“On the back of demand, chrome ore prices are at a healthy, sustainable level. Whether there will be further appreciation depends on Chinese New Year but there’s a strong case for prices to remain buoyant,” Pouroulis told Metal Bulletin on the sidelines of Mining Indaba in Cape Town on Tuesday.

“Typically, there is a slowdown in buying closer to the Chinese New Year but this year we are seeing more buying and restocking than usual and we feel more positive about demand over that holiday period,” he added.

“The prices of raw materials used in the production of stainless steel are all appreciating, including nickel, coal and chrome. The whole outlook leans favorably toward a robust environment for chrome concentrates,” he said.

Metal Bulletin’s UG2 chrome ore index, cif China, was assessed at $232 per tonne on February 2, up from $199 per tonne on January 5, 2018.

China’s increased domestic ferro-chrome production could result in a chrome ore deficit within as few as 18 months, Pouroulis warned.

“We are seeing capacity increases in Chinese domestic ferro-chrome and this could lead to a deficit in chrome ore in the next 18-24 months,” he said.

Tharisa enjoyed a bumper year in 2017, largely due to rising chrome ore prices, allowing the company to significantly improve its dividend.

“We differentiate ourselves from other mining companies in that we are a dividend payer,” Tharisa’s chief financial officer Michael Jones told Metal Bulletin.

Tharisa is targeting 1.4 million tonnes of chrome concentrate production this year and aims to increase production to 2 million tonnes per year by 2020.