Ferrochrome Production

Surging demand for ferrochrome used in making ferroalloy, which in turn is used in making stainless steel, has led to a severe shortage of chromite. Such supply condition is driving up prices of chrome ore. Ferrochrome production for metallurgical applications uses up more than 90% of the worlds chromite output of about 19 M tonnes/y. Non-metallurgical applications consumer only a fraction of chromite production, with the refractory industry accounting for only about 1% and 3% each for the foundry and chemical industries. The non-metallurgical industry is dependent on chromite requirements of the metallurgical industry as most chromite is manufactured by vertically integrated ferrochrome producers. Major traders of non-metallurgical chromite from South Africa provide more than half of global chromite supply. The declining availability of chromite is becoming alarming, especially when non-metallurgical applications are indicating increased demand for the material. The International Chromium Development Association noted that the metallurgical and foundry sectors both achieved an increase of about 10% in chromite consumption in 2005. Refractory consumption rose by 19.5% from 101,000 tonnes to 125,000 tonnes in 2005, while the chemical industry's chromite use dropped 21% from 752,000 tonnes to 595,000 tonnes. The supply shortage is mainly attributed to the booming stainless steel industry, which consumes more than 90% of the world's ferrochrome supply. Prices have also soared, with non-metallurgical chromite consumers compelled to match metal prices to ensure supply. Prices recently climbed further due to several developments, including a new tariff imposed by India on chromite exports; and speculations that South Africa is considering a new legislation that would ban the export of unbeneficiated chromite. South Africa accounts for about 50% of global chromite production, followed by India and Kazakhstan with about 20% and 15%, respectively. Demand for chromite and ferrochrome is expected to remain strong mainly due to the continued growth of China's stainless steel industry. A table shows chromite ore and concentrates production by end use sectors during 1999-2005. A line graph illustrates the price history of South African chromite special grades during Jan 2003-May 2007. Another table lists chromium ores and concentrates production of 20 countries in 2005, in tonnes/y.