Zimbabwe’s big ferrochrome firms fear the coronavirus will affect their major source markets in China and Italy.
The Zimbabwe ferrochrome industry is mainly controlled by Kwekwe-based Zimasco, ZimAlloys, Afrochine, and Portnex International-leasing Zimasco furnaces.
The sector has been grappling with subdued demand due to the incessant trade wars between the United States of America and China.
Minerals and Marketing Corporation of Zimbabwe general manager Tongai Muzenda said January and February 2020 sales were not affected by the pandemic although he feared the worst in the coming months.
“The impact of COVID-19 has been a major concern for ferrochrome exports. But we are happy that the pandemic has not affected our January and February 2020 sales.
But going forward we foresee a disaster and the impact looks massive,” Muzenda said.
An industry player who requested anonymity told this publication that their operations were in deep trouble as exporting of the product has also been put under restrictions.
“Most companies, if the COVID-19 issue persists, may fold in the ferrochrome industry.
Sales are likely going to be affected as major source markets like Italy and China are facing challenges,” said the industry source.
The last quarter of 2019 saw the chrome industry being plunged into a crisis following a crash in chromes prices in China which saw the majority of chrome miners and exporters mainly of Chines origin halting operations and withholding the product.
The Chinese market since the beginning of November 2019 has been experiencing a decline in chrome prices of about 4000 Yuan, a situation which saw most miners in Zimbabwe holding on their product as exporting at the current price remains less viable.
At the moment chrome ore is selling in China at around US$70 per tonne depending on the grades while ferrochrome is selling at US0.80 per pound.
Depressed global markets in the half-year of 2019 also saw Zimbabwe yielding a decline in chrome concentrate sales recording about US$30.8m which was a significant drop from $47 million recorded by the end of 2018.
According to figures from MMCZ, this means the country exported chrome concentrates amounting to 208,809.74 tonnes during the period-a decline from 306,514.54 in 2018.
Lumpy chrome for the period under review yielded US$4.9m (62,227.53 tonnes) which was a decline from about US$11m (108,801.57 tonnes) in 2018.
The decline in chrome sales was also exacerbated by the ongoing trade war between the world’s two biggest economies, China and United States of America.
As the trade war between the world’s two economic superpowers, United States and China rumbles on, Zimbabwe is one of the collateral damages in the dispute.
China is the world’s top consumer of chromium, as well as the top stainless steel producer while Zimbabwe is the second largest ferrochrome and chromite ore producer supplying 60 percent of its product to the Asian giant for the manufacturing of stainless steel.
The raging fight between the US and China and the current COVID-19 pandemic means China and Italy’s demand for ferrochrome from Africa mainly Zimbabwe has been subsiding.
Zimbabwe is one of the two five producers of chrome in the world and due to sanctions, China has been the Southern African nation’s biggest market while Italy also takes a huge chunk of Zimbabwe’s chrome.