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Print[ferro-alloys.com]In H1 2013, the Ferroalloys Division produced: 1,922 kt of saleable chrome ore, 460 kt of saleable manganese ore concentrate and 749 kt of ferroalloys, including 541 kt of its primary product, high carbon ferrochrome. In H1 2013, 103 kt of ferroalloys were consumed internally.
Sales and Pricing:
Capacity utilization at stainless and specialty steel mills in Europe was estimated to have been approximately 70% in H1 2013. The profitability in the stainless steel sector remained an issue with many mills operating at a loss. In the USA, on the contrary, the sector experienced a rather good H1 with the oil and gas and automotive sectors being the main drivers. Japan started the year rather weak but the situation improved during Q1 with a depreciated Japanese Yen playing a positive role in increasing Japanese mills’ competitiveness versus their counterparts in Korea and China. Simultaneously, however, ferrochrome producers in China increased their output in H1 despite their margins being squeezed and their products being offered at or just slightly above perceived production cost. China in H1 continued on its path towards becoming self sufficient in ferrochrome by adding more production capacity.
The European ferrochrome benchmark price in Q1 2013 settled at USD 1.125 per pound of chrome, up US 2.5 cents on the previous quarter. The Q2 2013 benchmark increased US 14.5 cents to USD 1.27 per pound of chrome. This unusually large increase was primarily driven by reduced supply of charge chrome as South Africa’s Eskom’s power buyback programme continued from 2012. This created a short-term squeeze on ferrochrome supply as many South African charge chrome producers had no other option than to temporarily shut down part of their production.
Chrome ore pricing was depressed in H1. This was the result of a combination of slowing growth in China and of South Africa increasing output of chrome ore driven by lower demand because of the power buy backs and opportunistic attractive export opportunities based on the lower exchange rate of the South African Rand.
Sales and Pricing:
Capacity utilization at stainless and specialty steel mills in Europe was estimated to have been approximately 70% in H1 2013. The profitability in the stainless steel sector remained an issue with many mills operating at a loss. In the USA, on the contrary, the sector experienced a rather good H1 with the oil and gas and automotive sectors being the main drivers. Japan started the year rather weak but the situation improved during Q1 with a depreciated Japanese Yen playing a positive role in increasing Japanese mills’ competitiveness versus their counterparts in Korea and China. Simultaneously, however, ferrochrome producers in China increased their output in H1 despite their margins being squeezed and their products being offered at or just slightly above perceived production cost. China in H1 continued on its path towards becoming self sufficient in ferrochrome by adding more production capacity.
The European ferrochrome benchmark price in Q1 2013 settled at USD 1.125 per pound of chrome, up US 2.5 cents on the previous quarter. The Q2 2013 benchmark increased US 14.5 cents to USD 1.27 per pound of chrome. This unusually large increase was primarily driven by reduced supply of charge chrome as South Africa’s Eskom’s power buyback programme continued from 2012. This created a short-term squeeze on ferrochrome supply as many South African charge chrome producers had no other option than to temporarily shut down part of their production.
Chrome ore pricing was depressed in H1. This was the result of a combination of slowing growth in China and of South Africa increasing output of chrome ore driven by lower demand because of the power buy backs and opportunistic attractive export opportunities based on the lower exchange rate of the South African Rand.
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