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(Istanbul)--With a history of more than 30 years in mining and trading business; EKIN MADEN had seen a lot of crisis, bullish and bearish markets where some companies become giants and some get bankrupt.
Today; we are witnessing that the Turkish Chrome Ore Mining is coming to an end, where we are really struggling to find the answer is this End will lead to New Beginnings?
Turkey’s leading chrome ore supplier EKIN MADEN, having an average of 350.000 MT/year chrome export of Turkish material; had a mission to serve his customers with various type and qualities of chrome ore and support his suppliers in terms of finance, logistics, engineering and marketing consultancy.
But in todays unfortunate environment and market conditions, we are sad to announce that these group of companies under EKIN MADEN are shutting down their plants one by one and will be majorly stopping production of typical 48% grade chrome concentrates. And for the existing 48% grade chrome concentrates stocks we have, we will not sell them until the prices recover to a reasonable level which our producers are making profit.
Not only EKIN MADEN but also our good colleagues and market competitors whom are also at the top chrome exporters list are also shutting down their plants. This means that the Turkish export figure estimation for the next year will not be more than 400Kt in total.
Not so long ago, Turkish chrome ores used to have around 20-22% market share in Chinese chrome ore consumption. But systemically South African UG2 and chrome concentrate producers reduced their prices because of the pressure coming from the Chinese FeCr producers. On the other hand Turkish producers resisted this pressure and kept their price stable due to the production costs leading by energy, labour, taxes and license fees as well as other fix and variable costs.
This resistance caused the Chinese FeCr producers changed their formulas with new techniques and started using less Turkish origin but more South African origin materials which lead to a more than 70% (exceeding 78% on September 2015) market share in the Chinese industry as a consequence of ongoingly decreasing of the FeCr prices.
Will Chinese industry continue producing low quality FeCr? What will happen after Chinese change their formula with 100% South African chrome ore? What if one day the South African suppliers will start supplying less chrome ore to Chinese consumers and start selling more FeCr directly to the stainless steel mills? Who can deny that South Africans want more share in FeCr market?
We agree that the chromre ore consumers are enjoying today’s low prices but all the market players should be very careful about that dangerous game where no one from today may predict the outcomes to be faced.
Today the Turkish chrome ore producers are stopping one after the other. This means Turkish chrome ore producers will not be the key players of the industry for a certain period. But the question to be asked;
Is “Every End is a New Beginning”... Big question mark.. !?
Let’s wait and see all together.
--Sources from EKIN MADEN