| News & Trends | ||
| Expectation to increase price of charge chrome for Q4 recedes - 31 Aug, 2008 | ||
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It seems that an expectation to rise price of South African charge chrome for shipments in October to December 2008 quarter has receded. Depending on a further movement of the market situation, stainless steel mills are supposed to negotiate with suppliers on a request to reduce the price. The reason is that spot price of high carbon ferrochrome has fallen to a lower level than benchmark price. The benchmark price of South African charge chrome settled with Japanese mills for shipments in July to September 2008 quarter is 213 cents per pound CIF and that fixed in Europe for July to September 2008 quarter is 205 cents per pound DDP, which has risen by 13 cents per pound as compared with that for the preceding quarter of April to June 2008. However, reflecting a fall of price for high carbon ferrochrome arisen in domestic market of China, the market of this ferroalloy has been depressed in Asian region and some cargoes of Indian high carbon ferrochrome, having missed to sell, have now taken the offensive to dispose of Indian product at discounted prices in spot market. This movement has caused to weaken price of high carbon ferrochrome in spot market. The domestic price of charge chrome with Cr 50% min. in China has fallen to a level of 183 cents per pound and, following this weakened price, Indian high carbon ferrochrome is now being offered with a further discount of 10 to 20 cents. South Africa is a major country to produce charge chrome but fee of electric power in this country has been decided on the end of June to risen by 27.5% for 2008 and factors to increase production costs have still existed in South Africa. However, the measure to reduce volumes of electric power to be supplied to industries by 10% was once worried but, as far as the production of ferrochrome in South Africa for the first half of 2008 is concerned, an influence of this reduced power supply did not come up to the surface with a serious impact . Also, ASA Metals has been constructing two large 66 MVA electric furnaces at the plant in Dilokong of Limpopo state and already completed 26% of the whole with a target to complete all facilities in 2009. On the other hand, owing to a sharp fall of nickel price, the world production of stainless steel, which was initially expected to recover in the second half of 2008, has a strong probability to postpone a recovery and there is an opinion in the market that a growth on global production of stainless steel in 2008 will be more or less of 5%. Also, an analyst has made a warning signal for a recovery of stainless steel production to be expected in the first half of 2009. The price of South African charge chrome had risen for the successive three quarters from January to March quarter of 2008 but, as far as a rise of price for October to December quarter of 2008 is concerned, a possibility to make a pause is becoming certain. | ||
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