The Hindu Business Line : Ferro chrome exporters see scope to garner larger pie of global market

Kolkata, March 26 The power situation in South Africa has provided Indian ferro chrome exporters with an opportunity to garner a larger share of the global market for ferro chrome. South Africa, which has 80 per cent of the world’s chrome ore reserves and accounts for 45-50 per cent of the global market for ferro chrome, has been facing the problem of inadequate availability of electricity.

With no “meaningful capacity” being added to the country’s power sector in the last 7-8 years, the power situation in South Africa has deteriorated. The problem has been compounded by an increase in the demand for power from both the industry and the household sectors, according to informed sources in the Indian ferro chrome industry.

Power- intensive

The sources said the ferro chrome industry was highly power-intensive and any abnormality in power supply adversely impacts it.

With power cuts being imposed on power-intensive industries in South Africa, consumers of ferro chrome globally were keen to diversify their ferro chrome sourcing base. “South Africa has always been regarded as a stable and reliable supplier of ferro chrome.

However, given the present power situation in South Africa, consumers of South African ferro chrome are now a little apprehensive on this score, especially as the next major power capacity there is likely to go on stream only by 2010-11. As such, large global buyers are looking to diversify their sourcing base,” the sources said.

They said spot prices of ferro chrome in the global market have gone up from $1.30 per pound of chrome content to $2 as of Monday.

They said the situation continues to remain tight and this has provided Indian ferro chrome producers with a “great opportunity” to garner a larger share of the global market for ferro chrome.

The global ferro chrome market has been pegged at 5.5 million tonnes. India produces 800,000 tonnes of ferro chrome annually. Of this, 4,50,000-5,00,000 tonnes are exported to countries in the Far East, Japan, Korea, China and Taiwan. A small quantity is also exported to the US and Europe.

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