Let us assume large chromite mines eventually will be built in the Ring of Fire area, and that they will be able to sell their product to North American and Chinese stainless steel makers for a much cheaper price than chromite coming from elsewhere in the world.

One consequence would be to reduce output from some of the world's high-cost chromite mines, and to increase the market share of the Ring of Fire Chromite mines. But that is not the point I would like to make here.

If North American (and Chinese) producers, using less expensive chrome supplies, are able to sell stainless steel products at a much lower cost to the world, then the substitution of stainless steel for ordinary steel or plastic may take place.

For example, last week I needed to replace a hitch pin on my tractor. I had a choice between stainless steel and ordinary steel; the stainless steel version cost three times as much. In spite of the undoubted superior performance of stainless for that particular use, its much higher price discourages its use. If the price were only twice as much, more would choose the stainless version. At close to the same price, no one would use ordinary steel.

My point is that eventual chromite production from the Ring of Fire chromite zone may increase world stainless steel usage through cheaper prices and the substitution effect.

If that happens, it will not matter how much higher cost chromite exists elsewhere in the world. What will matter is how cheaply and dependably chromite can be produced from the Ring of Fire mines.

Long and strong...

Rek