India's production and exports of ferro alloys, the major ingredients of raw materials for steel making, are likely to decline by 25 per cent this year on poor demand from global consumer industries, according to experts.
The country produced about 2.36 million tonnes of ferro alloys last financial year, which is estimated to decline to 1.90 million tonnes this year.
The year 2008-09 has brought a mixed bag of fortune for the ferro alloy producers. While their order books were full in the first half of the financial year, the next six months, especially since November, saw orders plunging to "nil" on the back of a near-halt in shipments to the US, Europe, Korea and Japan -- the four destinations where India exports almost 80-85 per cent of its ferro alloy output. The halt was triggered by the global economic meltdown.
Surprisingly, the demand resumed slightly in February, which indicates the revival in steel and stainless steel productions and thereby, in global economy.
During the four months’ slackening period — between November and February —, nearly 30 per cent of ferro alloys producers in India halved their capacity from the normal production level of 70 per cent to 35 per cent. The period also saw about 20 per cent of the existing 150 furnaces shutting down their shops.
But, the slump-hit manufacturers are slowly resuming their operations, said T S Sundaresan, Secretary General of Indian Ferro Alloy Producers’ Association (IFAPA).
Source: Business Standard
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