Mining News - As the dominant global producer, South Africa last year delivered half of the world’s production of chrome ore, half of which was used as feedstock for ferrochrome in South Africa, with the remaining 8.4-million tonnes exported. (Also watch attached Creamer Media video).
Seventy-three per cent of China’s chrome imports come from South Africa’s chrome-mining industry, which employs 17 500 people who receive R4.2-bilion a year in salaries and wages.
“South Africa is without doubt an irreplaceable producer of chrome ore globally,” Tharisa Minerals COO Michelle Taylor told the conference, organised by the Paris-based International Chrome Development Association (ICDA), which was conceived in South Africa by the South African ferrochrome industry 33 years ago.
However, in ferrochrome, South Africa has been forced, through mainly negative power factors, to cede its one-time No 1 global position in this value-added product to China, which in 2016 produced 43% of world ferrochrome output compared with South Africa’s 33%.
South Africa, which has 70% of global chrome resources, currently sends 90% of the chrome that it exports to China.
The first half of 2017 saw South Africa produce 8.2-million tonnes of chrome ore, which puts it on track to possibly beat its 15.1-million-tonne 2016 output, which equated to 54% of global production; cumulative production from the rest of the world was 13.1-million tonnes.
In 2017, South African production is forecast at 16.4-million tonnes, compared with 14.6-million tonnes expected from the rest of the world.
On the ferrochrome front, South Africa last year supplied an even higher 74.9% of Chinese ferrochrome imports, with Kazakhstan supplying 15%, India 4% and 5.2% from the rest of the world.
Ferrochrome, the 2017 production of which is forecast to grow by a healthy 9.5% this year to 12.9-million tonnes, is in turn used as feedstock in the production of stainless steel, which is forecast to hit a 4%-higher 47.6-million-tonne level in 2017 and where China is the undisputed highest producer with a 54% market share.
Chrome production, which flat-lined at 29-million tonnes in 2015 and 2016, is now forecast to grow at 7.2% in 2017 to 31.1-million tonnes.
ICDA market research analyst Victor Constant drew the attention of the conference to the expectation of a drop in South African ferrochrome production in the third quarter of this calendar year, as well as in Eastern
Europe, Commonwealth of Independent Countries, the Middle East and Asia – but not in China, the rest of Africa and the Americas – with global output down 3.5% to 3.07-million tonnes.
Constant identified South Africa as continuing to be the main overall global exporter of charge chrome and high-carbon ferrochrome in the first six months of this year.
Fifty-nine per cent of ferrochrome imported by the Americas in the period was sourced from South Africa, versus 12% from Kazakhstan and 6% from Finland.
Thirty-nine per cent of ferrochrome imported into Europe in the same six months was again from South Africa, with Turkey at 15%, both the Netherlands and Finland at 11% and Sweden at 10%.
Fifty-three per cent of ferrochrome exported into Asia in the first half of the year was South Africa, with 19% from Kazakhstan and 18% from India.
Compared with 2016, South Africa has lost its overall share of ferrochrome exports to increased positions by Turkey and India.
South Africa exported 1.6-million tonnes of ferrochrome in the first half of 2017, mostly to China, Europe, United States and East Asia.
Kazakhstan exported 495 000 t, mostly to China and Japan, with some to United States, South Korea, Russia and Europe.
India exported 421 000 t to Europe and United States, with the rest going to China and Japan.
Zimbabwe exported 75 700 t of ferrochrome, mostly to China and then to the United States and Europe.
In the first six months of the year, China consumed 2.26-million tonnes of ferrochrome from own production and 1.34-million tonnes from imports, taking the total half-year Chinese consumption to 3.6-million tonnes.
As one tonne of ferrochrome yields 3.33 t of stainless steel and China’s output for the first half was 12.02-million tonnes, a 2.21% year-on-year increase is expected on China’s 2016 stainless steel output of 24.9-million tonnes, which in turn was 15.7% higher than in 2015.
If Chinese stainless steel continues to grow in 2017, the correlation between stainless steel production and ferrochrome entails a matching increase in ferrochrome production.
The chrome industry is expecting a significant restart of Europe and United States stainless steel markets and India with its population now rivalling that of China is seen to have strong future potential.