Merafe Resources’ ferrochrome output down 21 percent in H1

South Africa's largest ferrochrome producer Merafe Resources has announced its production report and interim results for the six months ended June 30, 2012, reporting a profit and total comprehensive income of ZAR 138 million ($16.9 million), increasing 57 percent year on year. Merafe's income is generated from the Xstrata-Merafe Chrome Venture, the market leader in ferrochrome, with a total managed capacity of 1.98 million mt of ferrochrome production per annum.
 
According to the company statement, ferrochrome production volumes in the first half of 2012 were 21 percent lower than the corresponding period of 2011, as Eskom, the South African national electricity supplier, asked Merafe to cut production at some furnaces.
 
Merafe said in its announcement that global consumption of ferrochrome reached 5 million mt in the first half of 2012, driven by strong stainless steel production. Global ferrochrome production was 4.8 million mt in the first half of 2012 which was two percent higher than the same period of 2011. China remains the determining factor in the industry producing more than 40 percent of the world's stainless steel and accounting for 33 percent of the world's total ferrochrome production in the first half of 2012. The continuous growth in Chinese ferrochrome production now positions China as the largest producer in the world, ahead of South Africa which produced 32 percent.
 
According to Merafe, South African ferrochrome exports to China continue to be displaced by domestic Chinese ferrochrome production on the back of unbeneficiated chrome ore exports from South Africa. It is estimated that 2.1 million mt of chrome ore was exported from South Africa to China in the first six months of 2012, according to Chinese customs data.