Chrome exports – balancing the picture

Last week’s article on the decline in chrome exports (SA chrome exports take a dive, FTW August 3) has generated significant industry response. Iain McIntosh, general manager marketing of shipping line MOL, agrees that the chrome market is very soft right now. But the facts behind it, he added, were firstly, it is Chinese summer, and a number of steel and stainless steel mills are in shut-down for maintenance – and that weakens demand. “The result is that not only SA exporters but many others are facing price pressure on chrome ore pricing from Chinese importers.” This reckoning agrees with the views of another FTW reader’s comments on SA as an exporter of commodities. “We are price takers,” he said, “not price makers.” And yes, McIntosh added, “there are other factors like global demand.” He pooh-poohed the statement made to FTW by a road transporter about China having an 18-million tonne stockpile. “This,” he said, “is the equivalent of their total imports in 2010/2011 combined.” To illustrate what he said, McIntosh quoted figures from Ferro Alloy Net (See graphic above) – a company in China which specialises in the chrome industry and all things base metal. “They reported that stocks were at 2.55 mt – and have marginally reduced. “I don’t doubt there is some overstock,” he added, “but suggesting 18 mt is wildly inaccurate.” McIntosh also added his thoughts on the war between ferrochrome (a beneficiated ore product) producers and exporters and basic chrome ore producers and exporters. “The debate about the US$100 per tonne tax has been raging for months now,” he told FTW, “and is of great concern due to China’s actions on ferrochrome production and what this does locally – with shutdowns of furnaces.” But he expressed doubts about making firm statements about any of the factors currently plaguing the chrome industry. “What I have said is merely to balance the picture – because there is no hard picture of what is really happening out there. It changes almost daily.”