12th Rare Earth Summit

May 27-28, 2021
Hangzhou, Zhejiang, China

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May 20-21, 2021
Hangzhou, Zhejiang, China

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April 15-16, 2021
Hangzhou, Zhejiang, China

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March 25-26, 2021
Hangzhou, Zhejiang, China

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June 13-14, 2019
Changsha, Hunan, China

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May 23-24, 2019
Qingdao, Shandong, China

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Zhengzhou, Henan, China

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May 9-10, 2019
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April 11-12, 2019
Zhuhai, Guangdong, China

12th World InBiGeGa Forum

March 14-15, 2019
Zhuhai, Guangdong, China

6th World Manganese & Selenium Forum

May 21-22, 2018
Hainan Sanya, China

Interview with Evren Akal, Sales Manager of Kromaş Madencilik San. ve Tic. A.Ş.

KROMAS Mining Industry and Trade Co., a subsidiary of LEVI Group founded in 1880, has been established in Istanbul with the purpose of investing in mines and minerals within Turkey.
KROMAS Co., is active mainly in chrome ore, manganese ore and iron ore mining and exports from Turkey through its offices in Russia, China and Hong Kong.
Evren Akal: The need of a stable princing trend of chrome ore
----Interview with Evren Akal, Sales Manager of Kromaş Madencilik San. ve Tic. A.Ş.

Asian Metal: Evren, thank you for accepting the interview. Would you please start with an outline of your business and your market position?

Evren: Kromaş Madencilik San. ve Tic. A.Ş. is a company under LEVI Group. We have several production sites for lumpy and concentrate Chrome Ore. Our export capacity, as LEVI Group, is over 5,000 ton per month.

Asian Metal: Please give us a brief introduction on what has happened in the past two weeks in the chrome market.

Evren: After the Chinese holiday the customers started asking some USD20-30/t reduction in prices, which caused serious reactions among the Turkish chrome industry. Producers started to question their decision about their ongoing investments and those who were preparing to start the new season in March, now wants to delay their operations.

Asian Metal: Do you feel that the recent price depreciation was justified?

Evren : No. There is no cost relieve, no excessive profit, no shrinking in the ferrochrome or the stainless markets.

Asian Metal: How do the volatile prices affect the Turkish chrome industry?

Evren: The producers who can diversify their markets can survive. But those dependent on the Chinese market only are suffering a great deal. They are seeing no sales security, no price stability, therefore cannot make clear plans for investment, renovation, exploration.
Therefore, we are doing our best to diversify our portfolio and an increasing number of markets are being added to our export portfolio every month. Russia, Japan, South Korea, India, Ukraine are more active in the Turkish Chrome market than before.

Asian Metal: Can you please elaborate how does the severe price volatility affect, in particular, the small and medium-sized producers like yourself?

Evren: High volatility means less and more difficult planning for producers and higher profit for traders. So it is a lose-lose situation for both chrome ore and ferrochrome producers, but a win for some traders.
We cannot benefit from economies of scale and cannot use optimum production processes due to uncertainty of the market therefore we are shy to buy the necessary equipments.

Asian Metal: Following those statements by large Turkish producers, are you planning to reduce supply to China?

Evren: Nothing to do with the big producers but we simply cannot accept a price reduction of that scale. Under the current cost structure, prices for the concentrate material at the USD300-320/t CIF level would be the right price for both sides. We make an 8-10% profit margin which will allow us to remain competitive and produce our products in optimum way and quality.

Asian Metal: However, as a mid-sized producer, is it financially viable to halt sales or you would expect more small and mid-sized suppliers being driven out of business?

Evren: Usually what happens is that small and mid-sized producers do not totally halt production, of course there are some who does completely stop, but generally we become obliged to make regular sales to Turkish traders and give them an USD10-15/t profit margin which is sometimes even more than what we are making!

Asian Metal: Would the recent development in the Chinese market force you to speed up your process of exploring different markets, like Japan, South Korea, Russia and India?

Evren: Of Course! As I mentioned before, we are constantly trying to expand our export portfolio and to become less dependent on the Chinese unstable demand and prices.
This is not a choice but an obligation.

Asian Metal: What would you suggest the Turkish and Chinese chrome industry to perform to rebuild a better business environment for mutual benefit?

Evren: I would suggest a benchmark price tied to the ferrochrome benchmark.
This will also allow miners to keep their finances properly as they will know their income more clearly, and can therefore invest accordingly.
Under current cost structure the prices at USD300-320/t are not at all exciting prices for producers to increase their investments or for new players to enter the industry but on the other hand it’s a good level to sustain and optimise our productions.
But I doubt that big traders, making money out of the non-transparent price trend will accept such benchmark, although it is in the favour of both chrome ore and ferrochrome producers.

Asian Metal: Would you like to add anything?

Evren: Last couple of quarters we see that no chrome producer want huge price jumps anyway.
We all see that supply is enough and do not want to disturb the balance by attracting new comers to the industry.
So we don’t intend excessive profits.
Just enough profit for stability and sustainability of the market health is enough.