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The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully

The Indian Ferro Alloy Industry:

An Overview

The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met

Perspective

The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met
The Indian Ferro Alloy Industry: An Overview Perspective The Indian ferro alloy industry has successfully met

The Indian ferro alloy industry has successfully met the challenges and faced the constraints faced by it in a determined manner. This is evident by the surge in foreign exchange earned by the industry through exports. Notwithstanding a difficult year, value of exports by the Indian Ferro Alloy industry recorded a 37.96 percent hike at US $ 1561.37 million in 2008-09 over US $11.38.78 million in the previous year. The IFAPA has made valuable suggestions to the government for a healthy development and growth of the industry and the government should take proactive steps to solve the problemsfaced bythe industry.

of the industry and the government should take proactive steps to solve the problemsfaced bythe industry.

17

OCTOBER 2010

industry and the government should take proactive steps to solve the problemsfaced bythe industry. 17 OCTOBER
industry and the government should take proactive steps to solve the problemsfaced bythe industry. 17 OCTOBER
industry and the government should take proactive steps to solve the problemsfaced bythe industry. 17 OCTOBER
industry and the government should take proactive steps to solve the problemsfaced bythe industry. 17 OCTOBER

Perspective

Perspective erro Alloys are vital additives that are used in steelmaking F as deoxidants as well

erro Alloys are vital additives

that are used in steelmaking

Fas deoxidants as well as

alloying agents. These are added in steel production process not only for deoxidation but also for grain size control as well as for improvements in the mechanical properties of steel. Depending upon the process of steelmaking, product quality envisaged and the type of steel being made, the requirement of Ferro Alloys varies widely. Indian Ferro Alloy industry has completed 50 yeas of its existence. Ferro Alloys are used in steelmaking and consists of less than one per cent of the total raw materials required for steel production. Despite being a very low constituent, ferro alloys are vital additives for steelmaking.

Ferro

Alloys

The demand drivers of Ferro Alloys are :

Demand

drivers

of

Crude steel production Alloy and special steel production Stainless steel production

Types of Ferro Alloys

The product mix of ferro alloys consists of bulk ferro alloys and noble ferro alloys Bulk ferro alloys are Ferro Manganese, Silico Manganese, Ferro Silicon, Ferro Chrome and Charge Chrome. Noble ferro alloys are Ferro Malybelenum, Ferro Titanium, Ferro Tungsten, Ferro Vanadium etc.

Capacities of Ferro Alloys in India

Capacities of Ferro Alloys in India during 2008-09 were as follows:

Manganese Alloys

2.50

mt

Ferro Silicon

0.20

mt

Chrome Alloys

1.30

mt

Noble Ferro Alloys

0.04

mt

Total

4.04 mt

mt Noble Ferro Alloys 0.04 mt Total 4.04 mt In 2007-08, the total capacity of ferro

In 2007-08, the total capacity of ferro alloys in India was 3.6 hmt. Hence there was a growth in capacity in 2009- 10 over the previous years was bout 11 per cent.

Capacities of bulk ferro alloys in India: MVA, number of furnaces and number of units are furnished in

Table1:

Table 1: Capacities of Bulk Ferro Alloys in India : 2008-09

Alloys/Particulars

Capacity (MVA)

No. of Tonnes

No. of Units

Manganese Alloys

1574

203

98

Ferro Silicon

196

30

16

Chrome Alloys

880

58

30

Total Bulk Ferro Alloys

2650

291

144

58 30 Total Bulk Ferro Alloys 2650 291 144 Estimated Capacity Utilisation of Indian Ferro Alloy

Estimated Capacity Utilisation of Indian Ferro Alloy Industry

Type of Ferro Alloy

Capacity (Mt)

Production in 2009-10 (Mt) (E)

Capacity

Utilization (%)

Manganese Alloy

2.50

1.40

56

Ferro Silicon

0.20

0.10

50

Chrome Alloys

1.30

0.85

65

Noble Ferro Alloys

0.04

0.03

75

Total

4.04

2.38

59

Alloys 0.04 0.03 75 Total 4.04 2.38 59 In 2007-08, capacity utilization was 65 percent. Expected

In 2007-08, capacity utilization was 65 percent.

Expected Capacity Additions of Bulk Ferro Alloys upto 2011-12

Manganese Alloys

42 units

980

MVA

Ferro Chrome

8

units

440

MVA

Ferro Silicon

3

units

54 MVA

Total Additions

1474 MVA

According to IFAPA estimates 13 captive power plants with a total capacity of 1,000mw may come up by

2011-12.

