What you have alluded to in this and a previous post, is dead on!

Like many bulk industrial minerals, the chrome ore market revolves around the formation of "bonds" between the supplier of the feedstock and the buyer. Let me explain this further. A buyer who has spend $100Ms constructing a processing facility, in our case a ferrochrome smelter, uses/develops a technology which is more or less "fine tuned" or "dedicated" to a particular feedstock. This feedstock, in our case chrome ore, must be delivered in the quantities desired, with consistent physical (i.e. lump size, friable, etc) characteristics and with consistent/uniform chemical composition (%Cr2O3, Cr:Fe ratio). There may be some latitude allowed by the smelter owner, but process modifications to accommodate different feedstocks can be very costly to the operator. Thus a bond will be developed between the chrome ore supplier and the ferrochrome smelter owner. The latter will be very, very reluctant to change suppliers once that bond has been created. This is a barrier to entry for new suppliers of chrome ore. Prices between the supplier and the buyer are not published. This is also a reason why there is some vertical integration between mining of chrome ore and ferrochrome production.

I suspect that similar market characteristics, more or less prevail, between ferrochrome producers and steel makers.

geoprof