Industry & Economy
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Budget
Ferro alloy units not excited over duty increase on chrome ore
Amit Mitra
Mumbai, Feb. 29 Producers of ferro alloys, a vital input for the steel industry, are not too excited over the Rs 1,000 per tonne increase in export duty on chrome ore proposed in the Union Budget, which is aimed at discouraging export of the ore.
The Finance Minister, Mr P. Chidambaram, in his budget speech said, “in order to conserve chrome ore and make it available for value-added manufacture in India, I propose to increase the export duty from Rs 2,000 per tonne to Rs 3,000 per tonne.”
Chrome ore is utilised in production of ferro chrome, part of the family of ferro alloys that are used by the steel industry as de-oxidant and alloying agent. Chrome ore is actually used to make high carbon ferro chrome, which is a non-substitutable raw material for making of stainless steel.
Facing a shortage in domestic availability of chrome and manganese ores, the ferro alloy industry has been seeking a total ban on export of these ores, much the same way as the steel industry has been campaigning for a ban on export of iron ore. If not a ban, the industry has been seeking that the duty on export of these ore be at least hiked from the present Rs 2,000 a tonne to Rs 5,000 a tonne to discourage exports.
“A Rs 1,000 a tonne increase in export duty means that the export price will be up by $25 a tonne. Given that the export price is currently about $410 per tonne, the Chinese buyers of the ore will gladly absorb the price increase, in view of the shortage in availability of ore and its growing steel production. I do not think the (proposed) increase (in export duty) will have any impact on export of chrome ore,” Mr R.K. Saraf, Chairman of the Indian Ferro Alloys Producers Association (IFAPA) and Ferro Alloys Corporation of India (FACOR), told Business Line.
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