Chrome & Manganese Update: Power Tariff Deal Clears Way for SA Ferrochrome Restarts

South Africa's ferrochrome sector has a concrete reason for cautious optimism: a negotiated 62c/kWh electricity tariff has cleared the way to restart the Boshoek and Wonderkop smelters. In manganese, Tshipi reported about 3.5 Mt of FY26 output and sales, using rail, road and Lüderitz to keep ore moving. Outokumpu unveiled a low-CO₂ route to higher-grade ferrochrome, and Capesize strength gave the Baltic Dry Index four straight daily gains. Fresh Chinese chrome and manganese prices were not publicly available in the last 48 hours, so this update focuses on supply, logistics and policy. Here is what buyers, sellers and investors need to know.

62c/kWh Power Tariff Clears Path for Two Ferrochrome Restarts

Ferrochrome smelters run by Samancor Chrome and the Glencore–Merafe Chrome Venture have secured a negotiated electricity tariff of 62 South African cents per kWh (SMM). The Glencore–Merafe Venture confirmed in June that it had finalised negotiated pricing agreements with Eskom after the National Energy Regulator of South Africa (NERSA) approved the tariff. The agreements give the venture a three-year electricity pricing framework.

That framework enabled the planned restart of the Boshoek and Wonderkop smelters, which had been suspended because of adverse market conditions and high electricity costs. SMM noted that the announcement did not say how much extra ferrochrome will be produced, and did not confirm that both furnaces are back at full operation (SMM).

For the chrome chain, the point is simple: power pricing, not ore availability, has decided whether South African furnaces run. Every furnace that restarts consumes ore at home that would otherwise be shipped, so ore sellers should watch how quickly these two plants ramp up.

Tshipi Tops 3.5 Mt of Manganese as Logistics Flexibility Pays Off

Manganese producer Tshipi produced about 3.5 Mt of ore in FY26, made up of 2.9 Mt of high-grade and 0.6 Mt of low-grade ore, ahead of its full-year target (ferro-alloys.com). It built low-grade stockpiles early in the year, then prioritised high grade as market conditions improved, and stopped low-grade production in the March 2026 quarter. Sales matched output at 3.5 Mt, also above plan.

Logistics did much of the work. About 2.6 Mt moved by rail and 828 kt went through the Port of Lüderitz. Rail availability beat planning assumptions, helped by engagement with Transnet, but Tshipi also used extra road capacity for exports and to work around derailments and planned Transnet shutdowns, which pushed up haulage costs. It is working with Transnet on rail capacity and tariffs to KuGompo City. Energy costs rose in the March quarter as Middle East conflict lifted diesel and freight prices; the mine holds a one-million-litre tank farm, about 13 days' consumption, and does not expect a material risk to operations. A stronger rand weighed on first-half margins (ferro-alloys.com).

New competing supply is also taking shape. Element 25 started early site works in September at its Butcherbird Expansion Project in Western Australia, which targets 1.1 Mtpa of manganese concentrate at about 31.5% Mn. All of the output is committed to OM Materials for an initial five years from first shipment. The project has an Ore Reserve of 101.4 Mt at 10.4% Mn and a binding A$50 million NAIF finance facility (ferro-alloys.com).

Outokumpu Targets Low-CO₂ Ferrochrome as Chrome Shipments Slide

Finnish stainless steel maker Outokumpu has unveiled EvoMaterials, a proprietary sulphidation-based process for producing low-CO₂ metals (SMM). It is designed to raise the chromium content and chromium-to-iron ratio of ferrochrome, to recover metals from secondary material streams, and could later extend to nickel and molybdenum. A pilot plant in Londonderry, New Hampshire, is expected to start in the first half of 2027, scaling from kilogram tests to one tonne. Outokumpu is weighing sites in Europe and the US for an industrial plant targeted for 2030.

This is a long-dated project, but it shows that Western stainless producers want lower-carbon, higher-grade chrome units and are prepared to develop their own processing routes to get them. Chrome ore suppliers with consistent, well-documented grades are best placed for that demand.

In the nearer-term market, SMM's weekly chromium review, published on 21 October, led with a 40.78% week-on-week fall in chrome ore shipments as China's port stocks declined (SMM). The full review was not publicly available, so we cannot add price detail from it.

