JSE Stock Alert: Merafe Resources Eyes 10% Rally as Bulls Target 144 ZAC
Merafe Resources Ltd (JSE: MRF) ended the last week's session at 131 ZAC, rising 2.34% on steady trading volume of over 818,000 shares.
Quick overview
- Merafe Resources Ltd (JSE: MRF) closed last week at 131 ZAC, up 2.34% despite a decline in chrome and ferrochrome prices.
- The stock is showing bullish technical patterns, with key support at 130 ZAC and potential upside targets at 135 and 139 ZAC.
- Long-term prospects for Merafe remain positive, driven by increasing global demand for ferrochrome and a favorable position in the market.
- Macro indicators in South Africa are stabilizing, which could enhance investor sentiment and support Merafe's growth.
Merafe Resources Ltd (JSE: MRF) ended the last week’s session at 131 ZAC, rising 2.34% on steady trading volume of over 818,000 shares. The move comes despite a broader slump in chrome and ferrochrome prices, with cautious sentiment still weighing on South Africa’s mining equities.
Spot market trends paint a bearish short-term picture. High-carbon ferrochrome is flat at 7,700–7,900 yuan/mt in Inner Mongolia, while South African chrome fines (40–42%) slid $10 to $265–$270/mt. Subdued buying activity from Asian steelmakers continues to pressure prices, keeping traders defensive.
Key Market Quotes:
- Chrome ore (Tianjin Port): 54–56 yuan/mtu
- Zimbabwe concentrate (46–48%): 55–56 yuan/mtu
- SA chrome fines futures: $265–$270/mt
Still, Merafe’s price action on the JSE tells a more optimistic story.
Bullish Pattern Signals Technical Breakout Potential
Technically, Merafe is building strength within a clean ascending channel that’s been in play since May. After reclaiming the 130 ZAC level—now a key support—the stock continues to hold above its 50-period EMA (currently at 126 ZAC). The MACD has flipped into positive territory, and what I often see with this type of setup is a bullish continuation, especially when paired with higher lows and rising volume.
Chart Snapshot:
- Support: 130 → 126 → 121
- Resistance: 135 → 139 → 144
- Momentum Bias: Bullish while above 126 ZAC
If the stock pushes through 135 and 139, the next upside target sits at the upper channel boundary near 144 ZAC—roughly a 10% move from current levels. A close above 139 on solid volume would confirm the breakout.
Long-Term Outlook: Macro Stability and Strategic Positioning
Despite weak short-term demand, the outlook for ferrochrome producers like Merafe remains constructive. The global ferrochrome market—valued at $19.5 billion in 2024—is expected to reach $33 billion by 2034, driven by rising stainless steel demand across Asia and Africa.
Merafe, through its joint venture with Glencore, is well-positioned to ride this long-term wave.
South Africa carries a competitive advantage in chrome ore reserves and processing capacity. That’s even if their export margins remain under pressure due to fluctuations in rand and logistical costs.
At home, macro indicators have stabilized:
- Inflation is cooling, supporting household spending.
- Fuel prices are easing, reducing operational costs.
- South Africa’s primary budget surplus—the first in 16 years—has restored some fiscal credibility, lifting overall investor sentiment.
For now, Merafe sits at the intersection of technical momentum and long-term opportunity. If broader market conditions stabilize and chrome prices find a floor, this stock could become one of the more compelling small-cap mining plays on the JSE.
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