KEY POINTS
- The ferrochrome sector struggles with high costs and low demand.
- Chinese competition weighs heavily on South Africa’s ferrochrome outlook.
- Policy changes aim to support ferrochrome industry recovery.
South Africa’s ferrochrome and chrome ore industries are navigating one of their toughest periods in years, with Merafe Resources warning that the sectors are at a “crucial juncture” amid mounting market and operational pressures.
The Johannesburg-listed miner reported a sharp decline in interim profit, sliding by R233 million in the six months to June 30. Ferrochrome sales plunged 55 percent to 76,000 tonnes, while chrome ore shipments slipped 14 percent to 217,000 tonnes. Platinum group metals were the lone bright spot, up 9 percent to 7,112 ounces.
Ferrochrome sector braces for sustained headwinds
Soaring electricity costs, persistent load shedding, and intensifying competition from Chinese producers are driving the industry’s troubles.
These pressures forced the Glencore-Merafe Chrome Venture to halt several smelting operations between April and June, while demand for chrome ore units weakened in the first half of 2025.
Chinese market impact on ferrochrome outlook
China’s dominance in global ferrochrome production and shifting buying patterns remain a key risk for South African producers. Merafe acknowledged that adapting to changes in domestic demand while keeping a close watch on the Chinese market will be critical in the months ahead.
Policy support offers cautious optimism for ferrochrome
Despite the challenges, Merafe expressed cautious optimism by highlighting recent government policy interventions that aim to support the ferrochrome industry and encourage beneficiation.
The company said both its ferrochrome and chrome businesses could benefit from improved energy stability and the smooth rollout of regulatory reforms.
For the remainder of 2025, the focus will remain on preserving cash, controlling costs, and allocating capital efficiently. The board declared an interim gross cash dividend of 4 cents per share, down from 20 cents in the same period last year—a reflection of the tougher trading environment.
