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What is the story about?
Shares of Indian Metals and Ferro Alloys Ltd. (IMFA) fell as much as 12% on Tuesday, January 6, extending losses for the second day in a row. This is the biggest single-day fall that the stock has had since January last year.
The stock has declined in three out of the last four sessions.
Let’s break down what’s driving this negative sentiment around IMFA.
First, the concern comes from South Africa who is a key global supplier of ferrochrome and the question is will South African ferrochrome smelters restart?
The reason steams from reports that suggest that South Africa’s electricity regulator, NERSA is fast-tracking an application from Eskom which is the country’s state-owned power utility responsible for electricity generation, transmission & distribution.
Eskom has requested a temporary reduction in the NPA tariff for Calendar Year 2026.
Earlier, major producers Samancor and Glencore-Merafe had declared hardship under their NPAs, including the take-or-pay provisions, as high power costs made South African smelters globally uncompetitive. Electricity alone accounts for 35% – 40% of ferrochrome production costs.
With tariff relief discussions on the table, efforts are clearly being made to revive South Africa’s ferrochrome industry. If tariffs are reduced, some South African smelters could restart increasing global supply which could put some pressure on prices.
The second concern is closer to home. Domestic ferrochrome prices have cooled from a recent peak of ₹1.2 lakh per tonne to around ₹1.05 lakh per tonne currently.
Shares of Indian Metals and Ferro Alloys are trading 8.3% lower on Tuesday at ₹1,337, having made an intraday low of ₹1,217.
The stock has declined in three out of the last four sessions.
Let’s break down what’s driving this negative sentiment around IMFA.
First, the concern comes from South Africa who is a key global supplier of ferrochrome and the question is will South African ferrochrome smelters restart?
The reason steams from reports that suggest that South Africa’s electricity regulator, NERSA is fast-tracking an application from Eskom which is the country’s state-owned power utility responsible for electricity generation, transmission & distribution.
Eskom has requested a temporary reduction in the NPA tariff for Calendar Year 2026.
Earlier, major producers Samancor and Glencore-Merafe had declared hardship under their NPAs, including the take-or-pay provisions, as high power costs made South African smelters globally uncompetitive. Electricity alone accounts for 35% – 40% of ferrochrome production costs.
With tariff relief discussions on the table, efforts are clearly being made to revive South Africa’s ferrochrome industry. If tariffs are reduced, some South African smelters could restart increasing global supply which could put some pressure on prices.
The second concern is closer to home. Domestic ferrochrome prices have cooled from a recent peak of ₹1.2 lakh per tonne to around ₹1.05 lakh per tonne currently.
Shares of Indian Metals and Ferro Alloys are trading 8.3% lower on Tuesday at ₹1,337, having made an intraday low of ₹1,217.
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