Ferrochrome prices might rise as much as 50 percent next year from a current record level, Samancor Chrome said on Friday.

Low stocks, the absence of new production capacity, rising demand from China and surging costs in top producer South Africa would push prices higher, said the world's second-biggest producer of the stainless steel raw material.

Prices for quarterly contracts might climb as high as $1.50 (R10) a pound from $1. "Producers' stocks, especially in South Africa, are critically low; conditions will tighten further and accelerate," said Samancor. "Ferrochrome prices will continue to rise as consumption in China is expanding at a fast rate."

Demand for ferrochrome climbed this year as stainless steel makers substituted the metal for nickel, which doubled to a record $51 800 a ton in the 12 months to May.

Ferrochrome contract prices are being negotiated between producers of the metal and steel makers. The contract price of so-called charge chrome has risen 22 percent this year.

The price of the same metal for immediate delivery has doubled to $1.45 a pound, according to Metal Bulletin.

The "gap between spot and contract prices is widening and is unreasonably high", said Samancor.