes, as a result of poor demand from the stainless steel industry. Import prices for 42% grade Turkish lumpy ore have eased to $285-295 per mt cif China, and prices for 44% grade South African concentrate have fallen to $155-165 per mt cif China. Many ferrochrome smelters have cut or halted production due to higher electricity charges amid the poor market conditions and, as a result, reducing the demand for ores, sources said.

 

In the first ten months of 2013, China imported 10,107,919 mt of chrome ore, up from 7,919,027 mt the country imported in the same 2012 period. Imports were mainly 5,709,102 mt (3,768,176 mt in the same 2012 period) from South Africa; 1,576,509 mt (1,627,143 mt) from Turkey; 574,999 mt (252,645 mt) from Albania; 545,520 mt (353,916 mt) from Oman; 426,095 mt (402,997 mt) from Pakistan; and 357,477 mt (391,610 mt) from Iran. In October of this year, chrome ore imports were 996,474 mt vs. 685,048 mt in October 2012.