(PHOTO: ARNOLDIUS / WIKIMEDIA.ORG)

Chromium is irreplaceable in making stainless steel, the leading end-use, or in superalloys, the major strategic application. The consumption is expected to grow at a strong pace for years. The risk of global production overcapacity is very low as supply and demand are predicted to remain in balance. Ferrochromium production is electrical energy intensive, so constrained electrical power supply may make production very expensive in countries with high power cost. Global competitiveness can be gained by building a robust business model in which chromite ore mining and ferrochromium production are vertically integrated along with strategic partnerships with stainless steel makers. The emergence of China as a significant ferrochromium and stainless steel producers may not frighten in the long term.

Chromium ore, mined as chromite (FeCr2O4) for 30.4 Mt in 2016, is used by 96% to make ferrochromium that is predominately used to produce stainless steel and superalloys, two of its more critical applications, as it enhances hardenability, resistance to corrosion and oxidation.

Lesser amounts of chromite ore are used to make foundry sand (1.50%) and chromium chemicals (2.50%) for catalysts, leather tanning, surface treatments, dye and pigments.

World resources are greater than 12 billion tons of shipping-grade chromite, sufficient to meet conceivable demand for centuries. About 95% of the world’s chromium resources is geographically concentrated in Kazakhstan and southern Africa.

Lumpy ore with over 46% of chromium(III) oxide (Cr2O3) and a chromium-iron ratio greater than 2:1 is preferred, but ores with a lower ratio and as little as 40% chromite are also used.

In 2016, the three leading chromite-ore-producing countries were South Africa (46%), Kazakhstan (18%) and Turkey (12%).

The fraction of chromite ore being supplied by independent producers has been declining, while that being supplied by vertically integrated producers is increasing.

Ferrochromium producers are tending to own and operate mining-smelting plants to secure chromite ore, stabilize feed material price and expand profitability. Furthermore, ferrochromium and stainless steel production firms are consolidating ownership and strategic alliances are being developed to raise entry barriers.

Chromite ore is mostly smelted in electric arc furnaces at 2800 °C (4000-4200 kWh/t) to produce ferrochromium for the metallurgical industry. In 2014, the three leading producing countries of ferrochromium were China (38%), South Africa (31%) and Kazakhstan (10%).

In 2016, most of ferrochromium produced globally was consumed in the manufacture of stainless steel with China (55%), India (7%) and Japan (7%) as the leading countries.

Stainless steel is an iron-base alloy that contains a minimum of about 12% Cr, the amount needed to prevent the formation of rust in unpolluted atmospheres, hence the designation stainless. Rarely stainless steel contains more than 30% Cr or less than 50% iron. It achieves its stainless characteristics through the formation of an invisible and adherent chromium-rich oxide film. This oxide forms and heals itself in the presence of oxygen.

With specific restrictions in certain types, stainless steel can be shaped and fabricated in conventional ways. It is produced in cast, powder metallurgy and wrought forms. Available wrought product forms include plate, sheet, strip, foil, bar, wire, semi-finished products such as blooms, billets, and slabs, and pipe and tubing. Cold-rolled flat products such as sheet, strip and plate account for more than 60% of stainless steel product forms.

Stainless steel is used in a wide variety of applications. Most of the structural applications occur in the chemical and power engineering industries, which account for more than a third of the market for stainless steel products. These applications include an extremely diversified range of uses, from nuclear reactor vessels to heat exchangers, components for chemical processing and pulp and paper industries, boilers used in fossil fuel electric power plants.

From 1980 to 2016 the world’s consumption of stainless has grown at an annual rate of 5.27%, a better value when compared with aluminum (3.86%) and copper (2.74%), and it is expected to grow at the same pace for the next decade since it is one of the most important and indispensable industrial metals, the same as that for superalloys.

Production capacity of chromite ore is expected to remain in balance with consumption.

Chromium materials are not openly traded. Contracts are confidential between buyers and sellers; nonetheless, price-reporting agencies provide benchmark price assessments. U.S. imports for ferrochromium deliver a good approximation for international price. Over last five year, selling prices of all-grade ferrochromium have averaged a value of USD 1,325 per ton of chromium content in the producing country with volatility less than 7%.

The emergence of China as a significant ferrochromium and stainless steel producers may not frighten as environmental concerns, electrical power costs are limiting production. The outlook for chromite ore and ferrochromium consumption follows that of stainless steel, which is the leading end-use for chromium worldwide.

References: The Norwegian Institute of Technology, 1995; ASM International, 2000; USGS, 2014-2017; IMFORMED, 2015; Britannica, 2017; ISSF, 2017