NSSC and Ferrochrome Producers Agree in Price Cut for Apr-Jun

Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) agreed with South African ferrochrome suppliers to decrease ferrochrome purchasing price for April-June shipment by 11.5% compared with the previous quarter. The price down followed the precedent price agreement in Europe. Ferrochrome price is expected to rebound for the next quarter when the spot price is already surging with demand recovery for stainless steel products in China.

The new price is CIF 77 US cents per pound of chrome, which represents US$ 883 (87,600 yen) per tonne for 52% chrome products and 10 US cents lower than the price for January-March. The price decreased for 3 quarters in a row. The new price is lower by 64% than the peak in July-September 2008 and hit the bottom in late 3 years. This represents 3,900 yen per tonne of cost down for 18% chrome stainless steel items.

The new price reflected the weak ferrochrome market by March. However, the spot price has already rebounded by 10 US cents from the recent bottom in March thanks to the demand recovery in China. South African ferrochrome producers are suffered from worse profitability under output reductions by 70-80%. Additionally electric power cost will surge in winter of South Africa and summer of Japan. Ferrochrome price for July-September is likely to rebound due to demand recovery and high costs.