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US high-carbon ferrochrome prices fall

  • Wednesday, July 25, 2012
  • Source:

  • Keywords:high-carbon ferrochrome US
[Fellow]
The debacle in the ferrochrome market continued last week. A bargeload quantity of high-carbon ferrochrome was booked in the US at $1.05 per lb, which put it closer to the charge chrome price of $1. In Europe, a large mill said it won’t buy any ferrochrome in the third quarter above $1 per lb. Small quantities of charge chrome were sold in Europe at $1.04 while high-carbon was booked at $1.06.Another European mill was finalizing its price for fines. In the second quarter, the mill paid $1.02 for the fines and wanted a 10¢ reduction based on the 10¢ cut in the benchmark price. Sellers initially insisted on a 96¢ price based on the percentage drop of the benchmark, but the mill eventually won the battle. In Asia, fines were sold as low as 86¢.
 
Chinese ferrochrome prices also are lower. Indian high-carbon was offered at 91-92¢, c.i.f., but one smelter booked material at 89¢.
 
And now there is a new worry coming out of China. China’s low-carbon ferrochrome exports have been increasing the last couple months. In May, China exported 6,766 mt of low-carbon ferrochrome, up from 4,306 mt in April, 3,414 mt in March and 2,624 mt in February. The destinations are mainly Japan, South Korea and Southeastern Asia.
 
Sources pointed out that actual Chinese exports are much bigger if smuggled material was included; there is a 20% export tax on ferrochrome. And, there were rumors that some of the cheap high-carbon ferrochrome—domestically produced and imported—has hit the export market either legally or illegally.
 
If nothing else, DLA is persistent. The agency again offered 1,120,000 lb of low-carbon ferrochrome—560,000 lb of 0.11% C, 69.81% Cr and 560,000 lb of 0.16% C, 65.72% Cr—at last week’s BOA sale. The material is stored in Ravenna, OH. With market conditions deteriorating, it is unlikely that DLA will find a buyer, but by offering the material, it retains its image as a consistent source of supply.
 
The only good news for sellers in the chrome market was that Chinese ore prices seem to be moving up, albeit on small sales.
 
Merafe is expecting to report both basic earnings per share and headline earnings per share of between 5.2¢ and 5.7¢ for the six months ended June 30, 2012. This compares with both basic earnings per share and headline earnings per share of 3.5¢ for the same 2011 period. The change represents an increase of between 49% and 63%. “It looks like Merafe/Xstrata made a lot of money by selling power back to Eskom,” one competitor said. “No wonder Eskom didn’t want to continue the program.”
  • [Editor:editor]

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