Tokyo — Several producers of high-carbon ferrochrome have reduced output following a steep fall in Chinese prices, producers said Thursday.
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At least two Indian producers have cut production following an announcement of China's BaoWu Steel to reduce the June ferrochrome purchase price by 22.5% from May to Yuan 5,500/mt (62 cents/lb), producer sources said.
One producer with a capacity of 100,000-120,000 mt/year had cut output to 60% of capacity, a company official said.
Other producers producing silicomanganese along with ferrochrome, had suspended ferrochrome production, sources said, but this could not be confirmed.
An official from the first producer put the production cost at 80-82 cents/lb adding that 62 cents/lb was not sustainable.
BaoWu's monthly purchase price is usually followed by other Chinese market participants.
A South African producer has also cut production, but this is typical for this time of the year as power rates rise during June-August. The producer declined to comment on the current output level or reasons for the cut.
Chinese producers had also cut output, sources said, but this could not be confirmed.
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