Merafe Resources Limited (MRL), a leading producer of ferrochrome through its joint venture with Glencore in South Africa, reported a substantial decrease in ferrochrome production in the second quarter and first half of 2024.
The company's attributable ferrochrome production from the Glencore Merafe Chrome Venture fell 23% quarter-on-quarter to 67,000 tonnes in Q2 2024, down from 87,000 tonnes in Q1. On a year-over-year basis, Q2 production declined 18.3% from 82,000 tonnes in Q2 2023.
For the first half of 2024, MRL's ferrochrome production decreased 15.8% compared to the same period in 2023, totaling 154,000 tonnes.
"This reduction in production is attributed to a planned production pullback in response to market conditions," the company stated. Only the lower-energy Lion smelter operated during the high electricity demand winter season, a period of elevated power prices.
The European benchmark ferrochrome price for the second quarter of 2024 was announced at $1.52 per lb Cr, up 5.56% against the previous quarter. However, the average European ferrochrome benchmark price was $1.562/lb in 2023, which represents a decrease of 14.5% from 2022.
The news comes as the European quarterly ferrochrome benchmark is set to be discontinued from June 2024, as it has become "less relevant" for market participants. Merafe cited the growing influence of China on ferrochrome pricing, the gap between benchmark and spot prices, and the complicated system of negotiating discounts against the benchmark as factors leading to the decision.
