Mp Power Cost Hike Hits Manganese Alloy Producers

According to sources, it may be further raised to a record Rs 4 shortly.

The state had offered itself as a haven for ferro alloy producers and dozens of small scale units put up furnaces five years ago. Power at that time was not abundant and cheap.

Since then power shortage in the state has been chronic.

When around June 1996 power rates had risen to Rs 3.30 in the state, ferro producers went on strike and closed down their furnaces for more than six weeks.

Some concessions were granted and the power rate was reduced to between Rs 2.90-3 per Kwh.

But , the relief was short lived as rates have been hiked again.

It is reported ferro producers in MP will increase the prices of ferro manganese by more than Rs 1,000 to Rs 20,500 per tonne.

However, it is doubtful whether these prices will hold because silico manganese is being freely sold at Rs 20,000 and ferro manganese at Rs 18,500-19,000.

There are now three units operating in West Bengal, the latest Mecca for new alloy producers who have a power tariff ranging between 160 and 180 paise per Kwh.

These units are offering ferro manganese at a discount of around Rs 18,000 per tonne.

The move by Madhya Pradesh producers to increase the price, may therefore fail.

The biggest manganese alloy producer in Maharashtra, Universa Ferro, remains closed. The Madhya Pradesh government has given night power tariff concession of 70 paise per Kwh and in addition abolition of 11 paise duty for Vidharba producers.

But out of the 200,000 tonnes of manganese alloy capacity, hardly 50,000 tpy is working. Sandur manganese, the other large producer of manganese alloy is also working at low capacity.

More steel producers are trying to import manganese alloy as the levy has been reduced to 20 per cent.

The only silver lining for the industry is the slight rise in prices of silico manganese in the world market.

With the rise in world ferro chrome prices, capacity is being diverted from manganese to charge and there is likely to be shortage.

So a rise in silico manganese is around the corner, but the strength of the rally cannot be predicted.

Some producers feel prices may touch $600 per tonne which is very optimistic.

The year 1997 may turn out to be fruitful for chrome and manganese alloys in the world market. Whether Indian producers will reap the benefit remains to be seen.

Pig iron production: World pig iron production in 1996 was 519 million tonnes (527 mt).

Much of the fall was in Western Europe. It fell from 102 million tonnes in 1995 to 98 million tonnes in 1996.

Most of the increase came in Asia.

The continent increased production from 231 mt to 236 mt.

China was the biggest producer of pig iron in the world. Production increased from 102 mt to 105 mt.

Cost of iron ore production: Cost of producing iron ore in India is one of the lowest in the world, according to the Australian Institute of Mineral Economics.

In 1996 it was $3.30 for India, $3.61 for Brazil, $5.45 for Australia, $12.23 for the United States of America and Canada.

India is one of the largest exporters of iron ore in the world after Brazil and Australia.

In 1995-96, India imported about 1.6 million tonnes of iron ore, mainly needed by the three gas-based DRI plants on the West Coast.