Indian Ferro Chrome manufacturers are facing a severe raw
material crunch at present and the prices quoted in the market are below their
break-even point.
SteelMint spoke to a top official from a major manufacturing
company for Ferro Chrome in West Bengal.
Raw material &
liquidity crunch
According to him, “availability of chrome ore is a major
issue for us. We were supposed to get chrome ore by 2nd of Nov
but till now there has been no supply. OMC has been looking to e-auction chrome
ore but it has been cancelled thrice & other major suppliers like Tata have
also curtailed supplies from last 15 days”.
“Our money is also blocked as we have made advance payment
for the raw material which has not been supplied yet. So we are in a
dead-lock”, he added.
Prices quoted below
break-even
When asked about the current prices, he said, “HC Ferro
Chrome is quoted at around Rs 64,000/MT Ex-plant on a 60% pro-rata basis. But
the current prices are below our break-even and further cut in prices will not
be feasible for us.”
European buyers
quoting very low
Speaking about the export market he added, “We export around
50% of our output to countries like China, Korea, Western Europe and US. But
currently we are not quoting any price for exports as we had made bookings 2
months back. So, we are completing our pending orders. Moreover, Europeans at
present want to procure at a very low cost and with power cost in India being
so high, we cannot supply at such low rates.”
Prices should improve
by Rs 500-1000/MT in Jan’13
When asked about the future outlook of the market he said, “market will remain stable for another 15-20 days but prices should move up by
Rs 500-1000/MT by the beginning of January as we have noticed from last 3-4
years that market for Ferro chrome normally picks up in the last quarter of
every year. Buyers in both domestic & export market get active in the last
quarter and Europeans will also be back from their Christmas holidays by then.
So, we hope to see some improvement in January 2013.”
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