Raw Materials

Manganese Ore

As per Indian Bureau of Mines (IBM), the reserves as on 1-4-2005 were as follows:

Total Infrared Reserves

378m

Proved Reserves

77mt

Probable Reserves

61mt

Total Recoverable Reserves

138 mt

Karnataka, Jharkhand and Goa. As per IBM, India's present production of Manganese ore is over 2mt.

Manganese is an essential requisite for steel production for its capability of sulphur fixing, de-oxidising and good alloying properties. Manganese alloy is introduced in steelmaking in the form of ferro manganese, silico manganese and manganese metal. These are produced by the reduction of manganese ore with carbon silicon at high temperatures in blast furnaces and electric arc furnaces (EAFs). For production of one tonne of ferro manganese inputs required are: 2.6 tonnes of manganese ore, 0.5 tonnes of reductant, and 3 MWH of electricity. Silico manganese production is carried out by reduction of manganese ore, quartizite and manganese slag with coke.

s t e e l

S t a i n l e s s

Ferro Manganese Grade

5

mt

Medium Grade

8

mt

Total Proved Reserved Ferro Alloys Grade

13mt

Major reserves of Manganese Ore are of BE grade and occurs in Maharashtra, Orissa, Madhya Pradesh,

accounts

for

about

5/6

percent

of

the

total

production

of

ferro

manganese and silico manganese in India. The average consumption of manganese alloys by the Indian stainless steel industry is

manganese in India. The average consumption of manganese alloys by the Indian stainless steel industry is

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OCTOBER 2010

Perspective

Perspective like to post healthy growth in coming years, consumption of manganese alloys will also increase

like to post healthy growth in coming years, consumption of manganese alloys will also increase substantially. India is the seventh highest producer of manganese ore in the world. According to industry experts, the Indian manganese alloy industry has the potential to meet the challenges despite various constraints. With the necessary supportive measures from government the industry can move faster towards the path of sustainable growth and meet the requirement of the expanding Indian steel industry in future. Availability of high grade manganese ore is critical for the industry. Manganese Ore (India) Ltd is unable to meet the increasing demand of the domestic producers and they are compelled to import manganese ore. In 2008-09, the import of manganese ore by India stood at 824,297 tonnes as against 686652 tonnes in the previous year for the production of manganese alloy.

Chrome Ore

According to Indian Bureau of Mines (IBM), the reserves of chrome ore in India as on 1-4-2005 were as follows:

Total Inferred Reserves

213 mt

Proved Reserves

31mt

Probable Reserves

35 mt

Total Recoverable Reserves

6.6 mt

In 2008-09, about 3.5 mt of chrome ore was produced in India. Orissa alone produces about 98 percent of chrome ore in the country. The sole and major supplier of chrome ore to the country is ferro chrome industry is the Orissa Mining Corporation (OMC). But the supply of chrome ore is not sufficient for the industry. Tata Steel and other major chrome ore lease holders have stopped supplies to other producers and are using their own ore for their own ferrochrome plants. To avoid congestion by allotting leases to a number of ferro chrome producers for the captive use and in the interest of ferro chrome industry, government has allotted entire chrome ore deposits in Orissa to OMC which is a public sector undertaking so that they can judiciously mine and supply the materials to the ferro chrome producers in the country who donot have theirown miningleases. OMC has now the control over around 80 per cent of the total chrome ore leases in Orissa. The industry maintains that proper allocation is not taking place and the units outside Orissa are suffering. The industry,

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that proper allocation is not taking place and the units outside Orissa are suffering. The industry,

Perspective

Perspective therefore, has to depend on imports. In 2008-09, around 94,415 tonnes of chrome ore wasimported

therefore, has to depend on imports. In 2008-09, around 94,415 tonnes of chrome ore wasimported byIndia. The allocation policy of OMC is disturbing the dynamics of the ferro chrome industry as most of the unit located outside. Orissa has made huge investments particularly to set up their captive power generation capacities. The Indian Ferro Alloy Producers Association (IFAPA) is very much concerned with the decision to bar the natural resources all over the country, while exporting the same to other countrieswithout anyrestriction. About 80 per cent of high carbon ferro chrome produced in India goes for the production of stainless steel. With projected higher growth in stainless steel production in the country in future, the domestic consumption of HC ferro chrome will reach much higher levels. India holds a leading position in the world in the production of HC ferro chrome as well asin itsexports. India is the third highest global producer of chromium ore. Chrome ore is used in the production of chromium metal and various alloys of chromium with iron, nickel, cobalt tungsten, molybdenum etc. Chromium imparts strength, harness, toughness, magnetism and offers resistance to abrasion, corrosion and also acts as deoxidant. The use of chromium in steelmaking depends on the end-use purpose. Low chromium steels with less than five per cent chromium and small quantity of nickel is used in the production of rails, automobiles, armoured plates etc. Intermediate chromium steels containing up to 12 per cent chromium along with small quantities of tungsten, molybdenum or silicon are used in high speed values for engines and equipment which require resistance to abrasion, corrosion and oxidation. High chromium steels are stainless steel and super stainless steels used for the manufacture of cutlery, cooking, utensils, aircraft and high speed trains.

