High ferrochrome prices could speed sector consolidation -sources – by Pratima Desai (Daily Mail/Reuters – November 30, 2016)


LONDON, Nov 29 (Reuters) – Rocketing ferrochrome prices are expected to accelerate consolidation among producers in South Africa, increasing the global stainless steel industry’s reliance on mining group Glencore and chrome ore company Samancor.

Nearly 60 percent of the world’s production of global chrome ore — used to make stainless steel raw material ferrochrome — comes from South Africa, where Glencore and Samancor are casting an acquisitive eye over smaller rival Hernic Ferrochrome.

Four Sources in the stainless steel and ferrochrome industries told Reuters that Glencore is looking to reinforce its dominant position with the purchase of Hernic, which is majority owned by Japan’s Mitsubishi Corp.

Swiss-based Glencore expects to produce 1.57 million tonnes of ferrochrome this year but has capacity for nearly two million tonnes. Hernic would give it a further 420,000 tonnes.

“Hernic would be a good fit for Glencore … and (Glencore) won’t want to see new players in South Africa’s chrome industry,” said Mark Beveridge, of commodities consultancy CRU.

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