South African HC FeCr production bounced back in volume terms in 2014. But the country’s producers are still under pressure from Chinese competitors when it comes to production costs. South African producers’ average weighted delivered costs are this year estimated to be around 5₵/lb less than those of Chinese producers, a smaller gap than in 2013.

Executive summary 1

Chapter 1

Cost Rankings 7

Appendix A

Ferrochrome cost model concept definitions 36

1. Introduction 36

      1.1 Chrome Ore 37

      1.2 Electricity 37

      1.3 Labour 37

      1.4 Reductants 37

      1.5 Other including slag recovery 37

      1.6 Delivery 38

Appendix B

Macroeconomic cost drivers, 2014-2023 39

1. Executive summary 39

      1.1 Overview of macroeconomic cost drivers 39

      1.2 Forecast risks 40

2. Exchange rates and Labour 41

      2.1 Exchange rates 41

      2.1.1 Short to mid-term outlook 41

      2.1.2 Fundamentals and longer-term outlook 43

      2.2 Labour costs 43

      2.2.1 Short to mid-term outlook 43

      2.2.2 Fundamentals and longer-term outlook 44

3. Fuel, energy and power costs 46

      3.1 Oil 46

      3.1.1 Short to mid-term outlook 46

      3.1.2 Fundamentals and longer-term outlook 47

      3.2 Natural gas 48

      3.2.1 Short to mid-term outlook 48

      3.2.2 Fundamentals and longer-term outlook 49

      3.3 Steam coal 49

      3.3.1 Short to mid-term outlook 49

      3.3.2 Fundamentals and longer-term outlook 52

      3.4 Carbon Dioxide (CO2) 52

      3.4.1 Short to mid-term outlook 52

      3.4.2 Fundamentals and longer-term outlook 53

      3.5 Electrical power 53

      3.5.1 Short to mid-term outlook 53

      3.5.2 Fundamentals and longer-term outlook 57

4. Sea freight costs 58

      4.1 Dry bulk freight developments 58

      4.1.1 Short to mid-term outlook 58

      4.1.2 Fundamentals and longer-term outlook 58

      4.2 Container freight developments 59

      4.2.1 Short to mid-term outlook 59

      4.2.2 Fundamentals and longer-term outlook 59

5. Capital costs 60

      5.1 Project costs 60

      5.1.1 Short to mid-term outlook 60

      5.1.2 Fundamentals and longer-term outlook 61

      5.2 Financing costs 61

      5.2.1 Short to mid-term outlook 61

      5.2.2 Fundamentals and longer-term outlook 61

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