TAPPED IN: Production cuts mean nothing without improved demand

Ores and alloys producers have announced a swathe of new production curtailments in the past few weeks in response to poor market conditions.

Three production cuts, in chrome ore, ferro-chrome and silico-manganese were announced on December 1 alone, although two of these were attributed to operational reasons.
In general, the theory is that producers are no longer prepared to sell at a loss, so they won’t sell at all.
But the theory is undermined by the fact that prices continue to fall, despite the supply cuts, which won't have an effect if there is no uptick in demand.
Leading manganese ore producer South32 announced in mid-November that its South African mines would remain closed until January after a fatality led to a suspension on November 2.

On November...

Published

Janie Davies

December 07, 2015

16:49 GMT

London