Power

Ferro alloy industry is highly power intensive. IFAPA maintains that though the generation cost of power in India is not high, the power tariff which has to be bourn by the ferro alloys industry is high because of cross- subsidization to the agricultural sector, low plant load factor (PLF) of the SEBs and other electricity producing units and high transmission and distribution (T&D) losses which is presently estimated at over 35 per cent. Electricity duty which varies from state to state in India creates additional financial burden for the industry. Though power sector reforms are going on since 2003, the impact of this development on long term prices of power, specially to the power intensive consumers like the ferro alloy producers of the country, is difficult to assess, since the electricity market in India still remain in a state of flux. Captive power generation may be helpful for the ferro alloy industry as the cost of captive power is much less than the rates charged by the state electricityboards(SEBs).

Production of Ferro Alloys in India

The production of various types of ferro alloys in India between 2005-06 and 2008-09are shown in Table 2.

Table - 2 : Production of Ferro Alloys in India between 2005-06 and 2008-09 (`000 tonnes)

Ferro Alloys

2008-09

2007-08

2006-07

2005-06

H.C. Ferro Manganese

370.5

378.0

281.0

256.1

Refined Ferro Manganese

14.1

13.2

15.7

16.9

Silicon Manganese

845.4

858.6

738.3

546.5

Refined Silicon Manganese

46.0

52.8

44.7

31.8

Ferro Silicon

99.6

83.7

92.6

90.7

HC Ferro Chrome / Charge Chrome

814.9

948.4

801.1

662.0

L.C. Ferro Chrome

 

2.4 0.2

0.2

0.2

Other Ferro Alloys

 

27.5 29.7

27.3

23.1

Total

2220.4

2364.6

2000.9

1645.4

Notes:

Notes:

1. Refined Ferro Manganese is the total of MC ferro manganese and LC ferro manganese

2. Refined Silico manganese is the total of MC silico manganese and LC silico manganese

3. Other ferro alloys included noble ferro alloys

the total of MC silico manganese and LC silico manganese 3. Other ferro alloys included noble

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OCTOBER 2010

It is apparent from the above table that in 2008-09, production of HC ferro manganese, silico manganese, refined silico manganese, HC ferro chrome, charge chrome and other ferro alloys has gone from the previous year. The decrease may be attributed to global slowdown of steel industry which started in October 2008 and affected the Indian steel industry adversely to some extent. The total production of ferro alloys in India in 2008-09 declined by 6.1 per cent over the preceeding year.

Exports of Ferro Alloys by India

The Indian ferro alloys producers are exporting substantial quantities of ferro alloys. In 2007-08, the exports had a share of 37.16 per cent of domestic production which increased to 43.24 per cent in 2008-09 despite the global slowdown of the global steel industry during the second half of the financial year. The export value in 2008-09 reached a lvel of US $1561.37 over US $113678 in the previous year recording a growth of 37.96 per cent. Detailed figures of the itemwised exports of various ferro alloys between 2005-06 and 2008-09 are furnished in the Table 3.

Perspective

and 2008-09 are furnished in the Table 3. Perspective value of total exports of ferro alloys

value of total exports of ferro alloys in the above comparative periods at 199.77 was also astronomical. Despite a year plagued by the global crisis, the Indian ferro alloy producers maintained a growth in quantity and value of exports in 2008-09 over the preceding year.

Imports of Ferro Alloys in India

India

between 2005-06 and 2008-09 are shown in details in Table 4.

