Wednesday November 12, 08:44 AM
UPDATE 1-International Ferro Metals slashes output, spending
LONDON, Nov 12 (Reuters) - International Ferro Metals (LSE: IFL.L - news) will slash output and delay investment in the business due
to a slump in stainless steel demand that meant the company sold less than half of what it produced in recent months.
Shares in London-listed International Ferro Metals (IFM) were down 11.5 percent at 23 pence by 0813 GMT.
The company, which produces the ferrochrome alloy used in stainless steel, also said on Wednesday that Chief Executive Stephen Turner would step down at the end of the year to be replaced by Managing Director David Kovarsky.
IFM said in a trading statement that ferrochrome production in the three months to the end of September was 59,470 tonnes, 5 percent higher than in the previous quarter and up 41 percent on the year.
But sales were just 28,025 tonnes - down from 89,091 tonnes in the previous quarter and 29,450 tonnes a year earlier.
The discrepancy meant inventory levels surged to 33,265 tonnes as at the end of September from 'abnormally low levels' of 1,934 tonnes at the end of June.
The company, whose operations are in South Africa, intends to reduce that stockpile to about 20,000 tonnes by the end of its financial year.
'These challenging and volatile markets have impacted the demand for our product and we have responded prudently and swiftly to ensure the company is in the best position to weather the current storm,' Turner said.
IFM said it would cut ferrochrome production by up to 40 percent to about 12,000 tonnes a month, reduce costs and postpone capital expenditure projects.
An ore beneficiation plant, pelletising and sintering projects, the construction of additional furnaces and the expansion of mining production will all be deferred.
The company said Turner would become deputy chairman when he steps down as chief executive at the end of the year, with Executive Chairman Tony Grey to become non executive chairman.
(Reporting by Paul Hoskins; Editing by Rosalba O'Brien) Keywords: INTERNATIONALFERROMETALS/
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