Russia's largest chrome producer expects output of the metal, used in kitchen goods and the aerospace sector, to recover from the summer after a drop in demand led to an abrupt halt to production last year.
RosSpetsSplav is now running its Klyuchevsky Ferro-Alloy Plant at 40-50 percent of monthly its capacity of 600 tonnes and expects production this year to almost match 2008 levels, the company's president, Vyacheslav Grigoryev, told reporters.
"From March and April, we see real demand from end-users," Grigoryev said in comments approved for publication on Monday.
Privately owned RosSpetsSplav, or Russian Special Alloys, slashed output in response to the economic downturn, which cut demand and prices for chrome . The metal is also used in bathroom goods, dental and other medical applications.
Klyuchevsky Ferro-Alloy Plant, in the Sverdlovsk region in the Urals mountains, halted production for a week in November and for 10 days in December. Output last year fell to 6,460 tonnes from 9,004 tonnes in 2007.
Grigoryev said the Klyuchevsky plant produced 200 tonnes of chrome metal in March, up from 38 tonnes in the whole of the fourth quarter of 2008.
"This year we will produce a little less than last year," Grigoryev said. "But we see no ill in that, as we expect a slow but gradual rise in output from the summer."
Klyuchevsky produces more than 30 ferro-alloys used to toughen steel and is the only plant in Russia able to produce ferro-niobium, an alloy used to make high-quality pipes.
The company has a unit in the Democratic Republic of Congo, Congo Russia Industry, which participates in a project to mine niobium there. Until recently, this project was mothballed.
"As the political situation (in Congo) has returned to normal, we have started producing niobium concentrate," Grigoryev said.
"The first concentrate sales will start in the next few weeks. It is an investment project that will start to pay back," he said, adding that a deal was planned to sell concentrate to a British company, which he would not identify.
Grigoryev said the financial crisis had also benefited the Klyuchevsky plant, as the price of raw materials had fallen much more than the price of chrome metal.
The company buys chromite ore mainly from Turkey's Cihan Mining and Metal Co.
"Currently offered volumes are very significant, which allows us to agree terms with new suppliers," Grigoryev said.
"We have proposals to buy ore in Albania, South Africa and China. We are also buying raw materials from Kazakhstan and from the local Uralkhrom company," he said
Source: Forexpros.com
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