International Ferro Metals said that Merafe Resources has dropped its ferrochrome production forecast for the months of June, July and August 2011 also citing the temporary weaker market conditions.

Merafe is the minority partner in the Xstrata Merafe chrome JV which is the world’s largest producer of ferrochrome.

The company said in a trading statement that the JV would run at about 50% of operating capacity from June to August instead of the previously announced level of 65% because of current market conditions.

Merafe also announced it expected to reported headline earnings per share of between 3 cents and 4 cents for the six months to end June 2011 as compared with headline earnings of 7 cents for the comparable period of 2010.

Ferrochrome and nickel are the essential ingredients required for the manufacture of stainless steel.

Mr David Kovarsky CEO of IFM said that, while the outlook for stainless steel remained strong with record production forecast for 2011 and 2012, production had dropped in the second quarter of this year compared with the first quarter. He added that "This has rippled through to ferrochrome demand."

(Sourced from www.miningmx.com)