JOHANNESBURG (miningweekly.com) – The European benchmark price of ferrochrome has been settled 6% lower for the first quarter of this year, the JSE-listed Merafe Resources said on Friday.

The first-quarter price of $1.08/lb is seven cents a pound lower than the current $1.15/lb price for the fourth quarter of 2014, the JSE-listed Merafe Resources has announced.

Merafe owns 20.5% of the Glencore Merafe Chrome Venture, in which it is a pooling and sharing partnership with the large London-, Hong Kong- and Johannesburg-listed Glencore.

The venture owns and operates several chromite mines and 22 ferrochrome furnaces that have a combined yearly installed capacity of 2.34-million tons of ferrochrome, which is used mainly in stainless steel production.

Global stainless steel production reached 21.1-million tons in the first half of 2014 and the world is expected to produce 41.9-million tons of stainless steel for the year, beating last year’s record 38.5-million tons.

Stainless steel production is expected to increase by 5.5% a year for the next three years and the demand for ferrochrome is expected to follow suit with an increase of 6% a year for the next three years.

In August, the black-controlled Merafe, in which the 300 000-strong Bafokeng community and the State-owned Industrial Development Corporation are the main shareholders, reported earnings of R460.2-million, up on the R236.5-million for the first half of 2013.

The company’s headline earnings a share rose 134% to 8.9c a share in the six months ended June 30 on 25% higher ferrochrome sales to 171 000 oz.

Its ferrochrome production was 16% higher at 168 000 t in the six months to June 30, when revenue rose 35% to R2-billion.

Cash from operating activities was R265-million and profit in the six months was R224.7-million, compared with R33.5-million in the first half of 2013.