Ferro-chrome production at Xstrata Alloys fell 20% year-on-year
in the first quarter, as a result of maintenance rescheduling
and power buyback deals with South Africa's state power group
Total ferro-chrome production in the first quarter of 2012
reached 252,000 tonnes, compared with 316,000 tonnes for the same
period in 2011
Eskom has called on major producers to shut
furnaces and sell power back to the national grid
to tighter ferro-chrome supply in Europe, even as the Chinese
market remains subdued.
The supply reduction helped producers achieve a 17% rise in the
benchmark price for high carbon ferro-chrome and charge chrome,
but cost pressures are still a challenge, Xstrata said.
"Margins, however, remain under pressure as a result of
continued strong mining inflation, increased standing charges
and a relatively strong rand compared with the US dollar," the
High carbon ferro-chrome
is trading at
$1.16-1.22 per lb on a delivered basis in Europe, compared with
$1.05-1.15 at the start of the year.