South African miner Tharisa is seeing strong demand and higher prices for its chrome concentrate shipments to China, despite concerns over the impact of China’s covid-19 lockdowns, its chief operating officer told Reuters on Thursday.
Tharisa, which produces platinum group metals (PGMs) and chrome concentrate in South Africa, on Thursday reported a 49.8% increase in first-half net profit to $113.4 million driven by higher output and strong commodity prices.
China, the world’s biggest chrome importer, imposed strict covid-19 restrictions on economic hub Shanghai after its biggest spike in infections since the initial outbreak in Wuhan in early 2020. Several other Chinese cities have also been hemmed in by partial lockdowns.
Although Tharisa’s chrome exports to China have not been impacted by logistical issues, bottlenecks remain a worry, chief operating officer Michelle Taylor told Reuters.
“The concern is a consequence of covid-19 lockdowns and logistics bottlenecks and delays. Of course, there’s a lot of discussions around the Chinese economy and what that means,” Taylor said.
Demand, however, remained strong and Tharisa has been selling its chrome concentrate for an average of $295 per tonne since April 1, she said, up 69% from the average price of $175 a tonne in the six months to end-March.
“In terms of demand for the product, it’s still strong, our customers are still buying to the order book as usual. We’ve seen prices increasing on the back of reduced inventories in China,” she said.
In the six months to March 31, Tharisa increased its chrome concentrate production by 6.3% to 776,700 tonnes, while its PGM output was 22.2% higher at 91,800 ounces.
The company expects to produce between 165,000 and 175,000 ounces of PGMs and between 1.75 million and 1.85 million tonnes of chrome concentrate in the full year.
(By Nelson Banya; Editing by Helen Reid and and Mark Potter)