the boom of chrome has just started

China to import over 2 million mt of ferrochrome in 2008: Kermas

Hong Kong (Platts)--27Mar2008
China will import more than 2 million mt of ferrochrome in 2008, marking
an increase of a minimum of 650,000 mt from last year, Wan-wu Dong, director
of marketing for Kermas China, said Thursday at the Metal Bulletin's 9th Asian
Ferroalloys Conference in Hong Kong.

Dong said China imported about 1.39 million mt of ferrochrome in 2007, up
sharply compared with only about 449,385 mt imported in 2006, while imports in
2005 were 233,140 mt. Kazakhstan, South Africa and India are the three major
exporters to China. Kazakhstan exported 616,619 mt of ferrochrome to China in
2007, followed by South Africa with 551,632 mt and India with 181,991 mt.

The continued growth of stainless steel production in China will continue
to drive the country's ferrochrome imports. Dong said.

"In 2007, China increased its stainless steel production by 40%," Dong
said, adding that China was the driver of growth in the stainless steel
industry and that its consumption of ferrochrome would increase further.

Chinese ferrochrome production is not sustainable due to the Chinese
government's pressure to reduce output by energy-intensive and polluting
industries, plus the rising chrome ore import price.

Dong also pointed that South African producers' ferrochrome output was
limited by the power concern in the country. "Electricity shortage in South
Africa is a big threat," Dong said, adding that producers' stock levels of
ferrochrome, particularly in South Africa are at a critically low level and
forecasting supply to tighten further.

Dong said that ferrochrome prices in China would continue to rise as the
rapidly expanding consumption in China has changed the market's dynamics,
while the medium-term shortage of electricity in South Africa would remain a
concern.

"The boom of chrome has just started," he said.