Ferro Alloy Industry in India –
Challenges & Opportunities
Steel Furnace Association of India
Subodh Pandey
Chief of Marketing & Sales
Ferro Alloys & Minerals Division, Tata Steel India
1
DISCLAIMER:
The presentation is an amalgamation of
views and thoughts.
author’s own
Tata Steel does not necessarily subscribe to the views
and thoughts expressed in the presentation and should
not be held responsible for the same.
2
CONTENTS
CHROME ALLOYS INDUSTRY IN INDIA
MANGANESE ALLOYS INDUSTRY IN INDIA
3
STAINLESS STEEL DEMAND: SHIFT IN USAGE PATTERN
All figs in million MT
3.1
7%
2.2
1.8 (60%)
7%
• Construction, transport &
industrial applications to
drive future growth
1.6
1.8 (82%)
0.4 (13%)
1.2 (78%)
0.1 (5%)
0.3 (17%)
0.1 (5%)
0.3 (13%)
2005
2010
CrNi steels (300 series)
• Consumption mix shifting
towards premium grades:
300S+400S likely to
become 40% of total
demand
Cr steels (400 series)
0.8 (27%)
2015
CrMn steels (200 series)
End use application:
300S: Rail, Construction, Process Equipment &
Transport
400S: Electronics & Transport
200S: Tubular Products, Kitchenware
Ferro Chrome Demand
in India (‘000MT)
2005
2010
2015
300
350
500
4
INDIA FERRO CHROME PRODUCTION
fig in ‘000 MT
1,422
7%
363
1,006
123
421
208
30
31
39
50
110
45
40
85
91
216
180
450
143
145
FY06
FY11
IMFA
• While the demand of Ferro
Chrome in India would
increase, still India will
continue to be a net
exporter of Ferro Chrome.
120
611
TSL
• Further capacity additions
are also planned in the
next 5 yrs
50
100
10%
Balasore
Rohit
• India has been a net
exporter of value added
Ferro Chrome to the world
FY16
JSL
FACOR
• 60% production by 6
players while the balance
is fragmented
Others
India’s position in the Ferro Chrome market is primarily because of the
Chrome Ore availability in Orissa belt
Source: IFAPA
5
CHROMITE RESERVES IN INDIA
SUKINDA VALLEY: The Chrome Capital
3.5 million MT production in 2010
(12% of world in 2010)
Proven reserve: 213 million MT
Cr Ore Reserve
• 8 players are
having Cr ore
mines with most of
them having
downstream Ferro
Chrome production
facilities
• U/G mines likely to
be explored in next
five years with
higher grade of Cr
Ore.
• Higher
refractoriness in
Indian ore
Source: IBM
Source: IBM
6
ADVANTAGE INDIA:
Strong Growth
in Demand
• Stainless Steel production in India is projected to
grow @ ~7-8% in the next five years including
potential for increasing exports of Stainless Steel
from India.
• This will lead to a sustained demand of FeCr in
line with the Stainless Steel production.
Backward
linkage
• Indigenous Chrome ore available of High grade
quality.
Power cost
• Commissioning of many new power plants
including captive ones(CPP)- may help reduce the
gap in cost of power compared to SA, China
Proximity to
market
• Freight advantage in SS markets such as China,
Korea & Japan compared to Kazakh, South Africa
• Short sailing time.
7
HOWEVER, COMPETITIVE ADVANTAGES OF INDIA IS A
CONCERN COMPARED TO OTHER PRODUCING REGIONS
Key Success Factor
SA
Kazakh
China
India
+
+++
+
-
Chrome ore reserves
+++
++
-
++
Availability of Chrome ore
+++
++
-
+
Reductants
(Coke/Char/Anthracite)
++
+++
+++
-
Proximity to markets
++
+++
+++
++
Basic infrastructure (ports/
Rail/road)
++
-
++
-
Government Support
+++
++
++
+
Overall Competitive Advantage
+++
+++
++
+
Power
+++ : Strongly positive
8
CONTENTS
CHROME ALLOYS INDUSTRY IN INDIA
MANGANESE ALLOYS INDUSTRY IN INDIA
9
CARBON STEEL OUTLOOK IN INDIA
Projected Indian Carbon Steel Growth (Mn MT)
FP
LP
97
89
82
73
64
68
52
48
44
34
36
39
30
32
34
FY12 E
FY13
FY14
PMT of FP FeMn : ~3.5 kg SiMn : ~ 2kg
38
41
FY15
FY16
45
FY17
PMT of LP: FeMn : ~2 kg SiMn : ~12kg
Source MBR, CRU
10
SILICO MANGANESE DEMAND IN INDIA
800
SiMn Demand – Domestic (kT)
700
632
560
600
500
400
461
35
489
35
517
46
43
39
36
300
200
683
438
474
388
413
FY 12
FY 13
FY 14
FY 15
535
579
100
0
SiMn Long
SiMn Flat
FY 16
FY 17
SiMn Other
• Indian LP Steel production at CARG of 9% based on expected
infrastructure lead demand in the 5 year period.
