HONG KONG Ferrochrome suppliers and stainless steel producer Aperam SA have set the second-quarter European benchmark price in the first round of talks since usual negotiator Inoxum Group was acquired by Finnish producer Outokumpu Oyj.
The benchmark ferrochrome price is negotiated every quarter through discussions between Xstrata Plcalong with marketing partner Glencore International Plcand a leading European stainless steel mill.
Traditionally, the benchmark was settled with Germany-based ThyssenKrupp AGs former stainless unit, Inoxum, which was bought by stainless group and ferrochrome producer Outokumpu last year.
Market participants had long warned that Inoxum would not be an acceptable negotiator after it became part of Outokumpu because it would be both a producer and a consumer of ferrochrome.
Luxembourg-based Aperam was expected to step in because it did the same in the second quarter of 2012, when ThyssenKrupp was in negotiations with Outokumpu. Its involvement then indicated that Aperam would be more active in future benchmark discussions, although ThyssenKrupp returned to its usual role in each of the next three quarters.
The second-quarter benchmark increased 14.5 cents to $1.27 per pound due to tighter South African supply as Eskom Holdings SOC Ltd., the countrys state energy group, struck power buyback deals with all major producers there.
Aperam declined to comment.
A version of this article was first published by AMM sister publication Metal Bulletin.