Table 4: Imports of Ferro Alloys by India 2005-06 to 2008-09 (`000 tonnes)

Imports of

ferro alloys in

Ferro Alloys

2008-09

2007-08

2006-07

2005-06

HC Ferro Manganese

6.0

2.0

1.0

3.8

Refined Ferro Manganese

16.0

20.0

11.0

12.3

Silicon Manganese

0.2

0.5

0.2

12.3

Ferro Silicon

82.7

96.3

86.8

62.0

HC / LC Ferro Chrome / Charge Chrome

12.4

20.2

19.1

11.2

Other Ferro Alloys

15.4

17.2

9.1

6.7

 

Total

132.7

156.2

127.2

97.3

%

of Increase

(-) 15.4

22.80

30.73

18.5

Value in Million US$

340.99

271.17

172.13

133.56

%

Increase in Value

25.75

5

7.50

10

% Increase in Value 25.75 5 7.50 10 Table 3 : Exports of Ferro Alloys by

Table 3 : Exports of Ferro Alloys by India 2005-06 to 2008-09 (`000 Tonnes)

Ferro Alloys

2008-09

2007-08

2006-07

2005-06

HC Ferro Manganese

101.3

101.2

42.0

19.8

Refined Ferro Manganese

20.2

12.6

12.2

4.0

Silicon Manganese

300.4

262.6

152.1

119.3

Ferro Silicon

37.2

9.4

7.9

7.8

HC Ferro Chrome / Charge Chrome

491.7

483.7

287.7

258.9

Other Ferro Alloys

9.3

9.3

8.6

13.8

 

Total

960.1

878.8

510.5

423.6

%

of Increase

9.25

72.14

20.51

27.62

Value in Million US$

1561.37

1131.78

377.55

271.75

%

Increase in Value

37.96

199.77

38.93

(-) 1.24

It is observed that HC ferro chrome/charge chrome had the highest share in the Indian export of ferro alloys during the above years. the growth of total exports in 2007-08 was very high at 72.14 per cent over the previous year. The increase in the

72.14 per cent over the previous year. The increase in the It is apparent from the

It is apparent from the above table that total import of ferro alloys has declined by 15.4 percent in 2008-09 over the previous year due to a drop in demand following the global crisis which started in October 2008.

over the previous year due to a drop in demand following the global crisis which started

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OCTOBER 2010

the previous year due to a drop in demand following the global crisis which started in

Perspective

Perspective However, the value of imports has increased by 25.75 percent due to high prices during

However, the value of imports has increased by 25.75 percent due to high prices during the first half of financial year 2008-09.

A l l o y s

Producers in India

The names and product mix of some of the major producers of ferro alloys in India are shown in Table 5.

M a j o r

F e r r o

invested over Rs 5,000 crore and it provides employment to about 2.4 lakh people both directly and indirectly. The industry has created adequate capacity to meet the domestic demand as well as to make substantial quantity of exports. About 41 per cent of the total installed capacity remained idle in 2008-09 for a decline in domestic

Table 5: Names and Product Mix of Some of Major Ferro Alloy Producers

Name of the Producer

Product Mix

Ferro Alloy Corp Ltd, Vizhinagram, A.P.

Ferro Manganese Ferro Chrome

Maharashtra Electromelt, Chandrapur, Maharashtra (A subsidiary of SAIL)

Ferro manganese, Silico manganese

Universal Ferro & Allied Ltd., Bhandara Maharashtra (units 1&2)

Ferro Manganese, Silico Chemicals, Ferro Silicon

Sandur Manganese & Iron Ore Ltd., Hospet, Karnataka

Ferro Manganese, Ferro Chrome

Ispat Alloys Ltd, Balasore Orissa

Ferro Manganese, Ferro Chrome

Indian Charge Chrome Ltd, Chaudwar, Orissa

*

Charge Chrome, H C Ferro Chrome

Ferro Alloy Corp Ltd, Balasore, Orissa

Charge Chrome, H.C. Ferro Chrome

Indian Metals & Ferro Alloys Ltd., Rayagara, Karaput, Orissa

*

Ferro Chrome, Charge Chrome, Ferro Silicon

Tata Steel Ferro Alloys Plant, Bamlipar, Kendujhar, Orissa

*

Hc Ferro Chrome, Charge Chrome

Tata Steel Ferro Alloy Plant, Rawmet, Orissa

Hc Ferro Chrome

Jindal Ferro Alloys Ltd., Kothavasala, AP

Ferro Chrome

Jindal Stainless Ltd., Raigarh, Chattisgarh

Ferro Chrome

Tata Steel Ferro Alloy Plant, Gala Kendujhar, Orissa

Silico Manganese, Ferro Orissa Manganese

Nav Chrome Ltd., Raigarh, Chattisgarh

Ferro Manganese, Silico Manganese

Ferro Chrome Ltd., Orissa

Ferro Chrome

VISL, Bhadravati, Karnataka (A SAIL unit)

