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Chrome prices to begin recovery Posted: Fri, 29 Sep 2006 [miningmx.com] -- PRICES for ferrochrome are expected to be rolled over or improved slightly in the fourth quarter of this year, said Steve Phiri, CEO of the R1.5bn empowerment firm, Merafe Resources. Merafe merged its ferrochrome assets with those of Xstrata in South Africa to create the world's largest integrated ferrochrome producer. Output is expected to reach 1.95 million tons/year when the R1.7bn Project Lion reaches full production. Project Lion is an Xstata controlled venture in which Merafe has a 20.5% participation. "We do not anticipate any reduction of ferrochrome prices for the fourth quarter. They will be rolled over or even slightly increased," said Phiri. Ferrochrome, the price of which is negotiated in quarterly contracts, was sold for about $0.74c/lb in the third quarter, a 6.8% increase. However, there was the possibility that new ferrochrome production in 2007 from Project Lion "might tip the scales. But we expect the market to be quite strong," said Phiri. He was speaking at the Nedcor Securities mid-cap conference in Cape Town. The price of ferrochrome is closely tied to stainless steel production of which about 78% growth will be recorded in China. However, China growth is expected to start slowing to 2009. According to statistics provided by Merafe, world stainless steel output growth will fall from 10.5% in 2007 falling to 2.1% growth in 2009. This slowdown represented a period of stabilisation in China, Phiri said.Free news alerts: click here to subscribe
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