CHROMIUM FUTURES

Chromium is a steel-gray, hard, and brittle, metallic element that can take on a high polish. Its symbol is Cr and atomic number is 24. Chromium and its compounds are toxic. Discovered in 1797 by Louis Vauquelin, chromium is named after the Greek word for color, khroma. Vauquelin also discovered that an emerald’s green color is due to the presence of chromium, and many precious stones owe their color to the presence of chromium compounds.

Chromium is primarily found in chromite ore. The primary use of chromium is to form alloys with iron, nickel, or cobalt. Chromium improves hardness and resistance to corrosion and oxidation in iron, steel, and nonferrous alloys. It is a critical alloying ingredient in the production of stainless steel, making up 10% or more of the final composition. More than half of chromium production is used in metallic products, and about one-third is used in refractories. Chromium is also used as a lustrous decorative plating agent, in pigments, leather processing, plating of metals, and catalysts.

Supply – World production of chromium in 2002 rose +7.4% to 13.000 million metric tons from the 6-year low of 12.100 million metric tons in 2001. The world’s largest producers of chromium are South Africa with about 45% of world production, Kazakhstan with 17%, India with 14%, and Zimbabwe with 6%. India has emerged as a major producer of chromium in the past two decades. India’s 2002 production level of 1.900 million metric tons was 5 times the level of 360,000 metric tons seen 20 years earlier. South Africa’s production in the late-1990s roughly doubled from the levels seen in the 1980s, but has flattened out in the past 8 years to an average year 6 metric tons per year. Kazakhstan’s production in 2002 of 2.300 million was slightly above its 10-year average production level of 2.14 million metric tons. Zimbabwe’s production in 2002 posted a new 25-year high of 780,000 metric tons.

Demand – Based on the most recently available data, the metallurgical and chemical industry accounts for 94% of chromium usage in the US, with the remaining 6% used by the refractory industry.

Trade – The US relied on imports for a record low 63% of its chromium consumption in 2002, down from 78% in 2000 and 2001 and 80% in 1998 and 1999. US chromium imports in 2002 fell to a record low 174,000 metric tons from 239,000 in 2001, and was less than half of the 453,000 metric ton import level in 2000. US exports of chromium are negligible and fell to 10,000 metric tons in 2002 from 38,000 in 2001.