Pretax losses widened to a better-than-expected 145 million rand ($18.9 million) in the six months to end December from a 27 million rand loss in the year-earlier period.
Losses improved from its second half of last year when weak demand forced it to close both furnaces.
'The ferrochrome market has improved over the past three months reflecting increased stainless steel utilisation not only in China but also in the United States and Europe and we are beginning to be encouraged by this,' said Chief Executive David Kovarsky on a conference call.
He expects ferrochrome prices to rise to $1.20-$1.30 per pound in the second quarter of this year.
'Whilst we expect short-term demand to remain positive, there may be volatility along the way,' he said in a statement.
Production costs of 80 cents per pound were higher than the group's 72 cent forecast made last September.
Electricity accounts for 18 percent of its costs and the company, like all South African producers, will be hit by power utility Eskom's proposed 35 percent a year price hike over the next three years. The price rises will be announced on Wednesday.
Shares in the company were down 2.8 percent at 1002 GMT, underperforming the 1.1 percent gain in the UK mining index .
Broker Numis Securities upgraded its pretax loss forecasts for the financial year to $11 million from $15 million previously as unit production costs beat its expectations.
Last month, IFM gave an upbeat view of prices and Chinese demand after posting an 85 percent jump in second-quarter output.
(Reporting by Julie Crust; editing by James Davey, Mike Nesbit)
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