Operating context

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Operating context

The global position of ferrochrome

Elements influencing the global demand for and pricing of ferrochrome

  • Global economic conditions
  • Exchange rates
  • Stainless steel demand
  • Growth of Chinese ferrochrome industry
  • Chrome ore exports

90% of the ferrochrome produced is used in stainless steel and specialty steels

4.1% growth rate forecast for stainless steel production in 2018

Ferrochrome production and its role in stainless steel

Produced by high-temperature reduction (smelting) of chromite, ferrochrome contains iron, chrome, minor amounts of carbon and silicon, and impurities such as sulphur, phosphorous and titanium.

Chrome is a metallurgical marvel. It brings critical properties to the metals with which it is alloyed. Add it to carbon steel in the form of ferrochrome and the steel becomes ‘stainless’ – corrosion resistant, mechanically strong, heat resistant, hard wearing, shiny and glamorous. Stainless steel is used almost everywhere in modern life from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

Specialty steels produced for applications such as tools, injection moulds, camshafts, etc also derive the high mechanical strength, hardness and heat-resistance required from their chrome content.

Key statistics for 2017
  • Global ferrochrome production increased from 11.1 million tonnes to approximately 12.3 million tonnes.
  • Ferrochrome consumption increased by approximately 7% in 2017 to 12.2 million tonnes.
  • South Africa produced approximately 3.6 million tonnes in 2017.
  • China consumed approximately 13.9 million tonnes of chrome ore in 2017 with South Africa accounting for 71.9% of imports into China.
South African chrome industry
Approximately 29% of the world’s ferrochrome production was supplied by South Africa in 2017
Over 72% of the world’s chrome reserves are in South Africa
Provides over 200 000 direct and indirect jobs

Challenges faced by South African ferrochrome producers
  • Increasing production costs
    • electricity
    • labour
  • Socio-political challenges
  • Legislative uncertainty
  • Commodity prices and demand
  • Chrome ore exports


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