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IFM posts 85% rise in production

Sunrise over the
IFM plant at
London, England — MININGREVIEW.COM — 21 January 2010 – South African-based International Ferro Metals Limited “’ an integrated ferrochrome producer headquartered in Sydney and listed on the London Stock Exchange “’ has given an upbeat view of prices and Chinese demand, after posting an 85% jump in second-quarter output due to the restart of a furnace.

Reuters reports from here that the company’s shares jumped as much as 11% after it said the sector was rebounding subsequent to being hard-hit from the global downturn last year.

Producers of ferrochrome “’ a key component in stainless steel “’ slashed output early last year, closing down furnaces as demand sunk, but much of the capacity in the sector has been re-started.

“Since the beginning of the year, stainless steel production utilisation levels, particularly in China, have increased,” chief executive David Kovarsky told a conference call. “What we’re seeing is that Chinese spot prices are outpacing this quarter’s European contract price.”

The first quarter contract price in Europe fell 2 cents to US$1.01 per lb, but is expected to rise in the second quarter. The price peaked at US$2.05 a lb in the third quarter of 2008.

“The spot price is indicating an increase in the Q2 contract price, but to what level, I’m not sure,” Kovarsky added.

The firm’s shares jumped as much as 11% and were up 7.5% to 36 pence early today, outperforming 0.2 percent fall in the UK mining index. The shares doubled last year to 30.5 pence, but ended 2009 well off a peak of 69.5 pence in August.

Ferrochrome production rose to 57 942 tonnes in the last three months of 2009 following the restart of a furnace in August, from 31 289 tonnes in the same period the previous year.

The world’s biggest ferrochrome producers are Xstrata and ENRC.