Here is some good news for Ferro-chrome producers of Indian states that have huge chromite ore deposits. The chromite sector here, is set for a double boost. Reason being; less production of chromite in South Africa, as compared to previous years due to reduction in electricity. South Africa is one of the largest producers of the metallurgical and non-metallurgical chromite.

Here is some good news for Ferro-chrome producers of Indian states that have huge chromite ore deposits. The chromite sector here, is set for a double boost. Reason being; less production of chromite in South Africa, as compared to previous years due to reduction in electricity. South Africa is one of the largest producers of the metallurgical and non-metallurgical chromite. According to reports, producers in South Africa are finding it hard to meet the demands of global market. Orissa accounts for 98 per cent of the country's chrome ore deposit, and the time is just right to en-cash the situation and take benefit out of it. The State's other ores comprise 71 per cent of bauxite, 33 per cent of iron and 32 percent of manganese resources in India.

Rabindra Kumar Jena, Joint Managing Director (JMD) Balasore Alloys Limited (BAL), a part of Ispat Group of Companies and a leading manufacturer of Ferro Alloys said, "The demand of chromite has increased manifold and the short supply from South-Africa has shot up its prices. This predicts positive trends for Orissa, as we have huge chromite mines. The products here are also in good demand globally for its high quality."

The supply shortage is mainly attributed to the booming stainless steel industry, which consumes more than 90 percent of the world's Ferro-chrome supply. Prices have also soared, with non-metallurgical chromite consumers compelled to match metal prices to ensure supply.

South Africa accounts for about 50 percent of global chromite Production. Following it are India and Kazakhstan which account for about 20 percent and 15 percent, respectively. Demand for chromite and ferrochrome is expected to remain strong mainly due to the continued growth of China's stainless steel industry. As the world production of stainless steel in 2008 is anticipated to recover with an increase, and therefore, the demand for Ferro-chrome is estimated to a scale of over eight million tones per annum. The State has around ten Ferro-alloys industries, including the largest producer of Ferro-chrome in the country - Indian Metals and Ferro Alloys (IMFA), Balasore Alloys Limited (BAL), Ferro Alloys Corporation (Facor), a state-run plant of Industrial Development Corporation (IDCO) and Rohit Ferro-Tech.

"Though South Africa had endeavored to produce Ferro-chrome at their full capacity last year but the quantities stocked by both consumers and producers had move to lower levels. As South Africa has had a shortage of power about five percent and suspension of electricity supply is occurring frequently, the global supply of Ferro-chrome is thought to be short," Jena of BAL clarified. The problem on supply of electric power is unavoidable to put a substantial impact on the supply situation of Ferro-chrome in the world for 2008. According to an estimation by a major producer, the world demand for Ferro-chrome this year is anticipated to come to 8.30 million tonnes.

Jena, chairman of Confederation of Indian Industries (CII), Balasore zonal council, also scotched the rumours of any market slowdown in Asia following the rise in prices of Ferro-chrome in Asian market, "Surging demand for ferrochrome used in making ferroalloy, which in turn is used in making stainless steel, has led to a shortage of chromite. Such supply condition is driving up prices of chrome ore," he said.

According to reports, high carbon metals has risen to $1.70 - 1.90 per lb recently compared with $1.60-1.70 previously on high chrome ore prices, the rising cost of coke and tight supply. Similarly, low-carbon material basis 0.10 carbon average rose to $2.35-2.65 compared with $2.35-2.55 previously, while 0.06 carbon max ferro-chrome rose to $2.40-2.70 compared with $2.40-2.60 previously.

"The demand of Ferro-chrome from China will increase by 200,000 tonnes per annum compared with previous year. The demand has in fact put a substantial impact of supply and demand of Ferro-chrome in the world," Jena pointed out. "The tendency is already appearing on the market and we have started noticing the benefits. The global chromites consumers from Japan and European countries are in constant touch with us and they have shown interest to procure our products regularly," he added.


Right now the global stainless steel market, which stands at 20 million tonnes per annum, is growing over + 4.5 per cent per annum. Out of the current annual production of approximately five million tonnes of Ferro-chrome, stainless steel consumes more than 4.5 million tones. The balance is consumed by specialty steel.

In China, the world's largest developing market, consumption is expected to go up to 4 million tonnes. With the availability of stainless steel scrap limited in the short and medium term, and with increasing stainless steel production, the consumption of Ferro-chrome is expected to go up by a significant extent.

Unlike steel, which is a value-destroying business globally, the chrome business is a value-creating one. As stainless steel consumption is linked to lifestyle development across geographical regions, consumption potential is on the rise in developing countries thereby creating opportunities for the countries which are keen on producing more and more Ferro-chrome in the years to come.