Overview of the global chrome market Philippe Richard Secretary General 1st INDINOX Stainless Steel Conference, January 25-26, 2015 - Ahmedabad, India
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Presentation outline 1. Chromite usage 2. Chrome ore Overview of main suppliers and changes in 2014 3. Ferrochrome Latest trends of the Chinese market 4. Indian chrome industry 3
Chromite usage Refractory Foundry sands Chrome ore production by grade Source: ICDA Chemical Ferrochrome production by type Source: ICDA 96% of total chrome ore production is used in metallurgical applications in 2014. High-carbon ferrochrome & charge chrome production represents 94% of global ferrochrome production in 2014. Around 3 quarters of ferrochrome production is used to produce stainless steel. Chrome ore, ferrochrome and stainless steel are highly correlated! Metallurgical Ferrochrome applications Industry sources 4
Functions of chrome in alloying of steel Increase Toughness, carbide forming Tool & HSS, Creep and Wear Resistant steels Increase Hardness Penetrability Case Hardening, Quenched & Tempered steels 60% of all alloy steels contain Cr Scale Resistance Heat Resisting steels Passive layer formation Cr makes it stainless (min 10.5% Cr) Stainless steels 100% of stainless steels contain Cr No No Stainless!
Presentation outline 1. Chromite usage 2. Chrome ore Overview of main suppliers and changes in 2014 3. Ferrochrome Latest trends of the Chinese market 4. Indian chrome industry 6
Global chrome ore production by region 2006 2014 Global chrome ore and concentrate production (est.): 29.4 MT in 2014, down 3% from 2013 (30.2MT) Cr ore production decreased (est.) in Asia of 1.4 MT down 38% y-o-y mainly due to India, because of mining lease renewal problems and in W Europe /Turkey of 8.7% y-o-y Cr ore production increased in Eastern Europe /Middle East: up 5.8% y-o-y, in Americas up 4.2% y-o-y and new record in Africa: +2.5% from 2013 7
South Africa s chrome ore production and trade 2006-2014 18,000,000" (in"tonnes)" 16,000,000" 14,000,000" 12,000,000" 10,000,000" 8,000,000" Cr ore production Cr UG2 production Cr exports Cr consumption 6,000,000" 4,000,000" 2,000,000" 0" 2006" 2007" 2008" 2009" 2010" 2011" 2012" 2013" 2014"" Est." Source:"ICDA,"official"customs"data" South Africa s conventional chrome ore production (est.) expanded 12 MT in 2014, up 10.6 % from 2013 UG2 concentrate production decreased by around 1.4 MT due to the 5-month strike in SA s platinum industry. Affecting local South Africa chrome ore supply, but also exports (UG2 accounts for about 40% of total SA chrome ore exports) But ferrochrome production est. in South Africa increased by around 0.57 MT, up 18% from 2013, pulling chrome ore demand. Q11Q3"" 2013" Q11Q3" 2014" 8
China s chrome ore demand Cr ore production Cr imports Cr consumption Source: ICDA, official customs data No Cr ore production (0.1% of global chrome ore reserves) China consumes 40% of global chrome ore production China s chrome ore imports reached 10.6 MT in 2014 (est.) down 4.3 % from 2013 due to low prices. From SA: - 896 KT (-13.3% y-o-y), Turkey: -509 KT (-25.6% y-o-y), Oman: -201 KT(-29.4% y-o-y) Stocks in China decreased, current level under 1.8 MT, a low level since years 9
Presentation outline 1. Chromite usage 2. Chrome ore Overview of main suppliers and changes in 2014 3. Ferrochrome Latest trends of the Chinese market 4. Indian chrome industry 10
Global ferrochrome production by region 2006 2014 Global ferrochrome production (est.): 11.4 MT in 2014 up 5.5 % from 2013 Africa s production increased by +20 % y-o-y. Asia s production decreased down 1.3% y-o-y Turkey's production is reduced slightly to avert accumulating stocks. Oman entered the ferrochrome industry in July 2013, and production is ramping up in 2014 11
