100 years of stainless steel : chrome ore & ferro chrome perspectives

Prabhash Gokarn, Head Marketing, FAMD

Chrome Ore & Ferro Chrome

Perspectives


Industrial uses & Intermediate Products - Chromite

Refractory Chemical Metallurgical Foundry Sands

Cement kiln Chrome Plating Ferrous Alloys

Fiberglass furnace Corrosion control -Cast Iron

Glass tank regenerator Metal finishing -Steel :

Mag-chrome refractories Pigments alloy

Others Tanning Chemicals stainless

(Chromates, Non ferrous alloys

Di-chromates) Aluminium

Others Copper

Nickel

Others

Metallurgical94%

Foundry Sands

3%

Chemical2%

Refractory1%

Chrome : Usage

Source : ICDA, USGSSource : ICDA, USGS

94%

94% of total chrome 94% of total chrome

used in metallurgical used in metallurgical

applications applications -- prime prime

demand driverdemand driver

Metallurgical UseMetallurgical Use

70% of chrome used in 70% of chrome used in

metallurgical applications metallurgical applications -- is is

for making stainless steelfor making stainless steel

18% is for making alloy steel 18% is for making alloy steel

3%

2%

1%


Chrome Statistics

Source: Heinz H. Pariser, 2010


History Chrome Discovery

Nicolas-Louis Vauquelin in 1797

Chromium-iron spinel now known as chromite (FeOCr2O3).

Colorful salts : name derived from “khrôma” Greek word for colour.

In 1798-99, Lowitz & Klaproth independently discovered chromium from the

Beresof Mines South-Eastern France.

Stainless Steel – 100 years of Stainless Steel – 1912 to 2012

Corrosion resistance of iron-chromium alloys first recognized in 1821 by the

French metallurgist Pierre Berthier

1890s – 1915 : various patents for different iron – chromium stainless alloys.

In 1912 Eduard Maurer invented a ferritic stainless steel. Harry Brearley

usually credited with first patent for Martensitic stainless steel in 1913, & Dr

Hatfield with invention of 18/8 type Austenitic Stainless Steel.


Chrome History in India

• Discovered 1940s

• Sukinda Cr Mines established 1949

• First Ferro alloy plants in 1950s, production of low carbon FeCr in India started in 1967 in FACOR & IDCOL

• Stainless & Alloy steel production in India in Mini Steel Plants (due to Govt policy /JPC). Alloy Steels Plant set up in 1965 and Salem Steel Plant in 1982. Rapid growth in SS production in India from early 1990s. Viraj set up in 1990.


Stainless Steel Trends

• Production Base shift from EU to China. Growth in SS production in India

• Early 2000s AD – SS production dominated by Europe & Asian Tigers

• 2000 - 2010 – Significant shift in Stainless Steel production

• EU & Japan - significant shrinkage

• China & India – significant growth

• Today – Over 35% Stainless Steel produced in China

•

• By 2015 – 60% Stainless Steel will be made in Ch-India

• Non Ni based SS growing : • Geographic reasons – non Ni SS popular in China, India

• Highly volatile Nickel Prices

• Technology upgrade – possible to form 400S SS (earlier it was difficult)

• Use shift towards ART (Transport) and ABC (Construction) from household. Use in process industry growing.


SS Trends • New Applications

– Water Treatment & de salination

– Energy including Nuclear, Solar & Wind

– Transportation

• New Grades

– Super ferritics – more Cr

– Duplex grades

• Stainless steel production technology advances

– Due to nickel price volatility and research advances 400

and 200 series are expected to grow quicker than 300

series

– Demand for engineering and alloy steels expected to grow

strongly

• Double digit growth in SS Consumption (10-12% )

(Growth in SS Consumption is about 1.2 Times GDP)


Chrome Alloy Trends

1990s : Chrome Alloy production located close to SS production (Japan, Europe)

Most SS producers depended on tie-ups with FeCr producers

Major Chrome Alloy producers :

South Africa, Khazakastan, China, India, Zimbabwe

Rapid Chinese Chrome Alloy production increase :

in sync with strategy to become self-sufficient in FeCr

Perhaps in future : as countries protect resources (following India’s example of export duty/ceiling on Cr Ore) production will shift to countries with ore. (ie China priced out).


Chrome Alloy Situation

South Africa struggling to maintain supremacy :

affected by power shortages : losing share to Kazakh & India.

Kazakhstan / ENRC : impressive growth

largest producer on date.

invested in South African reserves for further growth.

India : Government support leading to doubling Ferro Chrome production

restriction of Chrome Ore exports

allowing captive power plants


Cr Alloy Market Today

• Fewer buyers as SS prodn concentrated

into China losing relevance of LT

Benchmark Pricing

• BM being replaced by Bao Steel price

• Bargaining power of buyers > Bargaining

power of suppliers

• SS Mills securing supply of FeCr by equity

investments / forward integration


Chrome Ore Trends – lower

exports from India • Upto mid 2000s : India highly dependent on China for export

of Chrome Ore/Concentrate.

• Early 2000s : High market share for Indian Cr Ore/Concentrate

• Mid to late 2000s : Availability fell, forcing China to look elsewhere

• Policy of “Value Addition” adopted by India forced a shift from Chrome Ore to Ferro Chrome exports

• India’s FeCr share in China has increased :

from zero in 2003, to market share in double digits today.


Chrome Ore Trends – higher exports

from South Africa is temporary

• South Africa not always a large Cr Ore exporter power problems have forced it to export Chrome Ore.

• Talks of India like policy on Cr Ore – once power situation eases.

• Historic precedent of treating Chrome as a strategic mineral

• Value addition mantra for job creation.


Chrome Ore - New Geographies of

Supply becoming significant

• Turkey

• Oman

• Pakistan


Chrome Ore – security driving

value chain integration

• Chinese companies : Cr Ore assets in Zimbabwe &

South Africa.

• Bao Steel : Visa Steel JV

• Posco : LT supply with Visa Steel

• Posco : Samancor JV

• Nisshin : Samancor JV

• GMR : Mine in Turkey


Chrome Ore - Lower Grades ?

• Use of lower Cr Ore grades – UG2 (rejects

from Platinum Group Mineral mines)

becoming significant.

• Increased use of beneficiated Cr ores – Cr

Concentrate in Ferro Alloy making


Future Trends

• Growth in SS fueled by new applications, technology advances, high GDP growth in BRICS.

• Integration of value chain : Cr Ore to SS

• New Geographies of significance : in SS – India, China; in FeCr - SA, India & Kazhak; in Cr Ore : Turkey, Oman, Pakistan.

• LT BM pricing to evolve into a shorter term BM based on China transaction price.

• Use of technological advances in Mineral processing – eg beneficiation and agglomeration and Ferro Alloy making – eg DC Arc technology will increase.

100 years of stainless steel : chrome ore & ferro chrome perspectives

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