Serving as a crucial strategic resource, chrome ore is widely applied in metallurgy, industry, refractory materials and chemical industry. The most important usage is in the form of ferrochrome that plays a key role in producing stainless steel and super alloys in the metallurgical industry, and is able to greatly enhance the hardness and corrosion resistance of stainless steel. Besides, there is no ferrochrome substitute for the time being, except for some chromium-containing scraps partially working as an alternative to ferrochrome.
China is extremely short of chrome ore resources. Domestic chrome ore deposits are small in scale, scattered in distribution, and poor in development and utilization conditions. In addition, reserves of high- and low-grade ores are roughly on a fifty-fifty basis. There are few open-pit mines, and high-grade chrome ore has basically become depleted. The main chrome-iron mines in China involve Luobusha chrome-iron mine in Tibet, Dadao'erji chrome-iron mine in Gansu and Saltohai chrome-iron mine in Xinjiang, etc. According to the data released by the Ministry of Land and Resources (MLR) in 2018, proven chromite reserves in China were 11.93 million mt, mainly distributed in 13 provinces, municipalities, and autonomous regions, of which, 4.251 million mt from Tibet, accounting for 39.4%, 1.744 million mt from Inner Mongolia, accounting for 16.5%, 1.652 million mt from Xinjiang, accounting for 15.3% and 1.496 million mt from Gansu, accounting for 13.9%. The reserves of the above four provinces (regions) totalled 9.143 million mt, making up 84.8% of the total reserves in China.
China is the largest buyers of chrome ore, as well as the largest producer of ferrochrome and stainless steel. According to SMM statistics, the grade of chrome ore in China was relatively high at about 56%, and its content of chromium trioxide was about 68.4%. In 2021, China's chrome ore output was about 100,000 mt in physical content (or some 42,000 mt in metal content), an increase of 34,000 mt compared with 2020. From the perspective of regional distribution of output, China's chrome ore capacity was mostly distributed in provinces of Tibet, Gansu, Qinghai, and Xinjiang, with a total capacity of 160,000 mt in physical content.
The grade of China's main imported chrome ore was about 41%. In 2022, China imported about 4.21 million mt in metal content (about 15.01 million mt in physical content) of chrome ore, basically unchanged from 2021, but up about 110,000 mt in metal content (some 400,000 mt in physical content) compared with 2018, and its compound growth rate was 0.68%. Pandemic temporarily shed a shadow over chrome ore imports in 2020. In 2021, chrome ore imports added 180,000 mt in metal content (approximately 660,000 mt in physical content), or a year-on-year increase of 4.6%.
In terms of chrome ore exporter to China, South Africa possesses the largest amount of chrome ore reserves and production in the world, and is also the largest exporter of chrome ore. In 2022, more than 80% of China's chrome ore sand and concentrates were imported from South Africa, followed by Turkey's 951,200 mt and Zimbabwe's 461,700 mt. The top three accounted for more than 90% of the overall imports in China.
As the world's largest producers of chrome ore, Eurasian Resources Group (ERG), Tubatse Chrome Minerals Pty Ltd (Tubatse) possess a combined capacity of nearly 15 million mt, accounting for 35% of the global total. At present, Chinese-funded enterprises Sinosteel and Minmetals invested in chrome ore in Africa, but their overall capacity was relatively small. Sinosteel is the first enterprise in China to invest in chrome ore, and currently owns nearly 260 million mt of chrome ore in Africa, While Minmetals possesses 236 million mt of chrome ore in South Africa.
Stainless steel and chemical chromium salt sectors will be the key driver for growth in chrome ore consumption, most notably the former. Serving as a basic new material necessary for modern society, stainless steel market kept witnessing a rapid growth in demand for many years. Furthermore, a consistent rise in the demand will be reported, feeling impact of upgrading of consumption and manufacturing industry, thereby fuelling demand for chrome ore. Meanwhile, with structural adjustment of steel industry, a focus will be put on the elimination of overcapacity in steel industry. Therefore, demand for imported chrome ore will hit its peak around 2030, and subsequently dwindle lower.
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