Ferrochrome industry of South Africa (South Africa) is preparing for a disastrous beginning of 2020, as the price of minerals continues to fall, and reliability of electricity supply in the country remains uncertain.
Ferrochromium is a mineral, which is mainly used for the production of stainless steel and special steel. South Africa is the dominant player in the global industry, accounting for about 72% of world reserves of chromium.
According to Merafe Resources, South Africa in the industry of ferro-alloys employing about 200,000 people, directly or indirectly through related industries.
on Monday, Merafe said that the European benchmark price of ferrochrome will decrease by 1% in the first quarter of 2020 to 1.01 dollars per pound. In the fourth quarter of 2019 the price of ferrochromium is an average of 1.02 dollar per pound.
Prices for ferrochromium fell to 3-year low and continues to fall. In 2019 the European base price for ferrochromium decreased by 17.8%. The decline was largely due to weak global demand for stainless steel.
Complex effect of lower prices is likely to be a secondary concern for producers of ferrochrome in South Africa, once the leading energy company in the country Eskom announced on Monday that the country's energy industry remains "limited and vulnerable" to disruptions of supply, which in recent months has engulfed a quarter of all consumers in South Africa.
combined with the difficult economic situation it is expected that interruptions in the supply of electricity will have a negative impact on the future economic viability of some of the plants Merafe "and the broader sector of ferro-alloys in South Africa."
