High-carbon ferro-chrome prices increased on January 8 following an active start to the year, led by strong Chinese buying and anticipation of higher prices in the second quarter.

    Chinese stainless steel mills are stocking up on raw materials ahead of the Chinese new year holiday, which begins on January 29, sources said.

    Not only will the Chinese mills be out of the market for the duration of the holiday, but South Africa’s state-owned power provider Eskom will raise its prices in April and this will be reflected in higher charge chrome prices from South Africa’s producers.

    “It all stems from China – there is no recovery in Europe or the US that we can see,” one South African producer said. “China is stocking up ahead of the new year, and when they come back it will be just one month before the power cost increase in South Africa.”

    Eskom has applied for an electricity price increase of 35% per year for the three year period starting April 1 2010.