Samancor Establishes New Charge Chrome Pricing Standard for 3rd Quarter

Samchrome FZE, the Dubai-based distributor for South African ferro-chrome producer Samancor, announced on Sunday its decision to introduce an independent reference price for charge chrome shipments to Europe in the third quarter of 2024. This decision follows the recent discontinuation of the longstanding European Benchmark Ferrochome Price (EUBM).

Setting the price at $1.52 per pound, Samchrome FZE aims to fill the void left by the EUBM, which historically set the industry standard for South African charge chrome containing a minimum of 52% chrome, crucial for global benchmarks in the stainless steel sector.

Previously negotiated by South African producer Merafe Resources in collaboration with Glencore, the discontinuation of the EUBM prompted rapid adjustments across European, North American, and Asian markets. Many stakeholders agreed to extend the final Glencore-Merafe benchmark of $1.52/lb into the third quarter, aligning with Samancor's newly established pricing framework.

While Samancor previously played a role in negotiating the EUBM, recent developments indicate a shift in strategy, with the company now asserting its own pricing model. Discussions have also surfaced regarding the adoption of alternative pricing mechanisms leveraging indexes from reputable price reporting agencies, highlighting broader industry trends toward diversification and transparency.

As market participants navigate these changes, varying perspectives emerge on the viability of direct EUBM replacements, given concerns over regulatory scrutiny and the evolving dynamics of ferro-chrome spot pricing.