Hernic Ferrochrome Ltd., the fourth-largest ferrochrome producer, restarted two furnaces to meet improving demand for the steelmaking raw material and said it’s supporting moves to raise fourth-quarter contract prices by 30 cents a pound.
Hernic, a unit of Mitsubishi Corp., has now reopened all four South African furnaces, after shutting them in December and January following a collapse in global steel demand. Ferrochrome prices, which are settled on a quarterly basis, rose to 89 cents a pound for the third quarter from 69 cents in the second, the first gain in nine months.
“We need to see meaningful increase of the price” in the fourth quarter because of the strength in the rand, Tetsu Kotaki, chief executive officer of the Brits, South Africa-based company, said today in an e-mailed response to questions. “We support” a 30-cent-a-pound gain, he added.
Hernic has the capacity to produce 380,000 metric tons a year of ferrochrome, which is used to prevent corrosion of stainless steel. It sells ferrochrome for dollars and pays costs in the local currency, which has gained 24 percent against the dollar this year.
ArcelorMittal South Africa Ltd., the biggest steelmaker in Africa, said on Aug. 5 it will operate its second-largest plant at full capacity by the end of September as orders rise.
Source: Bloomberg
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