Having attended previous Mining Indabas at which chrome was referred to as a dog’s
, or news broke of unpaid debts among producers
Bulletin reporters were surprised to find out that chrome was
the unlikely darling of the 2017 event.
Investor awareness of the chrome market and recent price
performance was particularly interesting.
The enthusiasm was clear from day one of the conference, as
conversations between financial, media and technology
professionals at an evening drinks reception on Monday quickly
turned to chrome.
And rumours that a high-profile mining company is researching
options to gain exposure to speciality, off-exchange metals
prompted further discussion.
Ferro-chrome suppliers reported consistent strong demand. Some
said they were cleaning out years of stock they had held during
the downturn, or that rivals were approaching them for
material, and one chrome market participant admitted he is
fishing for ore offtakes from competitors.
There were even reports of plans to bring long-idled capacity
back into production.
On Wednesday, Metal Bulletin caught up with Phoevos Pouroulis,
ceo of chrome ore miner Tharisa, who confirmed there is increased demand from investors for the
. He believes the investors are
most likely to gain exposure to chrome by buying into listed
miners that pay dividends, giving Tharisa an advantage over
most of its rivals.
"Investors are looking for listed, dividend-paying companies,"
That night, at an investors’ party, mentions of
chrome piqued certain guests’ interest.
The next day, Appian Capital founder and general partner Michael Scherb agreed that chrome looks
promising this year
, but he warned that rallies in niche
markets can unwind quickly.
"This could be a decent year for chrome, cobalt and lithium.
But it needs to be remembered that these niche commodities can
move quickly and that works both ways," he said.
High carbon ferro-chrome
is trading at
$1.31-1.46 per lb, compared with 77-85 cents a year
South African UG2 chrome ore
is trading at
$390-400 per tonne, up from $77-80 last year.
One of the most promising indications that prices will hold up
at recent levels is the narrowing of discounts against
benchmark prices, a theme that has been developing for a few
"Recent, realistic discounts for spot ferro-chrome against the
European benchmark are at about 12-15%. That’s
half the size of discounts in 2016," one chrome market source
told Metal Bulletin on the sidelines of the conference.
Chrome market participants – and the growing numbers
of mining and finance sector professionals hoping to join them
– will continue to track stainless steel growth in
China to gauge how resilient the price recovery is.