At a recent summit held at Tianjin, China, an UK based information service provider Roskill and International Chromium Development Association (ICDA) delivered some keynotes on nickel, chromium imports.
Roskill said that China has been the largest importer of chromium and nickel ores over the years and in the past six years, it imported 100pc of its chromium and 83pc of nickel in order to meet the robust demand in the country. That said, from a supply standpoint, China’s import reliance has been very volatile since it bets on just one or two sources. Now with an export ban in Indonesia, China is faced with supply risk of nickel pig iron and nickel ore and many plants in the country are lacking minimum inventory. Additionally, China is also dependent on South Africa for chromium ore. Recently, South Africa announced an export tax to be added to chrome exports which could potentially impact the import prices for most Chinese ferrochrome producers, Roskill stated.
The ICDA speaker added that production outpaced end-consumer demand which reversed price increases in Q1. In Q2, supply tightened due to concerns of weaker demand and a rise in freight costs, a problem that continues to exist. He went on to say that despite the Chinese ferrochrome industry facing challenges last year, it bounced back in the second half of 2020, but is still far away from pre-pandemic levels. This year, challenges like recovery in demand and potential export tax from South Africa are the pressing issues.