Organized by the Indian Ferroalloys Producers’ Association, the International Ferroalloys Conference witnessed an overwhelming response in terms of participation. Leading technical experts from across the steel and ferroalloys industries deliberated on a range of pressing issues and topics. Below is a list of the key takeaways from the conference, thanks to a clutch of power-point presentations delivered by industry leaders:
1) Union Steel Minister Chaudhary Birender Singh in his address underlined the key priorities of the National Steel Policy 2018. Pointing out the fact that projected capacity enhancement by 2030 was a jaw-dropping 300 million tonnes, with a per capita increase in the consumption of steel from the current 65 kg to a mammoth 160 kg, Singh beseeched Indian ferroalloys producers to cruise along the highway of technological upgradation and urged them to produce quality products to support the advanced and special steels markets in the country.
2) IFAPA Chairman Manish Sarda highlighted the pressing problems holding the Indian ferroalloys industry back, some of which are high power tariff, rising raw materials costs, and imposition of duty on metallurgical coke and manganese ore. However, he expressed optimism that the government would enable ferroalloys producers to retain their competitive edge by devising a set of progressive policies.
3) Somesh Biswas of Tata Steel spoke on the emerging global steel scenario and shed valuable light on the future trajectory of the steel industry. After the boom in the commodity super cycle, he said, protectionism has now set in and prices henceforth would be governed by duties and taxes. Hunger for infrastructure, he said, would drive steel demand, and while China’s production would decline significantly, India’s total crude steel production would reach 220-240 million tonnes by 2030.
4) In his presentation on the future of stainless steel, Nirmal C Mathur of Jindal Stainless Steel said that the apparent use of stainless steel is growing steadily in India and there is a big scope for a steep hike in per capita consumption. Mathur predicted that stainless steel demand would grow by around 8% to 10% in the next 2 to 3 years driven by demand arising out of the automotive industry, railways, transport, construction, and infrastructure.
5) In his presentation Kevyan Jafari Tehrani, MD, Jame Tejarat Company Ltd., dwelt on Vision 2025 of the Iranian steel industry and how US sanctions were imperiling Iran’s economic development. As part of its vision, Iran would need 162 million tonnes of iron ore to produce upstream products, but 30 years of sanctions have hit the country’s exports hard and existing projects with massive investments are in a limbo. With India exporting 420,00 tonnes of ferro manganese and 510,000 tonnes of silico manganese to Iran, he said, Indian exports to Iran could go up in the coming days. In fact, India has the golden opportunity to benefit from the sanctions.
6) Hill Summer, founder of Million Link, spoke at length on how the Chinese government has affected crude steel and raw material prices. ‘Deproductivity is the key’ in China, he said, adding that as many as 400 mini BFs have been destroyed in the country and environmental protection has become an industrial decelerator. In the short term, production quota may fall by 50% in China and alloys imports may increase significantly.
7) Aloys d’Harambure, Executive Director of International Magnesium Institute (IMNI), spoke on disturbing trends such as rising protectionism and trade wars, manganese ore oversupply outstripping demand, and increasing stocks for producers at Chinese ports. He said manganese ore and alloy prices, due to these reasons, will likely remain volatile in the short term, though demand will remain steady.
8) In his presentation, TK Pattnaik, Director (Commercial), MOIL, said production of manganese-based alloys in India increased from 1.44 million metric tonnes in 2010 to 2.44 million metric tonnes in 2017. In light of the National Steel Policy 2017, India needs to produce 11 million tonnes of manganese ore by 2030 to meet its objective of producing 300 million tonnes of crude steel, which means that production has to grow by 12% a year. The principle challenges lie in the direction of exploring new mines and resources, acquiring overseas resources, producing high-grade manganese ore, and reducing dependence on low-phosphorous manganese imports.
9) Ashiya Sibiya, Commodity Analyst at CRU, dwelt on falling ferroalloys prices in China, and the likelihood of reduced demand from October 2018 onwards. She said Chinese manganese ore imports are likely to rise in the near term, and although global steel production will be led by India, Malaysia will make its presence felt in the South Asian ferroalloys market and may emerge as a threat to Indian exports.
10) Victor Constant, Analyst at ICDA, said as many as 70 ferro chrome plants suspended operations in China in 2017 and output has dropped significantly in the first half of 2018.
11) Srinivas Shenoy of Tata Steel said India is witnessing a perfect balance in its chrome ore and alloys market. The Indian ferro chrome industry contributes to 10% of the global market, and while the country produced 3.81 million tonnes of stainless steel last year, it produced 3.69 million tonnes of chrome ore. India produced 1.3 million tonnes of chrome alloys in 2017 and consumed roughly about 0.6 million tonnes.
12) In his presentation on metallurgical coke and its dynamics in the ferro industry, Himanshu Bajaj of IMR said India is greatly dependant on Chinese merchant coke as well as US and Australian coking coal because there is no internal supply consistency. China, he said, has been the traditional price setter when it comes to met coke. Further, the $25 and $16 anti-dumping duty that the government has imposed on Chinese and Australian met coke respectively has further compounded the problems of Indian producers.
13) Head of Marketing at Tata Power, Vikram Singh’s paper on power procurement for industrial consumers revealed that Tata Power generated 10,857 MW of power last year and 7436 MW was thermal power. India has an installed capacity of 3,43,000 MW. In the renewable energy segment, the private sector contributed 65,000 MW. While power deficit in 2010 was 8.5%, it came down to 2% in 2017, belying expectations that India is a power-surplus country. Barriers to open access in the power sector, he said, were cross subsidy surcharge and stranded capacity surcharge.
14) Director of Asia Minerals, Gautam Kumar spoke on South Africa’s perspective in the manganese ore market. He pegged SA’s reserves at 200 million tonnes and resources at 4185 million tonnes, which is roughly 78% of total global resources. After the financial crisis in 2008, he said, South African exports of manganese ore have steadily increased. While exports were a modest 7.2 million tonnes in 2010, they almost doubled to 15.6 million tonnes in 2017.
15) Iyer Srinivasan, MD of Elkem South Asia Private Ltd. said increasing demand and uncertain supply of ferro silicon is a result of global protectionism and trade tensions. About 69% of the total global ferro silicon produced goes to the steel industry, he said. China accounts for 65-70% of ferro silicon produced globally and stringent environmental norms in that country coupled with the shutdown of old and inefficient plants as well as seasonal variations due to fluctuating power prices are causes for concern. However, Srinivasan expressed hope that prices would strengthen after October 2017.
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