The Indian steel major will become the largest supplier of HC ferro chrome in the country by the end of FY16, post its deal with few companies to convert chrome ore to ferro chrome for them.
Tata Steel has finalized a conversion agreement with three companies namely Tirumala Balaji Pvt. Ltd., Aarti Steels Ltd. and Nava Bharat Ventures Ltd. for conversion of chrome ore into ferro chrome. These three plants together will be dedicated to produce 15,000 TPM chrome ore for Tata Steel.
It may be noted that Tata Steel was given a non-captive status for its Sukinda chrome ore mines according to the MMDR Act, 2015. Moreover, Tata Steel’s ferro chrome plants do not have the support of a captive power plant. Therefore, this conversion agreement will be beneficial steps, which will enable maximum utilization of raw material resources.
Tata Steel also expects to start operations at its upcoming ferro chrome plant in Gopalpur by March 2016, with an annual capacity of 50,000 MT in the first phase. This plant, along with the company’s existing ferro chrome plants in Bamnipal and Cuttack will produce 15,000 TPM. Hence, in total Tata Steel will be potentially supplying 30,000 TPM of ferro chrome. This would propel Tata Steel to the status of being the largest supplier of ferro chrome in India, followed by Visa Steel and IMFA.
Indian Ferro Chrome Scenario
India is a significant player with almost a tenth of the global ferro chrome output and produces about 1 MnT pa of the material. At present growth of stainless steel production/consumption has been somewhat sedated. This year, the challenge for the ferro chrome industry stemmed primarily from excess of supply over demand. Ferro chrome production in China increased, but consumption declined owing to slowdown in its steel industry. A general bearish trend is evident and stainless steel mills are cutting back on procurement as demand for their product too has contracted.
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