Bentonstocks provided a link to a fine article of June 2007 (entitled "Chromite", by Alison Tran) outlining the worldwide lack of sufficient supply of chromite causing steadily increasing price rises (see http://www.imcl.com.au/pdfs/press/Ch... ). Since that article is over a year old, one might wonder whether that trend is continuing. It definitely is continuing. The post I made last Friday evening, with links to offers to sell chromite ore with grades similar to ours (40% Cr2O3), showed current selling prices at around $400/tonne. (See: http://www.alibaba.com/product-free/... and http://www.alibaba.com/product-free/... ).

Comparing prices shown in the Chromite article of June 2007 (referenced above), we see that the current prices are substantially higher (almost double) the prices reported in this article that is now one year old. This indicates that supply is continuing to tighten and/or that demand is growing and overtaking supply shortages. Some reasons for this are provided in the June 2007 Chromite article. I'll paste below some of the more pertinent quotes (and note also, in the third to last paragraph quoted below, the reference to the value of "beneficiated" [i.e., processed] chromite being 10 times the value of the raw chromite ore. This is the second article where this statement has been found. The first posted to this board was in an article posted by Miskealp (on Tuesday I believe) from a Mining Weekly article. See http://www.miningweekly.com/article.... ):

Zelda du Preez, chief executive officer of Rand York Minerals Pty, exclusive sales agent for Xstrata, said: "Consumers have no choice but to pay higher prices, or they simply will not get material". It is understood that Rand York has now sold out of material and is turning away new orders.

In India, the government imposed a tariff on the export of chromite and concentrate of Rs2,000/tonne ($44/tonne) which took effect 1 March 2007. The measure, which came in response to a domestic shortage, has placed added pressure on already tight world supply especially to China, which consumes 30% of India’s total chromite output.

Domestic ferrochrome producers, notably Xstrata and Merafe, have been lobbying the government this year [to outlaw exportation of raw chromite ore], arguing that short chromite supply is detrimental to the country’s ferrochrome producing capabilites. South Africa’s raw chromite exports to China increased from 760,000 tonnes in 2005 to 1m. tonnes in 2006. Given that beneficiated chrome is ten times more valuable than unbeneficiated chrome, South Africa is understandably concerned about losing added value benefits as well as employment opportunities, through uncontrolled export of raw chromite ore. Xstrata claims that its South African ferrochrome operations lost 16% of market share in 2006 because of chromite exports to China.

Perhaps one of the main challenges for purchasers of non-metallurgical chromite is that consumers do not have a huge choice when it comes to supply. Production is concentrated in just a few countries, notably South Africa which produces about 50% of the world’s chromite, followed by India and Kazakhstan producing about 20% and 15% respectively. South Africa is by far the main supplier of non-metallurgical grades, with smaller tonnages provided by the Philippines, Turkey, Pakistan, India, and Iran. The latter two principally produce for the domestic market. What is more, the market in South Africa is dominated by a few key producers, Xstrata SA Chrome Venture and Samancor Chrome, both based in South Africa.

With growth in China’s stainless steel industry forecast to continue at a brisk pace, it looks unlikely that demand for ferrochrome and chromite will drop off anytime soon. As one commentator put it: "The market outlook remains volatile. Non-met prices are driven upwards by China and also driven by the higher ferrochrome prices. If demand from China calms down, we will see a correction to more realistic levels." Until more supply comes onto the market, consumers of non-metallurgical chromite can expect continuing tightness in supply and rising prices.