Charlotte Mathews
9 July 2009
Johannesburg — STRENGTHENING demand for ferrochrome is encouraging SA's major ferrochrome producers to bring mothballed capacity back on line, they said yesterday.
Last month the third-quarter benchmark ferrochrome price was settled 29% above the second-quarter price at $0,89/lb -- still well below the $1,21/lb achieved last year.
Ferrochrome gives hardness to stainless steel, and SA is the single biggest producer of the alloy.
A slowdown in stainless steel production late last year and earlier this year caused the sharp fall in prices. In response, local producers mothballed up to 80% of their production capacity for several months.
The Xstrata-Merafe Chrome Venture had increased ferrochrome capacity to 60% by recommissioning several furnaces, Merafe Resources said in a statement to the stock exchange. It said demand was being monitored continuously and capacity would be adjusted in line with demand.
Danko Konchar, chairman of SA's second-biggest ferrochrome producer, Samancor Chrome, confirmed that the group had also restored production to similar levels reported by Merafe. Hernic Ferrochrome CEO Tetsu Kotaki was not available for comment.
Reuters reported that International Ferro Metals CE David Kovarsky said it was also considering returning its second furnace to operation, which would bring the company up to 90% capacity. A decision would probably be made within two weeks, he said.
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