Core Consultants speaks to the ICDA about the current market conditions in the chrome and ferrochrome industry, their upcoming industry event in Kazakhstan and what delegates can expect.
1. To what extent do you think the environmental inspections and clamp downs in China will affect the ferrochrome industry? Do you expect that the Chinese environmental tax in 2018 will have a positive effect on prices?
It is very difficult to predict, but the environmental tax is aiming at encouraging companies to reduce their emissions which is a positive move given that China is the largest ferrochrome producer since 2012 overtaking South Africa, it may contribute to push companies more environmental friendly technologies including closed furnaces. It is important to know to which extent will this tax be applied whether it would be added to existing taxes or replace former taxes, therefore painting green but not changing the situation, we will follow the developments closely.
2. Have you seen a noteable pick up in chrome ore or ferrochrome production from any particular region over the last quarter?
Compared Q2 2016, global chrome ore and concentrate production increased slightly by 0.2% in Q3 2016. It increased mainly in Western Europe including Turkey (+27% from Q2 2016), in Eastern Europe/CIS & Middle East (+2.9%) and marginally in Africa & Americas (+0.3%). In Asia and Australasia production of chrome ore and concentrate decreased by 16% given that India output was down over this time.
Globally, ferrochrome output was up by 0.7% in Q3 2016. Production of ferrochrome increased in Eastern Europe/CIS & Middle East (+14.5%) and Asia, whilst it decreased other world regions. Overall we can speak about a subdued growth.
3.Can you comment on the progress of ferrochrome development in Oman?
Oman is a long-time chrome ore producer even though relatively new in the ferrochrome industry, having commissioned its first plants in 2013. The Sultanate benefits from low-cost electricity, relative proximity to China and high chrome content ore.
Ferrochrome hot spot is the Sohar port and free zone. Al Tamman Indsil ferrochrome is currently aiming at a 150 000 tpa capacity, Gulf mining announced plans to boost production capacity to 120,000 tonnes per year by around 2017. Majan ferrochrome project for overall capacity of 100 to 120 000 tpa is not known to be completed.
4. What in your opinion is the biggest risk to the industry?
Demand is a major concern since China has been driving the consumption over the last years being the largest stainless steel producing country since 2012 ; given that 75% of metallurgical grade chrome ore go to stainless steel, all eyes are now on China and the industry may also wonder where are the future prospects that will sustain the supply demand balance. Environmental concern is likely to play a role in the future, though the industry is continuously investing in new technological processes, there may be increasing pressure from governments on companies using open furnaces and they shall be encouraged to shift to more environmental friendly options.
5. What information do you expect to have changed in this upcoming conference vs. the one in November in Shanghai?
Though the Shanghai conference was covering various subjects including global issues there was a significant focus on China. ICDA previous event in Kazakhstan was in May 2010, there has been many changes in between, this conference will bring an update on local chrome industries and ICDA delegates would have the opportunity to visit ERG Kazchrome new ferrochrome plant.
6. What can delegates look forward to in Kazakhstan?
Delegates look forward to meet with their peers, network as these conferences also offers outstanding social events. ICDA will also release its 2015 analysis and latest figures for 2016 first quarter which is something that delegates are eager to follow. We make sure, whilst inviting key experts such as Core Consultants on a regular basis, to also renew our speaker panels, offering other perspectives, having challenging thoughts from chrome related topics to global.
This conference is also a major moment for Members to be informed on ICDA latest news and projects for the chrome industry. Astana will be the place for chrome industry Corporate Social Responsibility Awards.
7. Any other information you want to add?
Looking forward to seeing you there!
You can register for the upcoming ICDA Industry Conference in Kazakhstan by clicking here