We all know that ferrochrome is widely used in steel making and that the ferroalloy market is variable. Not only ferrochrome, but basically all popular ferroalloy prices change daily, but we will only discuss ferrochrome today. We are going to talk about the price of ferrochrome from two aspects. First, we will talk about the cost of ferrochrome, that is to say, we need to spend money in those parts to produce one ton of ferrochrome. Secondly, we will talk about the calculation method of ferrochrome, because many buyers don’t buy according to the ton price, the price will be higher if they buy according to the ton price, but the calculation is very convenient, we will mention here the calculation method of most of the sellers’ offer in the market.
The cost composition of ferrochrome
The cost of ferrochrome mainly consists of chrome ore, chrome ore freight, ore consumption, electricity price, electricity consumption, other expenses, and finally VAT. These are the main items, of which the price of chrome ore has a very big impact, and the price of electricity also has a very big impact. Because chrome ore is very expensive, almost 40%-50% of the total cost. So the rise and fall of chrome ore actually affects the price of ferrochrome very much, from the mathematical level, chrome ore price increases by 10%, in the case of other costs remaining unchanged the price of ferrochrome will rise at least 4-5%, the same decline is also the same reason. There is another influencing factor is the price of electricity, the price of electricity is high, the cost of production is high, the price of electricity is low, and the cost of production is low. Because the production of a ton of ferrochrome electricity consumption is certain.
To sum up, the cost of ferrochrome is mainly affected by two aspects, the price of chrome ore and electricity.
Calculation method of ferrochrome price
The calculation method of ferrochrome is very special, generally using a way of increasing the price of chromium. For example, if the chromium is divided into one hundred parts, there will be 50 base price and 60 base prices, etc. The 50 base price means that the chromium content in this ferrochrome will not be less than 50%, and the 60 base price means that the chromium content will not be less than 60%. But in the actual shipping process, generally, there will not be a whole number, for example, 64 ferrosilicons, then the price will be calculated according to the actual content of chromium without considering other elements such as carbon.
Let’s work backward and assume our 60 base price ferrochrome is $3,100, then we calculate the formula for pounds per chromium as follows.
3100/2204/0.6 = 2.34lb/cr.
Then we actually calculate the formula for the ton price of 64 ferrochrome as follows
That means for every one percent higher chromium content, the price will be added accordingly to the standard of the base price.
I think you have understood what the key points are about the price of ferrochrome, which is basically the cost of ferrochrome and how it is calculated. The cost of ferrochrome affects the market of ferrochrome and reflects the heat of the market. The calculation method of ferrochrome is about the details of buying and selling ferrochrome. I hope you can learn basic knowledge about ferrochrome from it, and also facilitate a deeper grasp of the market.