Ferrochromium Supply in the Market Economies

摘要

The main purpose of this paper is to examine the competitiveness of the different ferrochromium producers and present a general overview of the different types of costs they face. Use is made of the "equality" of the average variable costs and marginal costs in capital-intensive industries such as mining. This allows the construction of an industry supply curve where different producers are ranked and their competitiveness assessed. On the strengths of our supply curves, the most competitive producers are in South Africa and Zimbabwe, followed by Finland and the rest of the Scandinavia. Producers from these countries face low chrome ore or electricity costs or both. Hence, significantly low costs of either or both is an important source of competitiveness in the industry. The competitive strength of Southern Africa is illustrated by the setting up of joint ventures in this region by their erstwhile Japanese competitors.