Merafe FY ferrochrome output up 48 pct

[] — MERAFE RESOURCES LIMITEDMerafe Resources said on Tuesday its full-year ferrochrome output rose by 48%, after it restarted suspended furnaces following a upswing in demand.

Demand for ferrochrome, which is used in stainless steel to prevent corrosion, was hit by the global economic crisis, forcing companies in top producer South Africa to slash output.

Merafe, which operates a joint venture with Xstrata and had suspended up to 80% of its capacity in 2009, has since restarted its furnaces, but said the pick-up in production was partially offset by scheduled maintenance work.

The company said ferrochrome output attributable to Merafe rose to 300 000 tonnes in the year to end-December, compared with 203 000 tonnes a year earlier.

Merafe said ferrochrome producers achieved a 46% rise in the average European benchmark ferrochrome price in 2010 compared to the previous year.

However, the company said in a statement margins remained under pressure, due to the stronger rand against the US dollar. The South African currency has strengthened around 25% since the start of 2009.