SOVIET SALES OF CHROMITE TO THE FREE WORLD CONTINUE TO INCREASE

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Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79T01003A001600240001-7
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RIPPUB
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C
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13
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November 16, 2016
Document Release Date: 
April 27, 2000
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1
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Publication Date: 
June 17, 1963
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BRIEF
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Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 CONFIDENTIAL Current Support Brief SOVIET SALES OF CHROMITE TO THE FREE WORLD CONTINUE TO INCREASE CIA/RR CB 63-53 17 June 1963 CENTRAL INTELLIGENCE AGENCY Office of Research and Reports CONFIDENTIAL downgrading and declassification Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 This material contains information affecting the National Defense of the United States within the meaning of the espionage laws, Title :18, USC, Sees. 793 and 794, the trans- mission or revelation of which in any manner to an unauthorized person is prohibited by law. Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 C -O-N-F -I-D-E -N-T -I-A-L SOVIET SALES OF CHROMITE TO THE FREE WORLD CONTINUE TO INCREASE The USSR, the world's leading producer of chromite, is becoming an increasingly important source of supply for consumers of this industrial raw material in the Free World. From an average of 146, 000 metric tons (mt) a year in 1955-58, Soviet sz .llls of chrome ore in Free World markets climbed to more than 300, 000 mt per year in 1961 -62 and may increase further in 1963-65 in view of quantities specified in known trade agreements and purchase contracts covering this period, The Soviet chromite being sold to the Free World is metallurgical-grade ore that is used in producing ferrochrome alloys or chromium metal. Other grades of chrome ores are used as raw materials in refractories and in chemical industries. The growing volume of Soviet exports to the Free World, and particularly a recent sale of 300, 000 mt to a US importer for delivery in 1963-65, have caused considerable concern in Turkey and Rhodesia, both important producers of metallurgical-grade ores. 1. Supply Position The USSR has been the world's largest producer of chromite con- tinuously since 1958, having previously held this position in some years immediately after World War II. Soviet production, which averaged about 850, 000 mt a year during 1955-58, rose to 1. 5 million mt in 1962. Output increased from approximately 20 percent of world production in 1955-58 to 29 percent in 1960-61, as can be derived from data in Table 1. Production of metallurgical-grade ore in 1962 is estimated at 1 million mt and, if the Seven Year Plan is fulfilled, could increase to 1. 4 million mt in 1965. An increasing proportion of Soviet production is being exported. From an average of about 215,000 mt a year in 1955-58, total exports have in- creased to more than 400, 000 mt, or from about 25 percent of production to more than 30 percent. Soviet exports of chromite are shown in Table 2. C-O-N-F-I-D-E-N=T-I-A-L Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 The USSR is the principal supplier of metallurgical-grade chromite for the other countries of the Sino-Soviet Bloc. Albania, the only other important producer of chromite in the Bloc, exports significant quanti- ties to these countries, but Albanian ores are of poorer quality, con- taining an average of only 45 percent chromic oxide, and are less suitable for metallurgical use. Soviet shipments to the Bloc followed a general upward trend during 1955-60 but declined abruptly in 1961, when there were no deliveries to China. Exports to China in 1960 had amounted to 41, 000 mt. Apparently, Communist China has turned to Albania for its supplies, imports from that country having increased from about 15, 000 mt in 1960 to an estimated total of 40, 000 mt in 1961. 2. Exports to the Free World Soviet exports of chromite to countries of the Free World have in- creased by 141 percent since 1958 and in 1961 represented 70 percent of total exports. Exports to the Free World also have increased from 4 to 5 percent of production in the Free World in 1955-58 to more than 10 percent in 1961. Inasmuch as the chromite exported by the USSR is primarily of metallurgical grade, the quantities shipped to Free World markets would represent substantially larger percentages of Free World production of ores of this grade. Although Soviet ore has been purchased intermittently by consumers elsewhere in the Free World, the largest markets have been West Ger- many, Sweden, France, and Japan, as shown in Table 3. Of the aggre- gate imports of all grades of chromite by West Germany, France, and Sweden, the quantities imported from the USSR rose from about 20 per- cent in 1959 to 27 to 29 percent in 1960-61. Japanese imports of Soviet ore, which represented 5 percent of total imports in 1959, increased to 20 percent in 1960-61. In each case the Soviet share of total imports of metallurgical-grade chrome ore by these countries generally would have been significantly higher. Present trade agreements indicate that shipments to these countries will remain at a high level during 1962-65. The USSR also has trade agreements with Austria, Italy, and Norway, which in each case provide for exports exceeding the amounts shipped to these countries in recent years. Under these agreements, covering the period 1962-65, Austria is to receive 20,000 mt per year, Italy 30, 000 mt, and Norway 10, 000 mt. - 2 - C -O-N-F -I-D-E -N-T -I-A-L Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 The latest known contract for the sale of Soviet chromite in the Free World, and one involving the largest tonnage sold by the USSR in recent years, was concluded with a US importer early in 1963 and reportedly provides for the delivery of about 300, 000 mt of metallurgical-grade ore during 1963-65. 