LONDON (Scrap Monster): The demand for chrome ore is estimated to rise in 2011 as the major producers in South Africa, Kazakhstan, India, Turkey, Oman, Pakistan, Iran and Albania are struggling from expensive production costs mainly due to higher oil prices.

Due to the higher production costs many miners strive to maintain the existing chrome ore production capacity. South Africa's high electricity and labor costs have led to a substantial increase in costs of chrome ore production. On this the price of chrome ore are expected to rise as some mining companies may even close production.

In the next five years, steel production is expected to boost unprecedented demand for chrome ore and iron ore. At the same time chrome ore production is estimated to dwindle in 2011. As the chrome ore mining is struggling with high costs of production, the ability to meet demand for chrome ore by 2012 is in doubt.

Albanian Minerals has increased 10% of its monthly chrome ore prices for Q2 2011. Albanian Minerals indicated that the chrome contract prices were expected to soar by 10% in the Q2 due to strong demand in Europe, China, US, India and other countries, and a further increase in demand of 20% in 2011.

Due to the increases in the production and transportation costs, Albanian Minerals & Bytyci SHPK has decided to revise its chrome ore prices for Q2 and Q3 2011 accordingly.

The prices of ferrochrome would rise to USD 1.40 per pound from the current USD 1.25 per pound. Also, the contract prices of low carbon ferrochrome would increase to USD 2.35 to USD 2.40 per pound from the current USD 2.20 per pound.

Increased demand from stainless steel mills will boost the demand for ferrochrome this year. Stainless steel production in 2010 increased 40%, a further increase of 6% is expected in 2011. Investments on infrastructure in China, India and Brazil would boost the demand for stainless steel.

Meanwhile, the Mines and Mining Development Ministry of Zimbabwe has banned all chrome ore exports from the country with effect from Tuesday as a loss-control measure, aimed at plugging one of the major holes through which the country had been losing revenue. This would also add ire to this growing supply concerns in chrome ore.

source http://www.scrapmonster.com/news/chrome-ore-demand-to-surge-supply-to-crunch/9/1547