(Updates with closing share price in seventh paragraph.)
Oct. 25 (Bloomberg) -- International Ferro Metals Ltd., a ferrochrome producer in South Africa, said fiscal first-quarter output slumped 26 percent from the previous three months after the temporary closing of a furnace in the period.
The furnace, at the Buffelsfontein plant 100 kilometers (62 miles) northwest of Johannesburg, returned to full production after the scheduled stoppage for roof upgrades, it said today in a statement. Output slid to 31,637 metric tons in the period.
Sales of ferrochrome, used in stainless steel, increased 21 percent to 41,929 tons in the fiscal first quarter ended September from the previous three months.
The company, based in Sydney, said it “remains cautious” on stainless steel because of Europe’s debt crisis. European producers have struggled to cope with overcapacity and higher costs as prices of the metal fall and demand weakens. Benchmark prices for ferrochrome in the region during the December quarter will remain unchanged at $1.20 per pound, the company said.
The company sees a “marked improvement” this quarter, with furnaces expected to reach full capacity of about 66,200 tons, Chief Executive Officer Chris Jordaan said by phone. The producer is also due to cut costs by 10.9 cents a pound, or more than 10 percent, by the fiscal third quarter, he said.
The company will increase the proportion of its electricity needs that it generates to about 11 percent from 5.6 percent, helping to reduce expenses. International Ferro will also benefit from a chrome ore supply agreement from Anglo American Platinum Ltd. in January 2012 at prices “significantly below” its in-house cost of concentrate production, it said.
International Ferro advanced 2.9 percent to 18 pence by the close of trading in London.
--Editors: Tony Barrett, Stephen Cunningham
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