Tharisa released its Q1 2024 calendar results, showing chromite production of 402.7kt with a concentrate price at US$286/t. 

South African chromite supply has had a year of highs and lows that we expect to continue into 2024. The highs are seated firmly in consistently elevated concentrate prices, breathing positivity back into primary chromite mines in South Africa. On the low side, the South African chromium miners have faced challenging logistic supply chains over the last two years, with a degrading Transnet infrastructure and opportunistic trucking swinging between key export commodities depending on coal and iron prices.

Despite the positive pricing environment, Tharisa has still dialled back from its Vision 2020 target of reaching 2Mtpy of chromite concentrate output laid out back in 2018, with guidance for the year remaining flat year-on-year. Demand for South African chromite reached record levels in 2023, with the reboot of ferrochrome production growth in China. In 2024, Project Blue expects the Chinese ferrochrome statistics to continue to rise and for the first time, Chinese company Xin Ganglian is expected to take the leading position as the largest ferrochrome producer, leaving the South African powerhouses of Samancor and Glencore in its wake, having already shot ahead of Kazakhstan’s ERG last year.

Rising ferrochrome production in China will require South African chromite exports to continue to increase and low port stocks in China will support the current pricing environment to continue. With improved fundamentals beginning to show for iron ore demand returning in China, logistic capacity in South Africa will again look to swing to the highest bidder and add further pressure to an already strained export supply chain and also support the high chromite ore prices. In addition, a struggling PGM industry could start to impact by-product UG2 chromite output, although in the short-term we expect PGM miners to focus on PGMs from UG2 ores over Merensky to leverage the chromium market as much as possible.