New Year May Bring Cheer To Ferro Chrome Producers

The year 1997 may have something good in store for high-carbon ferro chrome producers/exporters.

The year has started on a better note with South African producers rolling over the price prevalent in October/December 1996 for supply during January/March 1997 at around 43 cents CIF per lb of chromium.

Present indications are that there will be some increase in FeCr prices from April 1, 1997, as stainless steel prices have been up in the US and Europe.

Demand for ferro chrome is also strong in all the major consuming countries such as the US, Europe and Japan. Besides, the accumulated stocks of ferro chrome have also been sold.

 

Locally, NTPC, which had cut off power to ferro alloy producers and exporters, has restored it. The supply will continue till March 30, 1997, during which the ministry of steel will monitor the performance of recipients.

World-wide, there has been steep cuts in production of high carbon ferro chrome. A ferro chrome plant of 80,000 tpa capacity in Croatia has been closed since May 1996 and may remain shut for some more time due to low prices of ferro chrome and high prices of imported chrome ore.

Another FeCr plant in Slovakia with 15,000 tpa capacity may stay closed till mid-1997 due to shortage as also high cost of power.

Some ferro chrome producers in China have also stopped production of ferro chrome on account of low prices, and are unlikely to start production till the prices rise to around 50 cents per lb of chromium against 42 cents a lb of chromium now.

In Philippines, around 125,000 tonnes of ferro chrome capacity remains unused, while in India, more than 100,000 tonnes capacity is lying idle. In Kazakhstan, out of 900,000 tonnes, only around 200,000 tonnes is used.

In South Africa, the capacity has been diverted from ferro chrome to manganese alloy. But touching 82 cents a lb of chromium, which was reached in middle of 1995, will remain a distant dream as lot of new capacities have come into production.

As a result, even reaching 50 cents a lb by end of 1997 will be an achievement.

However, in South Africa, Hernic Ferrochrome (Pty) Ltd, which is a new entrant in ferro chrome, recently commissioned two 37 MVA furnaces and is producing at 95 per cent capacity. Annual production is likely to be at 135,000 tonnes.

It will also produce about a million tonnes of chrome ore and ore not needed in ferro chrome production will be exported.

Hernic wants to put up a metal recovery plant as also a sintering plant. Its chrome reserves can sustain ferro chrome production for 30 years.

Chrome Corporation of South Africa is also adding 240,000 tonnes of capacity, taking its total capacity to 600,000 tonnes.

BIFR dose for Visvesvaraya Iron

A spell under BIFR would jolt Visvesvaraya Iron and Steel Ltd (VISL) into reality. SAIL must rue the day it took over VISL some seven years ago.

Thereafter, it has poured over Rs 250 crore as capital and loans in the venture, with the company incurring more and more losses.

Because there were power cuts, SAIL built up 530 cu metre blast furnace to produce pig iron through the coke reduction route.

VISL shut down and sold its Demag electric pig iron furnaces and is now capable of producing at least 150,000 tonnes of steel through oxygen route, but perhaps is producing less than half of it. The shortage of power is no longer an excuse, it is just a management failure.

The company also produces ferro silicon, with a capacity of 20000 tonnes per year. It spent over Rs 10 crore in modernising one of the smelting furnaces to reduce power consumption.

Even in ferro silicon purchase, SAIL was paying Rs 6,000 to Rs 7,000 per tonne more to VISL than what it would have paid if it were to procure its ferro silicon from outside.

Since power was short, SAIL advanced about Rs 50 crore to the Karnataka Electricity Board to put up a power plant.

Since the power plant has been delayed, KSEB is supplying some power to the unit at a concessional rate.

If VISL wants more power, it can get it from NTPC for export production. Around 30 units in ferro alloys industry are drawing power from NTPC, and there is no reason why it cannot get it, particularly with SAIL support.

VISL has a bloated workforce of over 6,000 officers and workers who produce barely 60,000 tonnes of steel.