World Pig Iron Prices Going Up On Short Supplies

Supplies are short from Russia and other GIS countries. In Brazil, more than one million tonnes of pig iron capacity is shut due to problems of charcoal procurement.

Brazil is one of the large merchant producer exporter of the product. In 1996 it produced 4.5 million tonnes of pig iron, of which over two million tonnes were exported.

However, in 1989, Brazil produced as much as six million tonnes of pig iron, of which three million tonnes were exported.

Now 15 independent pig iron producers in Minals Gerals area have banded together to undertake joint exports and offer larger quantities for shipment. But, the independent producers deny they are operating a cartel to hike prices.

 

The 15 companies have a monthly capacity of 150,000 tonnes for exports and offer tonnage of maximum 40,000 tonnes in one lot.

According to environment regulations, pig iron producers in Brazil are required to take their charcoal from replanted forests.

The quota now is 80 per cent of the requirement. This would soon go up to 100 per cent.

As a result, nearly 60 producers have already closed down.

India has opted for large capacity in merchant pig iron and many of the

producers are facing bleak days due to falling international prices, high

cost of imported coke and severe domestic competition.

But, merchant pig iron producers in India should see better days in 1997-98.

World Ferro Chrome: The improvement in the world ferro chrome market has prompted some of the bigger producers to bring in more capacity during 1997. Thus, the Emak plant in Kazakstan which produced 350,000 tonnes of ferro chrome in 1996, is likely to produce 500,000 tonnes in 1997. The Donskoy mine, the largest single mine for chrome ore in the world, is also likely to step up its production of chrome ore during the year.

Elkem, which had stopped production of ferro chrome, has started its two furnaces and will produce over 120,000 tonnes during 1997.

In 1996 Japan produced 193,000 tonnes of ferro chrome, but imported 681,368 tonnes of high carbon ferro chrome. It consumed 828,000 tonnes. In the current year, both imports and consumption are likely to go up.

In India it is said that local prices of high carbon ferro chrome have already touched Rs 28,000 per tonne and may go up further if the world market rises further.

Indian Charge Chrome Ltd, which was closed for some time, has reportedly started working and has been able to achieve record production during mid- May and June.

However, fortunes of ferro chrome industry will depend on those of the stainless steel industry during 1997. According to some estimates, production of stainless steel in 1997 will be 15.8 million tonnes and the demand for ferro chrome should be buoyant.

However, the world market for stainless steel is not improving and in the Far East, prices of HR coils 304 are said to be $1500 per tonne and the prospects for an increase have been bellied.

It is said stainless steel billets are available around $1250 per tonne and production of the same in India is not viable. Stock levels of stainless steel are said to be building up every where. Therefore, the industry may slip with causing problems for the world ferro chrome industry.