On the back of consistently strong demand from stainless producers and rising contract prices, production of charge and high carbon ferrochrome increased across all regions in the first quarter of 2003. In response to the much improved market situation, ferrochrome producers have restarted previously idled furnaces and ramped up existing capacity in order to keep pace with demand. While this comes as no surprise, we anticipate that output has ramped up more quickly than we originally anticipated and as a result we have upgraded our first quarter production estimate. Consequently, in the western world we estimate that first quarter output increased by over 24 percent year-on-year and, compared with the fourth quarter of 2002, output rose by over 30,000 tonnes. Indeed, the major South African producers, Xstrata and BHP Billiton, account for much of this increase after restarting furnaces at Rustenburg and Tubatse respectively during Q1. Production results recently released by BHP Billiton indicated that total ferrochrome output, which includes high, medium and low carbon increased by 33,000 tonnes compared with Q4 2002 and by over 30 percent year-on-year. Further to this, we anticipate that these producers are now operating at close to full capacity, assuming that any problems experienced with the initial start-up of these furnaces have now been resolved.
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