I figured out what went wrong. I posted on the wrong board in the first place. Here's the post that I thought I posted here. I posted a second, longer version, to the FWR board, but also this first one. OOOPS. Shoulda waited until the coffee kicked in.
I appreciate very much the work Been There has done to supply this chromium market information. I have further comments on some of these points, just to make clear that there is still some interpretative thinking required to assess the chrome market data.
2008 world demand was approximately 8 million tonnes of ferrochrome. 2009 demand was estimated to fall to around 6 million tonnes. Ferrochrome currently sales for ( ) $1.03usd/lb Q4 contract. So give or take the market is estimated to about a $6 billion dollar market in 2009.http://www.bloomberg.com/apps/news?pid=20601116&sid=aRr2QDJ5Wcbg
There are two grades of ferrochrome, high carbon (the one quoted above) and low carbon, which sells at a substantial premium to HC ferrochrome. To their credit, the smelter type indicated as a possible development by Cliffs will produce LC ferrochrome (last spot price I saw was about $1.85 US/lb.) Even within the HC and LC ferrochrome categories, there are different per cent contained chromium grades, so you have to try and make sure you're comparing apples to apples. Between July and September, ferrochrome prices fell by about 40% on the spot market.
Remember that ferrochrome is processed/smelted/upgraded chromite ore. Current (direct shipping) chrome ore prices (CR>42% South African origin -- ) are $240-$260/tonne and are estimated to go to $300-400/tonnes in 2010 http://www.ferro-alloys.com/Module/News/Content.aspx?NewsType=4&Nid=11127
September data that I looked at had spot chromite ore (Cr:Fe 2.7....i.e. very high grade) going for $185-210/tonne (FOB Turkey). You also have to be careful because most prices quoted in these reports trace back to the price paid on the dock in China. That same Turkish high-grade metallurgical chromite that fetched up to $210 FOB Turkey was getting $250 (median price) delivered to China. In other words, the producer, or the middleman pays all freight costs to get the Chinese market price. I checked charter shipping costs by bulk freighter, and the numbers are in line; $30/tonne to ship from Turkey to China, $10-15/tonne goes to the middleman.
.(). Prices fluctuate significantly by grade.http://www.metalbulletin.com/Article/2316696/NonFerrous/Chrome-ore-prices-to-hit-300-400-cif-in-2010-Yildrim.html
I could not emphasize this detail too much. Grade is everything. Even top metallurgical grade is not getting $300/tonne, and it's not FOB your port, either (although your contract could specify that, surely). The reported numbers are misleading without further context. You sure as heck aren't going to get $300/tonne for refractory grade chromite that's sitting in a swamp in the James Bay Lowlands, however.
Unlike nickel, copper, aluminum, zinc, or lead (not an exhaustive list) chromite and ferrochrome prices do not have any real market support at any time this year. There is a huge overcapacity, and it's a buyers market. IMHO, Noront's plan to do a feasibility study and defer all comments about mine development until that report is completed is the only sensible business decision to make. Floating dreams of 2.8 million tonne annual production, absent the economic case required to demonstrate feasibility, is simply pumping. In my perhaps not so humble opinion.
Lar
