The High Court’s order to OMC for supplying chrome ore at
maximum price will affect private players within the state who do not have their
own captive mines and are dependent on OMC for chrome ore.
“JSL,Visa Steel and Rohit Ferrotech are the major chrome ore
consumers in the state who buy the raw material from OMC. After this interim
high court order they have to spend more to buy chrome ore at par with the
consumers outside the state till the final judgement. However they would be reimbursed
of the excess amount if the court ruling comes in favour of
OMCâ€Â, said sources.
Other chrome ore users like FACOR and IMFA have their
captive chrome mines and they do not depend upon OMC. So, this decision may not
affect them.
Increased price of chrome ore will also lead to hike in Ferro Chrome prices. According to a top official from a leading private manufacturing company, “Chrome ore from OMC will now be expensive by Rs 2,000/MT for us and the over all cost of production will move up by around Rs 5,000/MT. So, hike in production cost will be reflected in the end product also”.
“Currently, we are quoting HC Ferro Chrome at Rs 66,000/MT Ex-Plant on 60% pro rata basis. Prices are expected to move up further by Rs 1,000/MT in the near term”, he added.
Speaking about the reimbursement of the excess amount, he said, ” We have already paid advance amount to OMC for Chrome ore. So, now we will have to pay the differential amount only. If the final order goes in favour of OMC then they will reimburse the excess amount or settle it in the future contracts”.
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