Indian Ferroalloys Industry Faces Challenges as Imports Show Consistent Growth

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Researched by Industrial Info Resources India (Delhi, India)--For five decades, India's ferroalloys sector has manufactured noble and bulk ferroalloys. The ferroalloys industry in India is not able to meet required demand from the steel industry, despite of having enough nameplate production capacity. Current ferroalloys production capacity in India is 3.64 million tons.

Both the manganese and chrome alloy manufacturers are facing shortages in the supply of ores. As the steel sector is projected to produce 124 million metric tons of steel in 2011, the domestic ferroalloys industry is unable to meet the requirements of the steel industry.

According to the data published by the Indian Ferro Alloys Producers' Association (IFAPA), capacity utilization of the ferroalloy industry is only 65% for manganese and chrome alloys. In India, 133 companies producing ferroalloys in bulk via 252 furnaces. Most of the companies are manufacturing either manganese or chrome alloys. A few manufacturers concentrate on the production of ferro silicon, and the rest produce noble ferroalloys, such as ferro vanadium, ferro molybdenum and other variants.

In a recent development, ferroalloys producers have asked the government to raise the import duty from 5% to 7.5% to protect the domestic industry. The reduction in duty has led to a reduction in production of domestic ferroalloys producers. Imports were 187,956 tons in 2009-10, compaired to 97,334 tons in 2005-06. The value of imports rose to $336 million in 2009-10, from $132 million in 2005-06. The industry is also demanding that power tariffs be brought on par with international prices, which it says are three to five times less in other ferroalloy-producing countries.

In spite of these challenges, the ferroalloys industry has shown consistent growth over the years. This is evident from the fact that the value of exports in the ferroalloys industry showed a growth of 37.96% to $1.56 billion in 2008-09, from $1.14 billion in the previous year. Strong growth in stainless steel is expected in the near future, with generally healthy economic conditions over the next few years, which will lead to high demand for ferroalloys.

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