42 panding the miniscule Brazilian ferrochrome industry are largely embryonic." The single largest chromite mining project in Brazil -designed to raise that country's production to 100,000 tons per year by the end of the decade," has been stalled due to economic problems. Even if the established goal should be reached, however, the quantity and quality of the ore mined would be insufficient to meet the minimum ferrochrome requirements of its financial backers: The Japanese ferroalloy industry and the Japanese government. Assuming the financial problems are solved and every production goal is attained, Japan has been guaranteed half the output with options on the remainder. 43 Turkey is in a similar position to Brazil. Possessing only 2 percent of the world's metallurgical grade chromite reserves, Turkish producers have recently signed a long-term contract with the Japanese government to supply a majority of Turkish production to Japanese ferroalloy producers." The question of whether the American government should have made similar arrangements with foreign suppliers is moot. The American steel industry has already been foreclosed from the majority of alternative ferrochrome sources. 3. Despite the booming market for ferrochrome and record consumption levels, ferrochrome imports have become increasingly concentrated. Imports of ferrochrome from countries lacking indigenous supplies of chromite ore are rapidly declining. West Germany, for example, is 80 percent below 1971 levels, while 40 See Minerals Yearbook, 1971 ed. 41 Id. 42 See American Metal Market, October 10, 1973. 45 43 The Japanese Ministry of International Trade and Industry recently announced: "from around 1975, Japan will have to fill 20 to 30 percent of its demand for ferroalloys with imports. In 1977, therefore, Japan will have to import nearly 1 million tons of ferroalloys" Id. Sweden, Norway and France have fallen both in the percentage of ferrochrome they supply to the American market, and the actual tons shipped to the United States." Japan, currently one of the major exporters of ferrochrome to the United States, is experiencing a critical shortage in its domestic market." Faced with increasing demand and declining domestic production, Japan will become a net importer of ferrochrome this year." By 1975, up to 30 percent of Japan's ferrochrome requirements will be imported. 49 Japan's inability to supply even its domestic needs illustrates the decline of ferroalloy industries in countries lacking chromite ore. This decline reflects the growing reluctance of Rhodesia and South Africa to sell raw material on the world market at the expense of their domestic industry. During the sanctions period, it was possible for American specialty steelmakers to purchase ferrochrome from domestic or foreign suppliers-albeit at an inflated price. With the burgeoning development of Rhodesian and South African ferrochrome industries—both utilizing Rhodesian ore-chromite ore will inevitably become less available to third countries as well as the United States. American specialty steelmakers will thus be effectively "frozen out" of a supply for this critical material. 46 Id. 17 See Japan Metal Bulletin July 19, 1973. 48 See note 44 supra. Low High Low High Low High Low High Low High 1972 1973 1974 Low High Low High France 417 336 Australia 1,625 19 1,714 36 348 21 773 2,927 3,728 5,772 3,612 Italy 716 716 716 2,163 1,519 Japan 1,025 1,411 314 1,196 445 1,674 210 236 4,882 7,363 9,598 2,267 7,577 296 4,575 996 Mozambique 380 298 1,777 587 Sweden 5,410 4,846 680 2,866 2,192 4,036 151 7,125 796 4,541 782 2,623 2,471 Turkey 2,662 2,351 3,456 750 4,703 1,179 1,565 United Kingdom 1 26,058 10,848 18,853 7,592 26,973 26,965 46,249 44,017 30,826 69,529 30,737 71,318 1 Less than 1/2 unit. SOURCE: Minerals Yearbook and FT 246 Imports: TSUSA Commodity by Country 1972, Mineral Industry Surveys, CONSUMPTION A restricted supply of ferrochrome would cause serious problems not only to the American specialty steel industry, but to the entire country. As mentioned previously, chromium is a critical material, essential to a wide variety of defense and civil applications. Industry projections indicate stainless steel shipments will increase to about 1.5 million tons by 1975, reaching 2.3 million by 1980.50 Between now and the end of this decade, the specialty steel industry will need at least 750 thousand tons of ferrochrome— assuming no changes are made in the current ecological demands.51 Recently announced EPA standards radically alter these projections. As it now stands, automobile emission control employs 10 pounds of stainless steel per year for this application alone.52 Reaching even minimum levels of specialty steel production may be difficult, however, if ferrochrome availability is artificially restricted. Even if the Rhodesian sanctions are not reimposed, United States steelmakers must compete with other countries for ferrochrome. Third country demands for chromium over the next 25 years are anticipated to exceed those of the United States by 335 percent, reaching 84.1 million tons by the year 2000.53 The effect of the supply-demand squeeze is already being felt in this country and elsewhere. Japan, which produces nearly twice the ferrochrome as the United States," was 50,000 tons short for domestic requirements last year.55 Prices for high carbon fer 50 American Metal Market, May 23, 1973. 51 Id. 52 Id. NMAB Report. 53 Id. Bureau of Mines Bull. 54 The Japan Metal Bulletin of June 9, 1973, reports that in this fiscal year, 306,000 tons of high-carbon ferrochrome would be produced. 55 The Japan Metal Bulletin, July 19, 1973. |