On April 25, International Ferro Metals (IFL), South African producer of ferrochrome, released its production results for the three months up to March 31, 2012.
Accordingly, International Ferro Metals produced 48,762 mt of ferrochrome during the quarter in question, falling 5.2 percent compared to the corresponding quarter of 2011 and down 9.9 percent compared to the previous quarter. Ferrochrome sales volumes were down 9.4 percent from the previous quarter and up 9.3 percent from the corresponding period of last year, amounting to 52,930 mt for the three months in question.
According to International Ferro Metals' statement, a disconnect in ferrochrome prices developed between China and the West during the first quarter of 2012. This can mainly be attributed to a reduction in the availability of spot material outside China as a result of production cuts in South Africa, which also supported the second quarter increase in the European benchmark price from US$1.15/lb to US$1.35/lb. On the other hand, the ferrochrome market in China, which is dominated by domestic supply, softened and placed a dampener on chrome ore prices in that country.
IFL added that the industry stocks of ferrochrome are expected to decline further during the second quarter and to remain relatively low throughout the balance of the 2012 calendar year, supporting steadier prices.