Ferrochrome is an essential alloy additive in the steelmaking and foundry industries, but its price is much higher than other alloys such as ferrosilicon and silicon manganese, especially low-carbon ferrochrome, which is more expensive than other specifications of ferrochrome. Do you know why?
Chromite resources are scarce
Chromite is the main raw material for the production of ferrochrome. Although there is a certain scale of chromite in the world, its distribution is uneven, mainly concentrated in South Africa, Zimbabwe, Kazakhstan and other countries.
In addition, chromite ore development is difficult, and most of them are located in remote areas, which increases the difficulty of mining and, to a certain extent, increases the cost of chromite ore, which also affects the price of ferrochrome.
Ferrochrome Complex production process
Ferrochrome smelting needs to produced in high temperature conditions, usually using electric furnaces and other equipment, which consumes a lot of electricity. Low-carbon ferrochrome requires a lower carbon content, so it is necessary to continue smelting low-carbon ferrochrome during the production of high-carbon ferrochrome. This is why the price of low-carbon ferrochrome is higher than that of high-carbon ferrochrome.
The market demand for ferrochrome is high
We all know that the higher the demand, the higher the price, and vice versa. Ferrochrome is an important alloy additive in the steelmaking industry. Every country cannot do without steel. Whether it is high-speed rail construction, real estate development, or the automobile industry, they cannot do without steel, and they cannot do without ferroalloys, especially ferrochrome. Therefore, the price of ferrochrome will not decrease in the next 10 years. On the contrary, the price of low-carbon ferrochrome will continue to increase due to the continuous economic development.
Impact of global trade policies on ferrochrome
The trade policies of different countries also have an impact on the price of ferrochrome. For example, China needs to pay a 40% export tariff for the export of ferrochrome products, so the price is relatively high. For some European countries, when importing ferrochrome, they not only need to pay import tariffs, but also have to bear the price increase caused by the supplier due to export taxes, so the price is generally not competitive.
Why are there still customers willing to buy ferrochrome in China despite high price?
- Quality and Performance.Most of China’s large-scale ferroalloy manufacturers have strong technical strength, advanced production technology, and precise control of other elements in ferrochrome (Cr, C, S, P Si), which can effectively meet customers’ requirements for high-end product production.
- Supply and logistics advantages. China’s ferrochrome industry is large in scale, and even when the global industry fluctuates, it can ensure stable supply to customers through its own adjustments.
- China’s transportation facilities are well developed, with not only roads, waterways, land, and railways, but also other modes of transportation. The transportation cost is relatively low and the delivery time is short.
