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Brazilian alloy producer Ferbasa's ferro-chrome and ferro-silicon output continued to lag year on year in the second quarter, although upticks were registered for certain products and increased selling prices helped the company to more than offset surging costs.
Ferbasa produced 51,628t of ferro-chrome in the second quarter, down by 1.7pc year on year but 4.5pc higher than in the first quarter. Production in the first half of the year fell by 4.4pc to 101,021t.
Ferro-silicon output totalled 23,541t, a 0.6pc decline from a year earlier and 2.4pc lower than in the first quarter of this year. But in contrast to ferro-chrome, first-half output was up by 3.7pc at 47,655t. Notably, high purity ferro-silicon production — accounting for 45pc of silicon alloys produced — increased by just over a third.
Sales in the first half hit 135,989t, up by 2.3pc year on year, as a 28pc expansion in exports offset a 16.5pc fall in domestic demand — in line with a 15.6pc decrease in domestic crude steel consumption, World Steel Association (WSA) data show. The contraction in domestic demand follows record supplies consumed by Brazil's steel industry last year.
Global crude steel production retracted by 5.5pc to 949.4mn t in January-June, compared with the previous year, according to WSA data. Meanwhile, global stainless steel production totalled 29.2mn t in the first half of the year, 2.7pc lower than last year.
The fall in steel demand and production is at least partially the result of governments increasing interest rates to combat inflation, a situation worsened by the war in Ukraine, Ferbasa said.
Net revenue in the first half rose by 61pc on the year — comprising 25.3pc domestic growth and 116.3pc growth in the foreign market — because of a 76.2pc increase in the average market price of ferroalloys as instabilities arising from the war in Ukraine drove global commodity markets higher.
Argus-assessed prices for ferro-silicon averaged €3,443/t ddp in the second quarter, with a high of €3,950-4,250/t in mid-April. This is considerably higher than an average of €1,614/t ddp in the same quarter of last year.
Low carbon, 60-64.99pc ferro-chrome prices show a similar trend, averaging $3.80/lb ddp in April-June, while for the same period a year earlier prices averaged just $1.71/lb ddp.
The company's costs, however, also increased, with first-half costs up by just under a third year on year, reflecting increases in raw materials, reducers, chromium ore and in particular energy.
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