NSSC’s Ferrochrome Purchase Price Increases by 32% for April-June

Nippon Steel & Sumikin Stainless Corporation (NSSC) agreed with Xstrata of Switzerland in price hike of ferrochrome by 32.1% for April-June shipment compared with January-March. NSSC followed the hike range approved by European stainless steel makers. Because Ferrochrome supply is relatively tightening when Chinese stainless steel output maintains high level and European stainless steel demand is recovering while ferrochrome production cost is rising in South Africa. The price hike reflected these factors. Production cost of stainless steel products, 18% chrome series, is expected to surge by about 13,000 yen per tonne due to the ferrochrome cost up.

The new price is CIF 144 US cents per pound of chrome, equal to US$ 1,651 or 154,100 yen per tonne with 52% purity. The price increased by 35 cents from January-March and rebounded after 2 quarters. The new price is 1.9 times of the recent bottom in April-June 2009. Ferrochrome suppliers in South Africa, including Xstrata, requested the price hike strongly when electric power price has surged by 25% since April and by 80% in winter of July-September.

India’s spot purchasing price of ferrochrome seems to have risen by 50 US cents per pound or more from the recent bottom price and exceeded the quarterly contract prices. The demand for stainless steel products is in the recovery trend while raw material and energy prices are surging. Consequently, chrome price may increase more in and after July.

NSSC approved the hike for stable management of chrome suppliers in South Africa. NSSC has requested to the supplies not to raise ferrochrome price too rapidly.