ETI Krom warns that oversupply has returned for ferrochrome

Monday, 19 Oct 2009

ETI Krom of Turkey is satisfied by the fourth quarter charge chrome contract price of 103 US cents per pound Cr with European steelmakers even though the cost structure during July to December 2009 has been changed significantly.

Mr Robert Yuksel Yildirim president & CEO of ETI Krom said that "A 14 US cents per pound rise over third quarter levels will only cover some parts of those adjusted costs."

The price represents, perhaps more than usual, a reference point from which sizeable discounts will apply. Two months ago FeCr producers were confident that spot prices would continue to firm on the back of an improvement in contract prices. However, in reality this has not been the case at the moment.

Turkey is also among the countries which are suffering from a very weak USD and the appreciated TRL is also weighing a lot on our production costs. Despite ETI Krom believes that the mid and long term outlook is positive and better than 2009, he sees no reason today to run their furnaces at full capacity in Turkey.

Mr Yildirim said that "The European alloy steel and stainless steel output has still not yet fully recovered, so we see no reason today to build up FeCr stocks. We try to watch very closely the developments and demand at the market. We are reviewing our current strategy according to current market indications and eager to run our furnaces at half capacity."