The export of chrome ores from South Africa for use in the ferrochrome smelter of Chinese stainless steel group Tsingshan’s stainless steel plant has contributed to global growth in chrome ore supply.
“Although the plant receives supply from China, which is re-routed South African material, and Turkey, it is mainly South African ore that gets fed into the smelter. The growth in the chrome industry in South Africa has come exclusively from chromium ores,” states international metals and minerals consultancy Roskill senior analyst Olivier Masson.
He highlights that development of the ferrochrome industry in China has also led to reliance on imported chromium units, which are nearly exclusively imported from South Africa, specifically growing contributions of upper group 2 chromites, which are a platinum group metals by-product.
Masson highlights the significance of this, as Tsingshan’s Indonesian mill exports stainless steel back to China, although not exclusively.
As China has a large share of the global crude stainless steel market, Masson mentions that ferrochrome smelters in Indonesia and China contribute significantly to stainless steel production in both countries.
“For the next decade, we’ve got an average yearly consumption growth of about 3.7%. In recent years, consumption has increased globally, particularly in China. As Chinese consumption has grown, so has supply.”
He further notes that, in 2018, China accounted for 52% of global crude stainless steel production, compared with 27% in 2008. Its share of global production in 2018 was slightly lower than in 2017 because of the ramp-up of capacity in Indonesia.
Masson highlights that the initial import of material by China from Indonesia limited the scope for extra production growth in China.
Since then, however, Indonesia has started to diversify its exports of stainless steel materials. Many materials have been exported to countries such as the US and Taiwan. Masson expects this to continue, as China has imposed anti-dumping duties on Indonesian stainless steel.
“We will probably see Indonesian stainless steel exports diversifying further. It’s the growth in Indonesia in 2018 which took a bit of China’s global share of stainless steel output.”
Emphasising that South Africa’s supply of chrome ores would be significant to this production of stainless steel in China and Indonesia through the production of ferrochrome, Masson adds that Zimbabwe has also become a contributor to the global stainless steel market through its chrome ore supply, and could increase its supply in the coming years.
Chromium industry body the International Chromium Development Association (ICDA) held its thirty-fifth anniversary conference in Zimbabwe, Victoria Falls, earlier this month. It was the first time in the history of the ICDA that a head of State – Zimbabwe President Emmerson Mnangagwa – attended and opened the conference with a keynote speech.
This is indicative of significant interest in Zimbabwe as a supplier of chrome ore, states Masson, adding that the lifting of the export ban on chrome ore in 2015 and a changing political climate have also contributed to the country’s increased chrome ore supply.
“Zimbabwe joined the leading chrome producers in 2018, with more than one-million tonnes a year of production, and it’s looking to increase that to up to three-million tonnes a year by 2022/23. There are several logistical, capacity and policy issues along the way which Zimbabwe needs to overcome to reach those goals,” states Masson.
He says several nickel production operations in Africa also contribute to stainless steel production.
The Ambatovy nickel mine and refinery, in Madagascar, produces nickel briquette, which is a Class 1 material that can be used to produce stainless steel as well as non-stainless steel applications.
“In Zambia, miner Consolidated Nickel Mines restarted the Munali nickel mine in the first quarter this year. The mine produces concentrate that is refined elsewhere, but the company is considering the possibility of conducting the refining itself into either metal or a sulphate.”
Meanwhile, Masson stresses that stainless steel contributes to a range of applications and industries, with the global industry expected to grow along with the global economy.
However, one potential risk area is using stainless steel in vehicle exhausts, which generally does not contain nickel, but uses chrome and other alloy agents.
“The reason we see it as a risk is that, with the move to electric vehicles (EVs), an exhaust system is going to become redundant. The share of EVs globally is very small, but in about 10 to 20 years, that share is going to increase at the expense of internal combustion engine vehicles.”