Johannesburg - Demand for South African ferrochrome into Europe will decline as the European stainless steel industry is in full consolidation mode and companies are forced to keep operations as efficient as possible, Outokumpu Chrome VP ferrochrome sales Mauri Kauppi said.
European stainless producers are reconfiguring their businesses to become more cost competitive with players elsewhere in the world, notably the lower-cost producers in India and China, he told delegates at Metal Bulletin’s African Ferroalloys conference in Johannesburg.
Outokumpu is in the midst of merging with ThyssenKrupp’s Inoxum division. As part of the European Competition Commission’s demands,
Outokumpu must shed its flat steel products smelt shop in Terni, in Italy.
Producers will focus on cost efficiencies in their operations and he expected inefficient smelters to close down.
“For Europe it means there will be less smelting capacity and, therefore, less consumption of ferroalloys,” Kauppi commented.
He expected Europe to retain some stainless steel capacity in 15 to 20 years.
“If Japanese producers are going to continue, surrounded by Asian tigers, we should do it,” he said.
Lack of new investment in European ferrochrome projects meant that the stainless producers would continue to rely on ferrochrome imports, he added.
Outokumpu, which owns the Kemi chrome mine and the Tornio ferrochrome plant, in Finland, is spending €440-million ($603-million) on an expansion project that will double its ferrochrome capacity to 530 000 t/y by 2015.
The mine produces around 1.3-million tons of chrome ore a year.