China s ferrochrome demand & supply Fe Cr production Fe Cr imports Fe Cr exports Fe Cr consumption China s ferrochrome production (est.) decreased: 3.85 MT in 2014 down 3.2% from 2013. Some manufacturers left Cr market in 2014 and many others reduced their capacity due to environmental issue and low Fe Cr price from stainless producers China surpassed SA since 2012 (higher local Fe Cr demand and SA production cuts)? Will South Africa regain the #1 rank Fe Cr producer 12
China s ferrochrome imports Source: China customs China s HC Fe Cr imports (est.): 2.0 MT in 2014 up 9.4% from 2013, including almost 1.4MT from South Africa (imports increased by 28%) Chinese government abolished the import duty on HC ferrochrome but not on LC and MC ferrochrome Ferrochrome imports in 2013 & 2014 supported by: o weakening currencies of China main ferrochrome suppliers (South African Rand, Indian Rupee, etc.), o lower chrome ore imports into China in 2014
Presentation outline 1. Chromite usage 2. Chrome ore Overview of main suppliers and changes in 2014 3. Ferrochrome Latest trends of the Chinese market 4. Indian chrome industry 14
India s rank in the Chromium Industry Chrome ore reserves: world s 5 th largest after South Africa, Zimbabwe, Kazakhstan & Finland (first discovered in India in 1903, resources of 203 million tonnes as on 1 st April 2010*) Odisha accounts for 93% of India s resource Chrome ore production: world s 3 rd largest after South Africa & Kazakhstan. Ferrochrome production: world s 4 th largest after China, South Africa & Kazakhstan. Ferrochrome exports: world s 3 rd largest after South Africa & Kazakhstan. *Source-Indian Minerals Yearbook 2012 15
India s chrome ore production and trade 2006-2014 Cr ore production Cr imports Cr exports Cr consumption Peak of around 3.6 million tonnes in 2006 2.6 million tonnes mined in 2013: 2.38 million tonnes consumed domestically including stock 0.22 million tonnes exported. In 2014, India reduced its chrome ore production because of mines closure in Odisha due to mining lease renewal problems. Sharp decline in exports after imposition of export duty (30%) & focus on value addition Imports mainly lumpy ore from Oman
India s ferrochrome production and export Fe Cr production Fe Cr exports First produced in India in 1967 Industry is relatively consolidated- 6 producers account for 80% of output Ferrochrome production in India stabilized at around 1 MT per year since 2010. About 50% domestic consumption with the rest being exported. In 2014 Fe Cr decreased (est.): 0.82 MT down 15.8 % from 2013 17
Indian stainless steel production Indian ferrochromium production follows well the growth of the Indian stainless steel production India s ferrochrome production (1987-2013) India stainless steel production (1984-2014) Huge potential for growth as per capita consumption is low at about 2 kgs Speaking at our Chromium 2014 event Ms Nirmala Sitharaman said:..indian government is making serious effort to improve the economic condition and support investment initiatives So, it is just an opportune time to have a meeting of this kind particularly the very important sector that is chromium as well as stainless steel, in which sector the application of chromium has a major role to play
Few additional thoughts in conclusion Chrome ore in 2015: Will Chinese chrome ore imports especially from South Africa still remain high level and will the SA strike problems be monitored closely? Turkish supply is expected to be limited, what about other countries like Iran, Albania, Pakistan? Will the chrome ore supply/allocation problems in India persist in 2015? Ferrochrome in 2015: Energy price increases could be again a problem in South Africa, will they regain the #1 rank Fe Cr producer? Will the Chinese ferrochrome industry situation, in crisis (rising costs, environmental issues, plants cutting production), last in the future? Stainless steel in 2015: US stainless steel production is expected to continue growing due to strong demand. What about Europe? Will China continue to increase its stainless steel exports? Hope that global stainless steel production will grow in 2015 and particularly in India! 19
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