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PrintGlobal output of ferrochrome in the first three months of the year was hit by agreed production cuts in South Africa where producers agreed to electricity ‘buy-backs’ with state-owned utility Eskom.
But Merafe, a joint-venture operation with Xstrata, managed to record higher output due to operational efficiencies. Its Jan-March production was 67,000 tonnes, up from 65,000 tonnes in the same year-ago period.
“Production volumes increased as a result of improved overall performances of the Venture’s furnaces. The Rustenburg furnaces exceeded expectations in terms of production volumes and efficiencies as a result of the successful commissioning and ramp up of the Tswelopele pelletising plant,” Merafe said.
International Ferro Metals (IFM) reported that its first-quarter output fell to 34,172 tonnes from 48,762 tonnes during the first three months of last year.
The spot market remains tight while ” South African producers deliver on long-term contracts at the expense of the spot market, given the lower production and higher cost dynamic”, IFM chief executive Chris Jordaan said.
Both IFM and Merafe have shut furnaces for periods in 2012 and 2013, selling electricity back to Eskom, which has helped maintain a healthy balance between supply and demand as well as underpin prices. The second-quarter reference price has risen 13 percent to 127 cents per pound from first-quarter levels, although it remains below the 135 cents reached for the second quarter of 2012.
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