UPDATE: International Ferro Metals Ferrochrome Sales Down 13% On Quarter

20th Jul 2010 07:50

(Adds chief executive comment, details) By Michael Haddon Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Mining company International Ferro Metals Ltd. (IFL.LN) Tuesday reported a decrease in ferrochrome sales during the three months ended June 30, but said greater operational efficiencies should increase production levels and lower costs. The London-listed ferrochrome producer sold 55,433 metric tons of the metal--a key ingredient for preventing corrosion in stainless steel--during its fourth quarter, compared with 64,063 tons in the previous quarter. IFM produced 51,331 tons of ferrochrome from its operations in South Africa during the fourth quarter, down from 54,394 tons during the previous quarter, but up from the 18,437 tons produced in same quarter last year. The company can produce around 265,000 tons of ferrochrome a year at full capacity, and said this quarter's reduction was due to ore feed inconsistencies and an unscheduled shutdown for four days to repair a furnace roof. Since the beginning of July furnace production has significantly improved as a result of more consistent ore feed and more stable furnace conditions resulting from the repaired roof, IFM said. Chief executive David Kovarsky said: "Full potential wasn't realized because of lower production levels and delayed shipments resulting from the Transnet strike. Since the last quarter, however, greater operational efficiencies have been achieved that should increase production levels, lower costs and will help us to meet future challenges." Benchmark ferrochrome prices are settled on a quarterly basis. The European benchmark price for South African ferrochrome decreased less than expected to $1.30 a pound at the start of July, reflecting a slowing of stainless production particularly in Europe and China. However, IFM said the combination of low global inventories and South African production cuts during winter means the ferrochrome market will stabilize over the next quarter. The company had a reduced inventory level of 17,976 tons after the fourth quarter, down from 22,748 tons at the end of third quarter. IFM had a cash balance of 47 million rand ($6.18 million) as of June 30, net borrowings of ZAR26 million as of March 31, and a working capital facility of ZAR500 million. The company's shares closed at 27 pence Monday. -By Michael Haddon, Dow Jones Newswires; 4420-7842-9289; [email protected] (END) Dow Jones Newswires July 20, 2010 02:50 ET (06:50 GMT)