11
MANGANESE ALLOY DEMAND IN INDIA
250
FeMn Demand – Domestic (kT)
210
196
200
180
166
150
153
140
100
50
18
18
11
18
32
34
33
29
24
20
39
35
29
26
25
12
13
11
86
89
96
107
FY12
FY13
FY14
FY15
115
126
FY16
FY17
0
Flat
Long
SS
Fdy & Oth
• Indian Steel & Stainless Steel (200S) production at CARG of 9% in
the 5 year period.
12
MANGANESE ALLOY PRODUCERS IN INDIA
1730
449
Oth
1250
MICL, 24
Haldia,
30
Maithan,
OTHER
S, 206
48
Sova, 50
Impex,
50
Sri, 50
CORP 18
SHYAM 19
IMPEX, 26
MEL, 54
HIRA, 32
SARDA
, 32
Hira, 70
TSL, 50
Shyam,
80
MEL, 65
SiMn Production in 2010
Key concern:
• Availability of
High Grade
Mn Ore in
India
• Increase in
power cost
across India
FeMn Production in 2010
• Many Producers (~ 50) with wide range of furnaces : 4 to 33 MVA
• Export led production growth (50% exports) of Mn Alloys based
on imported ore
• Capacity addition of ~ 954 kt in next 5 yrs in SiMn and ~ 223 kT
in Fe Mn
13
DEPENDENCE ON Mn ORE ON GLOBAL ORE MARKET
in million MT Mn content
14.0
15.0
4.2
15.6
16.5
17.5
18.8
6.3
4.4
5.5
4.9
4.2
1.8
1.9
1.7
1.7
2.8
2.5
2.7
2.4
2.6
3.3
3.4
2.7
3.2
3.5
3.1
3.5
3.7
3.8
4.0
4.2
4.3
CY11
CY12
CY13
CY14
CY15
CY16
1.6
1.5
2.1
China
Aus
SA
Gabon
Others
 SA, Gabon, Brazil & Australia have high grade ore reserve( >44% Mn content).
 China has primarily low grade ore reserves(<30% Mn Content)
 India Produces ~ 3MnT of Mn Ore mainly Medium Grade
14
MAJOR MN ORE PRODUCERS (INDIA)
In Million MT
Others, 0.5,
19%
Manganese
Ore India Ltd
, 1.1, 41%
Tata Steel,
0.32, 12%
Rungta , 0.2,
8%
OMC,
0.25, 9%
Sandur ,
0.3, 11%
Players
Grade Mn MT
MOIL
HG+MG 1.10
Sandur
MG+LG 0.30
OMC
MG
0.25
Rungta
MG
0.20
Tata Steel
MG
0.32
Others
MG
0.50
Total
2.67
Usage
Own use + Sale
Sale
Sale
Own use + Sale
Own Use
Own Use+Sell
MOIL is the largest player in open market for HG Mn
15
ADVANTAGE INDIA
Ability to
immediately
scale up
• Large Capacity for Ferro Alloys
• Industry currently operating at 60% of rated capacity
• New capacities coming up. Capacities coming up near
ports (Vizag, Haldia).
Location near
high growth
regions
• Freight advantage in markets such as China, Korea &
Japan compared to Ukraine or South Africa
• Short sailing time, freight advantage
Cost Advantage
over China
• Domestically sourced LG & MG Mn Ore available for
blending with imported HG Mn Ore.
• Comparable power, labour & inland freight costs to
China.
Import of Mn Ore has increased from ~ 0.3 MnT in FY07 to 1.3 MnT in FY11
16
IN SUMMARY…
• India has grown rapidly in Ferro Alloy Production and is a significant
producer with more than 50 % getting exported
• Robust growth in domestic consumption of both Ferro Chrome & Ferro
Manganese alloys due to strong growth in both Crude & Stainless Steel
• Apart from domestic demand, proximity to fast growing developing &
developed economies provides exciting export opportunity
Likely future growth of Ferro Alloys in India augurs well for
demand of furnaces. However…
• Impending power crisis – availability and prices of coal is a cause of concern
• Infrastructure issues – bottleneck in road, rail transport, port etc may impede
export driven growth as well imports of higher grade Mn Ore
• Investments in existing & new mines needs to be expedited to augment
mineral resources
• Technological investments: Usage of low grade mineral resources; increase
efficiency of furnaces for cost reduction / productivity enhancement
17
THANK YOU
18
POWER TARIFF IN INDIA
CY11 (c/kwh)
FeCr / Ch Cr producing
countries
CY12 (F) (c/kwh)
8
China
9
7.6
SA – Winter Season
9.5
5.4
SA – Normal
6.8
4
Kazakh
4.5
10.3
India - Orissa
10.9
5.9
India – Andhra
9.6
CY12 rates considered at same exchange rate as in CY11 for all currencies
• Likely increase in power tariff in India/China due to escalation in raw
material and input cost
• South African tariff continue to be on rise during winter season ~ 40%.
• Normal tariff in SA also to increase by 25%
• Indian power tariff to increase further due to unavailability and high
sourcing cost of imported thermal coal
Source : Own resources, info in public domain
Ferro Alloys & Minerals Division