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Cyclical principle of ferrochrome market

13 November 2013

The stability of the ferrochrome market in the United States and some other European countries is due to the constant shortage of this raw material. Though the demand is not very large, but a small number of proposals related to the reduction of the release of this product allows you to maintain a price range on the same level.

Low levels of consumer activity is due to a lull in the market related to the conclusion of the next year's supplies almost all the major producers of stainless steel. It is this contingent of industry is a major consumer of ferrochrome. The cost of finished products in the industrial compartment varies slightly depending on the quality and composition of the material. High-carbon compounds are almost half the price than their counterparts with low percentage of carbon content.

In the market segment responsible for the production of this kind for at least the last ten years we have seen a strong cyclical increase and decrease in consumer demand for raw materials. In 2000, total production of ferroalloy important in the context of the entire world community is estimated at nearly five million tons, in the next year to a demand for raw materials fell by almost a quarter. In 2002, again there is growth in consumer activity, and in 2003 — its decline. In the past three years, the growth of production capacity of enterprises involved in the production of structural materials in demand of almost ten per cent per year.

The scope of application of this material is the production of low-alloy steels character, so the consumer activity to a greater extent affect the stability of the market of metal products such properties. Incidentally in the material at a content of about twelve percent pure chromium steel, which is present in the composition of this component does hardly rusts.

The growth of production of ferrochrome detects the presence of chromite deficit — the main component in the manufacture of such a sought-after material. Such a deficiency provokes a rise in the cost of raw materials, which may adversely affect the value of the finished product. Increased productivity due to the influence of time, explains the change in the production technology of this kind of material in recent years. Another prerequisite for the modernization of the manufacture process based on chromium metal became high toxicity of some compounds of the substance.

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