Global ferro chrome market in sweet spot with stainless steel demand booming-Glencore CEO

Global steel demand has rebounded with the announcement of infrastructure-intensive fiscal stimulus packages by governments around the world. This has boosted demand for white goods and stainless steel. Gary Nagle, CEO of multinational mining entity Glencore, has said that high demand for stainless steel is driving the ferro chrome market higher.

"Without ferro chrome, you're not going to have stainless steel, and without stainless steel, you're going to have to produce more steel more often, because stainless has greater longevity. In the longer term, stainless steel is better for the environment than using non-stainless type products that have shorter lives and need to be replaced more regularly," Nagle said at the media conference held recently to declare Glencore's half-yearly results.

SteelMint has reported earlier that Glencore's ferro chrome production reached 773 000 t in H1 CY'21, which is 307 000 t or 66% higher than in the corresponding period of 2020. This reflects, in part, that mining and smelting operations were suspended for much of Q2 FY'21 owing to South Africa's national COVID-19 lockdown.

Growth drivers
According to data furnished by the International Stainless Steel Forum (ISSF), stainless steel production increased by 22% y-o-y to 30 mn t in H1 of 2021. Most of the increase in production came from Europe and the US, where production in Q1 FY'22 jumped by 11% and 9.7%, respectively. Not surprisingly, these markets have witnessed an unprecedented resurgence in steel demand and prices with the effects of fiscal support playing out.

"Ferro chrome doesn't get the headlines like the coppers and the nickels and the cobalts of the world do, but certainly in being essential for stainless steel, ferro chrome is a critical part of the green mix," said Nagle underlining the growing preference for stainless steel over ordinary carbon steel. Increasing application in pre-engineered buildings and additional demand from the construction and automotive and transportation sectors are expected to keep stainless steel demand elevated in the coming years.

As a result, the global ferro chrome markets continue to witness an uptrend. Prices in China hovered around $ 1,700/t in end-Jul'21 on slight material shortage in the market amid robust demand from stainless steel producers. The European benchmark price, too, rose over 32% in Q1 FY'22.

Nagle further informed that the company was seeking to adopt strategies to mitigate emissions, especially Scope 2 emissions, for its mining and smelting operations in South Africa, as it consumes huge amounts of carbon-intensive electricity bought from the state-owned facility Eskom.