At a recent meeting of International Chromium Development Association (ICDA) held at St Petersburg in Russia, Metal Bulletin Research (MBR) pointed out that third quarter prices of ferro chrome may be pushed up by four to five cents per lb.

Over the next two years, MBR was looking at a price range of 45-50 cents per lb for ferro chromium as higher stainless steel production absorbs more chromium units which would bring some cheer to Indian producers.

MBR's forecast said that stainless steel consumption and prices will rise during the second half of 1999, as its consumption was affected by economic rather than structural factors. It forecast a steady growth of 6.5 per cent for 1999-2003 in consumption. The western world's production is forecast to increase to 19.24 million tonne by 2003, resulting in a rise of carbon ferrochrome consumption by 4-4.5 per cent per annum till 2002.

In regard to supply apart from abundance of supplies from South Africa, MBR estimates that there is 1 million tonne of ferro chrome supplies outside South Africa. While Kazakhstan is a fundamental source of supply to the market, material from China and eastern Europe is a swing player in the market. There have been significant cuts in production during first half of 1999 as a result of low prices. The demand for ferro chromium production is likely to increase in the second half.

The preliminary figures compiled by ICDA show that world high carbon chrome production during 1998 was four million tonne. This does not include 5,00,000 tonne of estimated production in Kazakhstan. Production data from the country is not disclosed.

According to reports stocks of ferro chromium have run low in Kazakhstan and they are cutting down on supplies to consumers. They have taken a number furnaces down for relining which will last for a few months. Kazchrome has acapacity of 6,50,000 tonne for ferro chromium. In addition it can also produce 40,000 tonne of medium carbon and 20,000 tonne of low carbon ferro chrome. Total production of these products in 1999 is estimated to be at 7,70,000 tonne.

China is an uncertain producer and exporter of high carbon ferro chromium as it entirely imports its chrome ore, when the market conditions are favourable. Thus China exported 2,68,240 tonne of high carbon ferro chromium in 1995, which came down to 75,379 in 1996, 70,849 tonne in 1997, 65,596 tonne in 1998. But the country had exported only about 6,620 tonne in three quarters of 1999.

Chinese imports of chrome ore which were 1,370,434 tonne in 1995, fell to 7,69,147 tonne in 1996, were 8,94,001 tonne in 1997, 7,11,541 tonne in 1998 and only 1,64,026 tonne in three quarters of 1999.

Fortunes of Indian chrome ore producers depend on their sales to China as it is the biggest market for the country's ore. Thus the country's exports of chrome ore to China were 4,36,011 tonne in1995, which fell to 2,96,877 tonne in 1996 and rose to 3,77,633 tonne in 1997. Exports fell to 3,23,349 tonne in 1998 and bottomed out in three quarters of 1999 to 85,172 tonne.

The world high carbon ferro chrome trade based on imports declared by various countries, which is close to the total world trade, was around 3.13 million tonne in 1998. South Africa was the biggest supplier at 1.74 million tonne, followed by Kazakhstan at 3,03,858 tonne. The third in the row was Zimbabwe, which supplied 1,81,493 tonne, followed by Noray at 1,68,616 tonne. India was at the fifth place with about 1,64,610 tonne.

India exported the largest quantity to Japan at 59,824 tonne, followed by South Korea 43,540 tonne and the USA at 37,300 tonne. The country supplied 16,100 tonne to Netherlands and 3,925 tonne to the UK.