Pricing Snapshot

Commodity/Item	Grade / basis	Price	Date
Ferrochrome smelter power tariff	South Africa, negotiated (Samancor, Glencore–Merafe)	62c/kWh, three-year framework	Published 21 Oct
Chrome ore shipments	Global, weekly (SMM review headline)	−40.78% w/w	Published 21 Oct
Chrome ore / ferrochrome	China spot	Not publicly available in window	21–23 Oct
Manganese ore / silicomanganese	China spot	Not publicly available in window	21–23 Oct
Baltic Dry Index	Main index	2,693 (+13)	22 Oct
Baltic Dry Index	Main index	2,680 (+87)	21 Oct
Baltic Capesize Index	Index / average daily earnings	3,848 (+1.45%) / US$31,396	22 Oct
Baltic Capesize Index	Index / average daily earnings	3,793 (+7.69%) / US$30,895	21 Oct
Baltic Panamax Index	Index / average daily earnings	2,151 (−2.40%) / US$19,358	22 Oct
Baltic Supramax Index	Index	1,890 (+1.07%)	22 Oct
Bunker fuel	Durban VLSFO / LSMGO / HSFO, daily change	+US$17/t / +US$26/t / +US$4/t	22 Oct, 09:00 GMT
Bunker fuel	Durban VLSFO / LSMGO / HSFO, daily change	−US$41/t / −US$69/t / −US$17/t	21 Oct, 09:00 GMT
Brent crude	ICE front month	US$112.37/bbl (+US$2.24)	22 Oct, 09:00 GMT

Sources: SMM, SMM, Baird Maritime, Baird Maritime, Hellenic Shipping News, ENGINE, ENGINE. Fresh chrome ore, ferrochrome, manganese ore and silicomanganese spot prices from SMM, Mysteel and ferro-alloys.com were behind paywalls or not published in the last 48 hours, so we have not repeated older assessments. Durban bunker figures are daily changes, not absolute prices. Brent was US$110.13/bbl (−US$1.28) on 21 Oct.

Logistics and Regulatory Highlights

Freight. The Baltic Dry Index rose 87 points (3.36%) to 2,680 on 21 October, its highest since 13 October, as the Capesize index jumped 7.69% to 3,793 and average Capesize earnings rose US$2,453 to US$30,895/day (Baird Maritime). On 22 October the index added 13 points to 2,693, a fourth straight daily gain. Capesize earnings reached US$31,396/day, Supramax rose to 1,890, its highest since August 2022, while Panamax fell to 2,151, its lowest since 24 August (Baird Maritime; Hellenic Shipping News).

Fuel. Durban bunker prices swung sharply. On 21 October VLSFO fell US$41/t, LSMGO US$69/t and HSFO US$17/t, with Brent down US$1.28 to US$110.13/bbl (ENGINE). On 22 October Durban VLSFO rose US$17/t, LSMGO US$26/t and HSFO US$4/t, as Brent climbed US$2.24 to US$112.37/bbl (ENGINE).

Rail. Transnet Freight Rail says it has set a Guinness world record for the longest train: 696 empty CR13/14 ore wagons stretching 7,602 m on the Sishen–Saldanha heavy-haul line, using distributed electric and diesel-electric locomotives. The train reached Loop 18 from Saldanha on 18 October, and the run data will be used to validate train-handling models (Railway Gazette). Tshipi's results show both sides of the network: better-than-planned rail availability, but still a need for road haulage during derailments and shutdowns (ferro-alloys.com).

Policy. The 62c/kWh negotiated tariff is the main regulatory development for the chrome chain this week (SMM). We found no new export taxes, bans, AGOA decisions, CBAM rulings or mining law changes affecting chrome or manganese published in the last 48 hours.

What This Means for African Exporters

Chrome sellers: Restarts at Boshoek and Wonderkop could absorb some ore locally, but output figures have not been given. Track the ramp-up and keep an eye on shipment volumes after last week's sharp fall.
Manganese sellers: Tshipi's year shows that flexible routing across rail, road and Lüderitz protects volumes, but at a cost. New Australian concentrate from Butcherbird adds to competition in Asia over time, so cost control and reliable delivery matter.
Buyers: Capesize earnings above US$31,000/day make large parcels dearer, while Panamax and Supramax remain more mixed. Durban bunker prices are moving by tens of dollars a day, so build fuel adjustments into contracts.
Investors: The 62c/kWh framework is the clearest test yet of whether cheaper power revives South African ferrochrome. Outokumpu's low-CO₂ ferrochrome pilot is worth watching as an early sign of demand for greener chrome units.

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