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Exclusive Interview with Dmitry Pastour, CEO, UniChrome AG

We spoke to UniChrome about Ferrochrome and recent changes in the industry. Hear more about what will be happening to the European market at this year’s International Ferroalloys Conference, taking place this November 17 – 19 in Budapest.

Fastmarkets: Please tell us a bit about yourself and your background in the industry

Dmitry Pastour: For the last three years I am managing UNICHROME AG, a Swiss company, active in global trading of metals, ores and ferroalloys. One of the most important fields in which we focus our expertise and activities is chrome ore and ferrochrome pricing, trading and production.

Prior to UNICHROME, I was involved in metals and ferroalloys, particularly in the Cr and FeCr industry for more than 20 years, holding senior management and directorship positions at several global mining companies with responsibility spanning from metals and ores product management and strategic development to commerce and global sales and marketing of Cr and FeCr products.

Fastmarkets: Can you summarize what have been some of the most recent changes in the Ferrochrome and Chrome industry?

Dmitry Pastour: In 2019 we observed serious changes in South Africa due to the significant drop in ferrochrome prices. The largest known chromite reserves owner in the world changed their ownership and operates its FeCr production at 50% capacity, and the biggest FeCr producer there has announced production cuts. Also, due to various reasons the rest of the producers have temporarily or completely stopped their ferrochrome production at this time.

Over the last couple of years the bidding price announced by the largest stainless steel makers in China gained importance on the global ferrochrome market, and even some of the European consumers consider the level of the domestic prices in China as a basis for their purchase from global suppliers.

For the first time in quite a while the European ferrochrome indications fell below the level of the Chinese domestic ferrochrome prices.

Indonesia became another significant player in stainless steel production, shifting consumption from melted FeCr to Cr ore due to its steel production process, using liquid ferrochrome from its own production.

Fastmarkets: With the over-supply of high-carbon Ferrochrome, what will be happening to the European market?

Dmitry Pastour: The current over-supply is closely related to the European economic slowdown.

On the other hand, the European spot high-carbon ferrochrome prices are currently at levels not seen since 2009 on the backdrop of similar decline of the general economic data, like the manufacturing PMI in Germany, for example.

For most of the FeCr producers in the world, sales to the European market are now giving worse returns compared to any other region, including China.

Most of the FeCr producers are suffering and decreasing their production.

Due to the above reasons, combined with recent improvements in the Chinese market, we expect this oversupply in the EU to ease down and the market to recover.

Fastmarkets: What has the impact of protectionism and the ‘trade war’ been on the chrome industry?

Dmitry Pastour: I see two major effects:

The first one comes from the consumption side. The trade war provides negative sentiment for the world economy and manufacturing in many regions is slowing down. This slowdown includes the main chrome consuming industries, such as the stainless-and special steel production, not only in China and the USA but also in other regions like Europe, as we just discussed.

The second one comes from the production side and is related to the currency effect. The trade war and related risks had a negative effect on all FeCr and Cr ore producing countries’ currency exchange rates against the US dollar. This includes RSA rand, Kazakhstan tenge, Turkish lira and especially the RMB devaluation put significant pressure on the Cr and FeCr global market price, which is traditionally set in USD.

Hear more about what the future holds at this year’s International Ferroalloys Conference, taking place this November 17 – 19 in Budapest.

This content is provided by Fastmarkets MB Events for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.