Ferro Chrome

Navi Bharat Ferro Alloys Ltd., Polanche, AP

Ferro Chrome, Silico Manganese

Rohit Ferro Tech Ltd., Bankura, WB

Ferro Chrome

M.B. Ispat Corp. Banunara, Bardhaman, West Bengal

Ferro Manganese, Silico Manganese

VBC Ferro Alloys Ltd., Rudrasa, Medak, AP

Silico Manganese, Ferro Manganese

100 percent Expert Oriented Units (EOUs)

*

 

Constraints faced by the Indian ferro alloy industry The Indian ferro alloy industry is facing many constraints, of which some are highlighted below. The Indian ferro alloy industry has

highlighted below. The Indian ferro alloy industry has 24 OCTOBER 2010 demand, high price and scarcity

24

OCTOBER 2010

demand, high price and scarcity of chromium and manganese ores. Customs duty on ferro alloys has been reduced to zero, which has opened flood gates of imports at lower cost from China, Kazakhstan, Russia

Perspective and South Africa Ferro alloy is a power intensive industry. The cost of power

Perspective

Perspective and South Africa Ferro alloy is a power intensive industry. The cost of power in

and South Africa Ferro alloy is a power intensive industry. The cost of power in India various from 245 to 490 paise per unit whereas in China it is 150 paise, Kazakhstan- 78 paise, Russia-85 paise and South Africa - 105 paise. The Customs Duty on imports of ferro alloys is NIL at present whereas the duty on inputs required for manufacturing ferro alloys varies from 2 to 7.5 percent.

raw

materials and other inputs Increase in road and railway freight and non availability of railway wagons as per requirement.

Major suggestions of Indian Ferro Alloys Producers' Association (IFAPA)

The IFAPA has made various suggestions to the Government to help the Indian ferro alloy industry for its healthy growth and make it globally competitive. Some of these are mentioned below:

The government should reimburse the Customs Duty on all ferro alloy excluding ferro nickel The government has reduced the import duty on ferro alloy to zero. IFAPA maintains that it is imperative that inputs like manganese ore, chrome ore, vanadium pentoxide and other ores under Chapter 26 of Customs Tariff as also the duty on anthracide coal should be brought down to zero percent to reduce the cost of manufacturing all ferro alloys. Exports of manganese ore, chrome ore and concentrates should be stopped immediately, for consuming them for use by the ferro alloy and steel industry in future. The Geological Survey of India (GSI) and Indan Bureau of Mines (IBM) should undertake further exploration of chrome ore deposits beyond 100 meter depth seriously and evaluate its expected life for the country. The government should handover the work of further mineral exploration to private parties with requisite experience. It is necessary to the

Stiff

rise

in

the

cost of

government to initiate fast track exploration programme like aerial survey to look potential deposits which need further exploration proving deposits.

Conclusion

The Indian Ferro Alloy industry has successfully met the challenges and faced the constraints faced by it in a determined manner. The industry is earning valuable foreign exchange through exports. Despite a difficult year, value of exports by the Indian ferro alloy industry recorded 37.96 percent hike at US $1561.37 million in 2008-09 over US $1138.78 million in the previous year. The IFAPA has made some valuable suggestions to the government for healthy development and growth of the industry. The government on its part should consider those suggestions seriously and take proactive steps to solve the problems faced by the industry. The reduction of Customs Duty to zero on imports of ferro alloy is jeopardising the interest of the industry. The distribution of chrome ore by the Orissa Mining Corporation (OMC) should ensure to serve the interest of the ferro alloy units located all over the country. The apparent consumption of alloy and stainless steel in India in 2008-09 at 3.69 mt recorded growth of 9.82 per cent over 3.36 mt in the previous year. The trend is expected to continue in future also and will help the domestic consumption of ferro alloys substantially in future. The government should consider the problems of the Indian ferro alloy industry and make an in-depth study of its problems highlighted by IFAPA and take judicious proactive steps to support this small but vital industry in all possible manners.

Acknowledgments This article is presented by T S Sundaresan, Secretary General, IFAPA at the 9th Asian Steel Conference held on March 19-20, 2010 in Mumbai organised by Steelworld.

IFAPA at the 9th Asian Steel Conference held on March 19-20, 2010 in Mumbai organised by
26 OCTOBER 2010
26
OCTOBER 2010