Alloy steels maker Afarak sees strong demand for ferrochrome continuing in 2022

Finnish alloy steels and ferrochrome producer Afarak said Feb. 25 that it expects robust demand to carry on into 2022 for the stainless steel sector, and in turn for ferrochrome.

The London-listed company said both the automotive and aerospace industry posted strong results in the third and fourth quarters of 2021, with the trend likely to continue this year.

The European benchmark ferrochrome price settled at 180 cents/lb for Q1 2022, unchanged quarter on quarter.

Ferrochrome is a key raw material used to produce stainless steel.

Although referred to as the European benchmark, it is also used as the basis of supply for charge chrome contracts to stainless steel mills in the US.

Though the pandemic continues to be threat and may cause disruptions during 2022, the first two months of the year have shown improved demand and prices for low carbon ferrochrome, Afarak said.

"Having said that, we are also negatively impacted by increasing energy and consumables costs, as well as mounting logistics cost. Nevertheless, we resumed to profitable operations and reduced our total debt," the company said in a statement.

In the ferroalloys business, total 2021 production, including mining and processing, decreased 79% year on year to 26,379 mt, as output within the ferroalloys segment dropped significantly due to minimal mining activity at the South African mines, Afarak said.

Looking at the specialty alloys business, total 2021 output, including mining and processing, increased 11% year on year to 99,844 mt, as mining activity increased and processing levels for 2021 was 41.7% higher year on year, to keep up with the increase in demand for low carbon ferrochrome, the company said.

"During second-half of 2021, and particularly during Q4, the business conditions for the chrome industry have been good. Our specialty alloys segment performed well. We saw substantial increase in production and sales volumes, as well as increased sales prices," Afarak CEO, Guy Konsbruck, said in a statement.

"The order book for 2022 is very encouraging and the sales prices for Q1 have so far further increased. We are also hit hard by very strong price increases for energy and consumables in our German plant," Konsbruck said.