KAZAKH miner ENRC has recorded a big jump in first-quarter output following a rebound in demand for stainless steel.
Ferrochrome production, which is used as a component in stainless steel, climbed a massive 70 per cent to 345,000 tonnes.
The company also said revenue for the three months to 31 March had “increased significantly” on the year before, following rising prices for its commodities.
Ferrochrome prices are expected to rise further on the back of a four-day transport strike in South Africa, the world’s largest producer of the alloy.
Dominic O’Kane, analyst at Liberum Capital said: “Whilst we think the strike would have to continue for at least another week...to start having a sustained impact on the ferrochrome market, traders have likely already started to scramble for supply which could give the market some short-term momentum.”
But longer term ENRC warned that many metals prices might lose momentum after a blistering rally in 2010.
“The outlook for prices in 2010 is well ahead of those which prevailed in 2009. However, the pace of recent increases may not be sustained,” the company said.
ENRC posted strong first-quarter output in ferroalloys and iron ore, which make up the bulk of its profit, after cutbacks last year when demand and prices tumbled during the downturn.
Output of ferroalloys surged 76 per cent to 446,000 tonnes, while production of primary iron ore concentrate gained 59 per cent to 4.24m tonnes.
The company said costs in all divisions except energy rose in the first three months of the year.
“Material and labour costs increased very significantly following volume growth,” it added.
Production is expected to be at broadly full capacity for the full-year.