According to Merafe Resources, South African ferrochrome production decreased by 25% year-on-year in 2020. Production was most heavily impacted in the second quarter due to COVID-19 related shut downs, while higher winter power tariffs and other cost pressures resulted in sustained lower production levels for the remainder of the year.
Global ferrochrome production decreased 11.2% year-on-year to 12.5 million tonnes in 2020. Global stainless steel production was also heavily impacted by COVID-19 during the first and second quarter of 2020 and quarterly production reduced by 12%.
Although production recovered in the third quarter of 2020 and hit a record volume of 14.2 million tonnes during the fourth quarter of 2020, full year production declined by 5.0%.
Global ferrochrome demand decreased by 5% year-on-year. South African chrome ore exports
decreased by 8.7% year-on-year to 13.5 million tonnes.
Despite a recovery in demand, ferrochrome and chrome ore remained in surplus during the second half of 2020 and prices were subdued over the period. Market prices have notably improved in early 2021 due to ferrochrome supply restrictions in China and further increases in global chrome unit demand.
The average European Benchmark ferrochrome price was US cents 111 per pound in 2020, 1.1% higher than the 2019 average.