article on the foundry industry and chromite

I.M. Magazine

Chinese foundries turn to chromite as zircon substitute

26 April 2012

High zircon prices threaten supply chain, as foundries eye cheaper chromite.

Chinese foundries have now started to turn to chromite sands as a replacement for costlier zircon, as high prices for the refractory and ceramic mineral have hit profits.

It is understood that small and medium sized Chinese foundries, particularly small-sized pump manufacturers, have widely used chromite sands of 70/140 mesh or 100/200 mesh to replace zircon.

Evaporated Pattern Casting (EPC) manufacturers have also started to import chromite to replace zircon due to the limited availability of domestic chromite.

Over 80% of imports are coming from South Africa, Turkey and India, but export policies within these countries – indeed India has already limited chromite ore exports – which threaten to tighten supplies even further.

While chromite has similar properties to zircon, it cannot replace the mineral in high-end precision casts for export markets. As such, chromite substitution is not expected to impact the market for zircon in these higher quality markets.

Recent foundry conferences have promoted more co-operation between zircon suppliers and buyers to speed up the stock flow.

Foundries are also developing new production and management techniques to improve efficiencies and increase their profits.
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Three points to that article.

"While chromite has similar properties to zircon, it cannot replace the mineral in high-end precision casts for export markets. As such, chromite substitution is not expected to impact the market for zircon in these higher quality markets."

S.A. foundry grade is a poor cousin to the high end quality of ORC's Spherichrome. Once these foundries find out about the quality differential Spherichrome has over S.A. grade and the price being a third the cost of Zircon, and the same as S.A. grade, they will ask for samples and all going well, they will move over. Management spoke about the higher level of interest in the quarterly.

".......encouraging test results which clearly demonstrate SpheriChrome™ performing very well as a zircon replacement material in the foundry industry. This acceptance is being demonstrated by current sales at premium prices. The focus is now increasing sales volume in these markets."

One interesting point that should be noted is that Spherichrome can be mixed with either Zircon or S.A. chromite. But South african chromite is not mixed with Zircon, due to the sieve range being too wide. I'm expecting a major part of sales moving forward will be Spherichrome used as a mixer to foundries that only use Zircon.

just a diagram of the strength differentials.

My second point:

South Africa, Turkey and India are growing tired of exporting their chromite to China when they could produce everything themselves. Watch for these governments to tighten chromite exports even further and prices move higher.

Also, Iluka have confirmed yesterday that the price of Zircon is stable at $2,350t for the last quarter. They have reduced their supply, but this is holding the price high. They also state that sales have increased in April.

Every foundry around the world will be looking for some way to cut this high Zircon input cost. When ORC get this plant to name-plate and can actually guarantee these foundries supply, I'm sure we will see some interesting announcements.

Pep

Thanks to I.M. for letting me publish the article.