Chrome ore prices supported over LNY amid strong demand, restocking – Tharisa

Chrome ore prices are likely to remain strong over Lunar New Year due to comparatively stronger buying and restocking in China, according to Phoevos Pouroulis, chief executive officer of South African mining group Tharisa.

“On the back of demand, chrome ore prices are at a healthy, sustainable level. Whether there will be further appreciation depends on Chinese New Year but there’s a strong case for prices to remain buoyant,” Pouroulis told Metal Bulletin on the sidelines of Mining Indaba in Cape Town on Tuesday.

“Typically, there is a slowdown in buying closer to the Chinese New Year but this year we are seeing more buying and restocking than usual and we feel more positive about demand over that holiday period,” he added.

“The prices of raw materials used in the production of stainless steel are all appreciating, including nickel, coal and chrome. The whole outlook leans favorably toward a robust environment for chrome concentrates,” he said.

Metal Bulletin’s UG2 chrome ore index, cif China, was assessed at $232 per tonne on February 2, up from $199 per tonne on January 5, 2018.

China’s increased domestic ferro-chrome production could result in a chrome ore deficit within as few as 18 months, Pouroulis warned.

“We are seeing capacity increases in Chinese domestic ferro-chrome and this could lead to a deficit in chrome ore in the next 18-24 months,” he said.

Tharisa enjoyed a bumper year in 2017, largely due to rising chrome ore prices, allowing the company to significantly improve its dividend.

“We differentiate ourselves from other mining companies in that we are a dividend payer,” Tharisa’s chief financial officer Michael Jones told Metal Bulletin.

Tharisa is targeting 1.4 million tonnes of chrome concentrate production this year and aims to increase production to 2 million tonnes per year by 2020.

What to read next
The Inflation Reduction Act in the United States may ironically cause global metal market prices to rise for some metals used in electric vehicles (EVs), Fastmarkets sources said
An alarming drop in water levels in Germany’s Rhine River and other key waterways in Europe has led to massively strained logistics in shipping commodities across Europe, driving up costs and exacerbating material supply, sources told Fastmarkets
Fastmarkets is proposing a realignment of its dealer selling price for ferrous scrap machine shop turnings in Houston, effective from the September 2022 monthly settlement.
Participants in the US steel market were divided on the impact of a price increase from Nucor’s sheet mill group this week, with some suggesting hot-rolled coil prices could fall further while others were optimistic that announcement could halt - or even reverse — the recent downtrend
Chromite prices rose further in the two weeks to Tuesday May 31 on support from cost pressures and logistical issues in South Africa
UG2/MG chrome ore prices experienced major declines in the week to Tuesday July 12, dropping by $15 per tonne week on week, as the market saw the beginnings of a break in the continuing stalemate of recent weeks
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
Proceed