FOCUS: Can a chrome ore export tax enhance the competiveness of South African ferro-chrome?

Discussions about a proposed chrome ore export tax in South Africa have dominated the global chrome market since it was put forward by the country’s cabinet on Thursday October 22.

One of the more hotly debated aspects of the proposed tax is whether or not it can achieve its stated purpose, which is to support domestic ferro-chrome production by fundamentally enhancing South African producers’ competitiveness over their international counterparts.
Amid a lack of clarity over the proposed tax, Fastmarkets examines how the South African ferro-chrome industry might be supported by such a measure, and whether this could boost domestic producers’ competitiveness as intended.
Struggling sector
South Africa, with 4.9 million tonnes of ferro-chrome production capacity, is the world’s second-largest ferro-chrome producer after China.
The African nation produced 3.64 million tonnes charge chrome in 2019, down by 10% from 2018, data from International Chromium Development Association shows.
But the industry has struggled in recent years owing to a range of factors, including low prices, oversupply and rising production costs mainly caused by electrical and logistical issues.

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Siyi Liu

November 02, 2020

08:10 GMT