Ferrochrome Facts 2007

Courtesy Dow Jones Newswire

Courtesy Allegheny Ludlum

Ferrochrome Production

Surging demand for ferrochrome used in making ferroalloy, which in turn is used in making stainless steel, has led to a severe shortage of chromite. Such supply condition is driving up prices of chrome ore. Ferrochrome production for metallurgical applications uses up more than 90% of the worlds chromite output of about 19 M tonnes/y. Non-metallurgical applications consumer only a fraction of chromite production, with the refractory industry accounting for only about 1% and 3% each for the foundry and chemical industries. The non-metallurgical industry is dependent on chromite requirements of the metallurgical industry as most chromite is manufactured by vertically integrated ferrochrome producers. Major traders of non-metallurgical chromite from South Africa provide more than half of global chromite supply. The declining availability of chromite is becoming alarming, especially when non-metallurgical applications are indicating increased demand for the material. The International Chromium Development Association noted that the metallurgical and foundry sectors both achieved an increase of about 10% in chromite consumption in 2005. Refractory consumption rose by 19.5% from 101,000 tonnes to 125,000 tonnes in 2005, while the chemical industry's chromite use dropped 21% from 752,000 tonnes to 595,000 tonnes. The supply shortage is mainly attributed to the booming stainless steel industry, which consumes more than 90% of the world's ferrochrome supply. Prices have also soared, with non-metallurgical chromite consumers compelled to match metal prices to ensure supply. Prices recently climbed further due to several developments, including a new tariff imposed by India on chromite exports; and speculations that South Africa is considering a new legislation that would ban the export of unbeneficiated chromite. South Africa accounts for about 50% of global chromite production, followed by India and Kazakhstan with about 20% and 15%, respectively. Demand for chromite and ferrochrome is expected to remain strong mainly due to the continued growth of China's stainless steel industry. A table shows chromite ore and concentrates production by end use sectors during 1999-2005. A line graph illustrates the price history of South African chromite special grades during Jan 2003-May 2007. Another table lists chromium ores and concentrates production of 20 countries in 2005, in tonnes/y.

South Africa

South Africa is the leading manufacturer of chromite globally and a major supplier of ferrochrome. Its chromite reserves are found in the Bushveld Igneous Complex. Among South Africa's major producers of chromite and/or ferrochrome are Assmang Ltd, Samancor Chrome, Xstrata South Africa and International Ferrometals Ltd (IFM). Assmang mainly produces ferrochrome and obtains its chromite requirements from a new underground mine at Dwarsrivier. The underground mine is gradually increasing production towards its design capacity of 100,000 tonnes/mo of chromite. Samancor Chrome produces some 3 M tonnes/y of chromium ores from the Eastern Chrome Mines (ECM) and Western Chrome Mines (WCM) limbs of the Bushveld Igneous Complex. It consumes roughly 2.3 M tonnes/y of chromium ores for its internal requirements, while 700,000 tonnes/y are sold locally or abroad. The WCM business unit, which churns out most of the company's non-metallurgical grade chromites, yielded 229,634 tonnes of foundry-grade chromite in 2005. The ECM unit produced 66,785 tonnes. Xstrata South Africa, which has five chromite ore mines, churned out 3.6 M tonnes of chromite ore in 2005, down from 4.2 M tonnes in 2004. Australia-based IFM operates the Buffelsfontein mine and ferrochrome smelter plant in Bushveld. The company has set up two furnaces to facilitate production of 267,000 tonnes/y of charge ferrochrome.


Kazakhstan is the second leading manufacturer of chromite globally. The country's top chromite producer is Eurasian Natural Resources Corp (ENRC), which operates the Donskoy Ore Mining & Processing unit. The company uses about 30% of its total chromite output to make chromium chemicals.


India is the third leading chromite ore producer globally with an output of about 3.5-4 M tonnes. India recently decided to implement a significant export tax to ensure supply for domestic ferrochrome manufacture. Chromite ore is mainly produced in the state of Orissa, with a large portion of chromite production consumed by local ferrochrome makers.


Turkey is emerging as one of the major suppliers of chromite to China's ferrochrome markets. Adverse winter conditions allow mining of chromite to be conducted only from May to end of November. Bilfer Madencilik AS is one of Turkey's major chromite producers and primarily caters to the needs of the refractory and foundry industries. RHI AG sources about 2000 tonnes/y of refractory grade chrome for making sliding doors from Bilfer Madencilik.

Copyright © 2007 Elsevier Engineering Information. Source: Financial Times Limited. 06/29/2007 Posted 7/12/2007

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