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Invited Paper for Metals & Minerals Review Ferroalloy Special January 2013 issue
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Prabhash Gokarn
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Prabhash Gokarn
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3.1 Exports from India : China is the worlds largest Manganese Ore producer by
volume and by Manganese content producing 35% of the worlds total production. China
has
traditionally
been
a
large
exporter
of
Manganese Alloys.
Since late 2009,
China has become
a net importer of
SiMn. Ironically, it
was China that in
the past exported
the highest volume
of SiMn. Also, the
steep increase in
the production of
stainless steel and
carbon steel in
China (Figure 7
and Figure 8) means it has become a significant market for ferroalloys, located at
Indias doorstep.
Prabhash Gokarn
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Chinas withdrawal from supplying bulk ferro alloys and instead importing them on a
large scale has led to a steep increase in Indian exports of ferro alloys. (Figure 9).
Prabhash Gokarn
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Prabhash Gokarn
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Prabhash Gokarn
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Prabhash Gokarn
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Prabhash Gokarn
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Prabhash Gokarn
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India, like China, is highly dependent on South Africa, Gabon, Australia and
Brazil for sourcing of Manganese ore; these four countries account for ~ 90% of
the imports in 2011.
Prabhash Gokarn
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However, coal being the predominant energy source(Figure 15), there is likely to
be an impending power crisis in this country due to thermal coal availability
issues, coal linkage issues; delay in startup of new coal mines and de-allocation
of coal blocks due to the Coal-gate scam. The rising cost of thermal coal
globally and restrictions imposed in Indonesia on thermal coal asset ownership
and preferential allocation agreements too have been affecting the growth of the
power sector.
Prabhash Gokarn
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3. Infrastructure Indian industry has had to grapple with inadequate and crumbling
infrastructure stretched and overburdened roadways, railways and ports - that
raises the cost of business. However we are seeing a rapid improvement in
infrastructure :
a. Roads - India plans to spend approximately US$70 Billion by 2013 to
modernize its roads. India has rebuilt over 18,300 kilometers of 4 or 6-lane
highways(including the 4-lane Golden Quadrilateral) inter-connecting
major manufacturing centers and ports. The country is adding ~11
kilometers of new highways daily, and it is likely that we would add about
600 kilometers of modern highway per month till 2014.
Prabhash Gokarn
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Prabhash Gokarn
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The shift in steel production from the developed nations to China has led to
China becoming the largest consumer (and in some cases producer) of
ferroalloys. Thus, till recently, China has been the dominant destination for
ferroalloys from India. With slowing Chinese steel growth and a healthy growth in
demand for ferroalloys domestically, it is likely that exports, currently almost 50%
of total production, will fall to a level of 30-35%(level attained during 2005-08) in
2013.
The two factors of concern are :
a) With reduction in export duties in China, the re-emergence of China as a large
exporter of ferroalloys may make it difficult for Indian ferroalloy players to
retain market share in a shrinking global market and
b) The domestic demand for ferroalloys, although growing, will not be able to
take up the slack if exports are hit.
This would mean that the bulk ferroalloy industry could see a period of de-growth
in the short term.
Prabhash Gokarn
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Prabhash Gokarn
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Si Silicon,
LG - low grade,
Cr Chrome,
MG medium grade,
Ch Charge
HG high grade,
US United States,
MT Metric Tons,
IPP Independent Power
Plant,
CPP -Captive Power Plant,
EU European Union,
Prabhash Gokarn
Distribution,
OMC Orissa Mining
Corporation,
SA South Africa
CIS Confederation of
Independent States,
Growth Rate,
FII foreign institutional
investment,
FDI foreign direct
investment
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