1/ This contract anticipates the largest shipments since 1947-48, when Soviet exports to the US averaged about 270, 000 mt a year -- an amount equal to nearly 50 percent of total US imports of metal- lurgical-grade ore in those years. 2/ Actual shipments in 1963-65 prob- ably will exceed 300, 000 mt inasmuch as amounts remain to be delivered during 1963 on contracts concluded in 1962. In the fourth quarter of 1962, contracts reportedly were signed for the delivery during 1962-63 of about 80, 000 mt. 3/ Actual US imports of Soviet ore in 1962. amounted to about 29, 000 mt, of which more than 22, 000 mt were received in the last quar- ter of the year. If it is assumed that shipments on the new contract are spaced evenly during 1963-65, US receipts in 1963 could approximate 150, 000 mt, or the equivalent of nearly 25 percent of annual consumption of chromite by the US metallurgical industry in 1960-62. 3. Pricing of Soviet Ores According to the limited information available, the ores being offered for export to countries of the Free World are priced a.ttracitively,_patticu- larly in view of their high quality. Soviet ore received in the US in 1962 contained 56 percent chromic oxide with a chrome to iron ratio of 3. 6 to 1 and reportedly was sold in the US market for about $34 per mt. In comparison, delivered prices of $36 to $38 per mt have been quoted in trade journals for Turkish and Rhodesian lump ores of a standard grade of 48 percent chromic oxide with a chrome to iron ratio of 3 to 1. Quoted prices for these ores, however, may not accurately reflect actual prices charged to consumers. The USSR also has offered high-grade fines in the US market at a delivered price of $15. 50 per mt, which also is below published prices for comparable ores. These fines, used in combination with lump ores in production of ferrochrome, are said to be limited some- what for use in making low-carbon ferrochrome because of a high phos- phorous content. At the low sales price, however, they represent an attractive alternative to Rhodesian metallurgical fines, which for some time have been quoted at $27 to $28 per mt. Approved For Release 2000/06/07 : CIA-RDP79TO1 003AO01 600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 C-O-N-F-I-D-E-N-T-I-A-L Table 1 Estimated World Production of Chromite 1955-62 Year Total World Free World 1955 3,725 2,820 1956 4,203 3,270 1957 4,745 3,707 1958 4,002 2,851 1959 4,239 2,851 1960 4,910 3,271 1961 4,651 3,003 1962 N.A. N.A. a/ Total J USSR Albania 905 783 122 933 800 133 1,038 870 168 1,151 950 201 1,388 1,140 248 1,639 1,350 289 1,648 1,415 233 1,788 1,525 263 a. The total does not include small quantities of chromite believed to be produced in Bulgaria, Rumania, and North Vietnam. Soviet Exports of Chromite 1955-62 Year Total Free World Bloc 1955 158 a/ 131 21 1956 219 177 42 1957 259 149 110 1958 215 127 88 1959 272 174 98 1960 427 268 157 1961 438 J 306 124 1962 N.A. N. A. N.A. a. Totals reported by the USSR include shipments for which countries of destination are not shown. 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P 1c1 ?0 ?rl +' O ?H I Id N FA cd C6 10 ?rl p (1) N mU\\,O\O N 031 mNO0 NNm~,OHH 0\ mCUr?-IN m\.O Lr\ H H 0 00 -A m -:I- N N NII m~- HHm HHHOJ N (1) U rd m F-I Q) bD ?r-I Ci Q) co C u) a) S='i CTS ?rl P, 0 0 +' U) r-I O U O~ O U) d +' rd . ?rl -N rl U) O 8 rd 81 co T cd O\ cdd FL, O co H P d Q) co 10 0 m Cd P P H- z' I~ P O Q) -P Cd 0 Cd C.) O E-i Cd N P r0 C) rd Q) LL(\ Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Analyst: 25X1A 1. Mining Journal, 1 Mar 63, p. 209. U. American Metal Market, 20 Feb 63, p. 1-2. U. 2. US Bureau of Mines. Minerals Yearbook, 1948, p. 250. U. 3. Mining Journal, 1 Mar 63, p. 209. U. 4. State, Paris. Dsp CEDTOA-901, 11 Apr 63. C. Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 CONFIDENTIAL CONFIDENTIAL Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 Analyst: R/MM Approved For Re tq,2p c 1j 19650?d240001-7 25X1A Control Staff '.'",orLt:rOl Sheet 01, FIDENT Copy No. Seriee, Number CIA/RR CB 63-53 !"lassificatior_ Date of Document 17 June 1 63 '.atmber of CoDies 160,161 158 - 223 Recd in St/P/C 17 Jun 63 158 St / P 18 Jun 63 159 162 163 164 ?_._..w. 165 166 167 168 ..~..v.._ 169 25X1A Recipient 1. L Returned '1 ! mur t Excbded from automatic ewagradJng and rFac{aasltlcaton Approved For Release 2000/06/07 : CIA-RDP79TO1003AO01600240001-7 S-E-C-R-E-T SUBJECT: Distribution of Current Support Brief No. 5t_rl 4et Sales of Chrox~i _#.c . ` , n ;'~zld-l Qnttaue_- : ar se, 11 m 1 Cop' No. Recipient 1 O/DDI m Room 7E32 Hq. 2 3 TIC 4- 11 OCI Internal ;25X1A 12 - 14 ONE I5-20 St/CS/RR 25X1A 21 O/DDI - - 22 - 30 NSA. 31 NSAL 25X1A, 32 %AA0275 ORR/St/I/D Distribution (Distributed by OCI) Group I Excluded from automatic S-E-C-R-E-T Approved For Release 2000/06/07 : CIA-RDP79TOI downgrading and UP. RL1 of Ghro to to the ree orl ontinue to crease --- use 1 onfidential Coaxtoa 32 AD/RR 33 DAD / RR 34 Ch/E 35 St/PR 36-40 D/A 0 each branch) 41-46 DIMS (1 each branch) 47-53 D/ R (1 each branch) 54-61 D/M (1 each branch) Recipient: 224 225 226 OCI/OS/RP, 2E19 Hq. DDI/CGS, 7F35 Hq. 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