Afarak Group Sees Strong Q3 Production Growth Despite Challenges

Afarak Group SE, a specialist alloy producer, reported a significant increase in its overall production for the first three quarters of 2026, up by 17.9% when compared to the same period in 2025. This growth was primarily driven by the South African mines, which saw a surge in activity almost tripling (up 210.3%) year-over-year (YoY) in Q3 2026. This surge heavily contributed to the YTD production, resulting in a 32.8% increase over the same period last year.

In contrast, processing volumes decreased by 46.5% in Q3 2026 compared to the same quarter last year, driven by a strategic initiative to optimise inventory levels. The Turkish mining operations maintained steady growth, with an increase of 12.5% in Q3 2026 when compared to Q3 2025.

Looking ahead to Q4 2026, the company faces challenges due to oversupply in China, which has led to a regression in the demand for Cr Ore. The substantial hike in freight costs and falling market prices have significantly impacted profit margins. However, there are some positive signs, as LC FeCR consumption and pricing are slowly picking up in the European market, particularly in the aeronautical sector, where demand remains healthy. High freight costs from India and China are currently discouraging large imports.

The strengthening of the US dollar is expected to improve the company's results, along with the effects of the Carbon Border Adjustment Mechanism (CBAM) and the introduction of a mandatory product liability and recall insurance for all ferrochrome products. Afarak Group SE is listed on NASDAQ Helsinki (AFAGR) and the Main Market of the London Stock Exchange (AFRK).

In summary, Afarak Group SE's production report for Q3 2026 highlights the company's robust performance in South Africa, despite challenges in processing volumes and market conditions. The company remains optimistic about its outlook for the remainder of the year.