Hernic Ferrochrome Ltd., which shut the last of its four furnaces in January, restarted some production to swell inventories on indications of revived demand from Asian customers.
“We have started some limited production to replenish our stocks,” Jasper Pieters, operations director at the Brits, South Africa-based company, said today in an e-mailed response to questions. “We don’t know for how long we will be producing. This depends on volume and price.”
The market for ferrochrome, used to prevent corrosion in stainless steel, is “fundamentally challenged” by idled output capacity and Chinese ore stockpiles, Macquarie Group Ltd. said today in a report. Contract prices for the metal will average 74 cents a pound this year, down 58 percent from 2008, as stainless-steel production shrinks 15 percent, Macquarie said.
“We do see some positive signs out of Korea, Taiwan and China, but do not know how sustainable this is,” Pieters said.
Hernic, part of Mitsubishi Corp., can produce about 380,000 metric tons of ferrochrome a year and has 550 full-time employees and 2,000 contract workers. South Africa is the world’s biggest ferrochrome producer.
Source: Bloomberg
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