Indian Metals & Ferro Alloys Falls 12% on South African Supply Fears and Price Correction

Shares of Indian Metals & Ferro Alloys (IMFA) plunged as much as 12% on Tuesday—its steepest single-day fall since January last year—closing down 8.3% at ₹1,337, amid growing investor concerns over global supply dynamics and domestic price pressures in the ferrochrome market. The sell-off was triggered by developments in South Africa, a major global ferrochrome supplier, where electricity regulator NERSA is fast-tracking Eskom’s application for a temporary reduction in Non-Performing Allowance (NPA) tariffs for 2026. Since power costs account for 35–40% of ferrochrome production expenses, any relief could enable smelters like Samancor and Glencore-Merafe to restart operations, boosting global supply and pressuring prices. Domestically, ferrochrome prices have corrected sharply from a peak of ₹1.20 lakh/tonne to ₹1.05 lakh/tonne, adding near-term headwinds for IMFA’s margins. With three down days in the last four sessions, the stock’s performance reflects market anxiety over rising competition and potential margin compression due to increased supply from South Africa. Investors are now closely watching tariff decisions and their implications for global ferrochrome pricing and India’s cost competitiveness.