Merafe Resources Considers Suspension of Ferro-Chrome Furnaces Amid Weak Market Conditions

Merafe Resources

Prolonged Downturn in Ferro-Chrome Prices Forces Merafe to Reassess Operations

Merafe Resources, a South African mining company, is considering the suspension of some of its ferro-chrome furnaces due to continued market challenges. The company, which partners with Glencore in a ferro-chrome joint venture, has been severely impacted by weak ferro-chrome prices and low demand.

Weak Ferro-Chrome Prices Prompt Operational Review

In response to ferro-chrome prices hitting a four-year low, Merafe Resources has initiated a review of its smelting operations. This review aims to find ways to sustain profits amid ongoing market difficulties. If no viable solutions are identified, the company may suspend some of its furnaces in May, leading to a significant reduction in its ferro-chrome production.

Impact on Ferro-Chrome Production and Market Outlook

The joint venture produced approximately 301,000 tons of ferro-chrome in 2024. However, despite potential furnace suspensions, it is unlikely that this move will immediately boost ferro-chrome prices. Demand from the stainless steel industry, which is a major consumer of ferro-chrome, remains sluggish, and market conditions continue to struggle.

Merafe's decision highlights the broader challenges faced by the ferro-chrome industry, as it contends with low prices and weak demand, leaving many producers with tough choices.