NSSC Agrees to Pay 19% More for FeCr in January-March

Nippon Steel & Sumikin Stainless Steel (NSSC) agreed with ferrochrome suppliers of South Africa to reduce the ferrochrome purchase price by 9.4% for October-December shipment from July-September. The price decreased for the first time in 11 quarters when the demand for stainless steel products declined by global economy slowdown. However, the price still keeps historically high level since ferrochrome supply maintains limited by short electric power supply in South Africa.

The new price is CIF US$ 1.93 per pound of chrome, which represents US$ 2,213 or 233,000 yen per tonne for ferrochrome with 52% chrome and is US$ 0.20 lower than July-September price. The price kept upsurge from April-June 2006 except for 2 quarters, which renewed record for 5 consecutive quarters.

The hike is widest compared with US$ 0.18 hike for July-September 2007 though the percentage is lower than 20% for July-September 2007 and 28% for July-September 1995. The new price is 55.4% higher than a year ago and 90% higher than 2 years ago.

The price is higher by 3 times than the bottom at US$ 0.68 in January-March 2006. Ferrochrome price stays high when ferrochrome supply may keep short if the demand for stainless steel products maintains growing at average 5% per year.

Spot ferrochrome price fell to below US$ 2 per tonne recently when stainless steel makers requested the price cut due to their output production. Spot price had reached at US$ 2.7 in the first half of 2008.