By Alan Patrick Ryan
One BIG thing missing from the Samancor Chrome and Glencore announcements on significantly cutting back production were details on the size of the cutbacks.
According to analysts the cutbacks could range from 35% to 65%, but that’s all conjecture. “The producers have to sell the cutbacks to workers, the unions,
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BEE and minority shareholders and the government,” one analyst pointed out. “And all four probably want the bare minimum.”
While the effect on the market won’t be initially great due to poor demand and inventories, but it could be devastating to workers and the government who count on the smelters to provide jobs and money.
“It’s going to take some tough negotiations,” the analyst suggested, “and I am betting against the companies to make ‘significant reductions. The cutbacks will probably result no sales to the spot market in China.”
It is expected that both South African charge chrome producers will try to find a way lower their power costs especially with new higher Eskom rates taking effect on Apr. 1.
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The news, however, had a chilling effect on the two smelters’ buyers. “We always knew Glencore wanted to sell the business, but we assumed the new owners would want to continue producing,” one mill said.
“It’s hard to find a good replacement for the significant tonnage both producers have. But I have to start looking around now—2026 is fast approaching.”
