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Fimi Paper Manganese Alloy Industry In India Gokarn

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Presentation made on the manganese ferro alloy industry in India and dwells on the opportunities for the industry and key success factors for the industry.

Presentation made on the manganese ferro alloy industry in India and dwells on the opportunities for the industry and key success factors for the industry.

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Fimi Paper Manganese Alloy Industry In India   Gokarn Fimi Paper Manganese Alloy Industry In India Gokarn Presentation Transcript

  • Manganese Alloy Industry in India - Opportunities and Challenges Prabhash Gokarn Tata Steel, Kolkata Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Disclaimer The presentation is an amalgamation of author’s own views and thoughts. Tata Steel does not necessarily subscribe to the views and thoughts expressed in the presentation and should not be held responsible for the same. Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Presentation Outline A. Manganese Market Flow B. Demand Drivers C. Manganese Alloy Industry D. Decreasing Global Presence of China E. Opportunity For Indian Manganese Alloy Industry F. Key Success Factors for the Indian Manganese Alloy Industry Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • A. Manganese Market Flow Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 1. Manganese Market Flow Manganese ore 90% 10% 10% Batteries 6% Feedstock for Others 15% Ferroalloys 85% Chemical 4% Slag Ferroalloys 90% 10% Crude steel Others 35% 35% 56% 56% 9% HC FeMn SiMn Refined FeMn 70% Foundry 85% Integrated 25% Integrated 70% Integrated 30% 15% Mini- Mini-mills 75% Mini- Mini-mills 30% Speciality steel Welding Carbon Steel – Flat Stainless steel Products Carbon Steel – 200 S Cr-Mn Cr- Long Products High Strength Low Stainless Steel Alloy steel Source : Roskill Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 2. Manganese Uses Steelmaking  Strong sulphide former  Reduces undesirable amount of sulphur and oxygen in steel  Deoxidant  Improves the response of steel to quenching  Weak carbide former  Enhances mechanical properties of steel by increasing hardenability rate  Alloying element 90% Carbon Construction Stainless Steel High Strength Stainless Steel Hadfield Mn content Steel Steel (other series) Low Alloy Steel (series 200) Steel 0.5% 1.0% 1.0% 1.5% 12% 13% Non- Non-ferrous alloys  Deoxidant  Enhances corrosion resistance of Al alloys  Alloying element  Improves copper alloys castability and strength  Can replace part of the Nickel in Ni-Al alloys Ni- Other uses 10%  Depolarizer  Used in dry-cell batteries in the manganese dioxide form dry-  Bactericidal  Used in purifying drinking water, treating waste water and odour control  Fungicidal  Used for controlling crop and cereal diseases Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 3. Manganese Ferro Alloys In Steel Making Ferroalloys are produced by reducing metal Coke Flux Ore oxides with a reductant such as coke or coal, coal, ususlly in an Electric Arc Furnace. Furnace Low ash metallurgical coke is the preferred FeMn, FeMn, SiMn Production Process reductant. reductant. Electric power is used in the smelting process and is another important element of cost. Crusher Alloy casting Unit consumption per HC FeMn SiMn tonne of alloy HC FeMn Ref FeMn SiMn 3.34 kg 0.93 kg 5.44 kg Energy (kWhrs) (kWhrs) 2,600 4,200 FeMn & Refined FeMn SiMn used as a deoxidizer & Ore1 (tonne) tonne) 2.3 2.2 used as an alloying additive to Carbon & Cr- Cr- alloying additive Slag Mn Stainless Steel to Carbon Steel Coke1 (tonne) tonne) 0.6 0.5 High MnO Slag 1 Manganese ore of 44% Mn, Mn, produced in Avg 9.71 kg of Manganese making FeMn Alloys used per MT Steel used in making SiMn Source : Roskill Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • B. Manganese Demand Drivers Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 4. Demand Driver – Steel Production (1) Global Steel Production Index : Peak Scaled to 100 Global Manganese Alloy Production closely related to Steel Production In the long run, Mn alloy demand should grow higher than Steel demand due to higher growth of “Mn intensive steels” (e.g. HSLA, 200S SS, alloy steel) (e. 200S Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 4. Demand Driver – Steel Production (2) Apparent steel demand 2009 – 2010 in mill MT, (Y/Y % chg) Effective crude CIS steel capacity in -31% 8% 2008 NAFTA EU - 27 -33% 12% -36% 17% China +19% +5% 181 137 122 145 2008 2009 e 2010 f China 250 158 12% -5% India +8% 677 C & S America Rest of Asia Rest of Asia 10% -24% 14% -24% 70 62 268 Apparent Steel Demand in 2010 : growth in all regions after slowdown High Growth in China & India : significant Mn Alloy market opportunity Source: WSA, SRO_Oct09 Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 4. Demand Driver – Steel Production (3) India China , at “j” curve around 2000, likely to show tapering growth (2012-15). (2012- India has reached the “j” curve, a will grow at double digits (2012-15). (2012- India & China will remain high growth markets for Mn Alloys Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • C. Manganese Alloy Industry Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 4. Global Manganese Alloy Industry World’s largest manganese alloys producers Share in the Capacity, Company Country world `000 mt market USA, Romania, Poland, Georgia, Privat Group 2,556 20% Ukraine, Russia Eramet USA, France, Italy, China, Norway 1,130 9% BHP Billiton Australia, South Africa 900 7% Vale (CVRD) Brazil, Norway, France 620 5% Nippon Japan, China 483 4% Denko Tinfos Norway 420 3% Highly consolidated, with 6 players controlling almost 50% of total production Source: Metal Expert, CY 2009 Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 5. Indian Manganese Alloy Industry NBFA, 77 Shyam, 70 MEL, 68 Hira, 65 Srinivasa, 62 Others, 792 Sharda, 60 Tata, 22 Highly fragmented, top 7 players contribute to just ~30% of total production. ~ 70 players in Mn alloy business : large swing capacities. 150 Furnace with size range from 4 MVA to 33 MVA Almost 15-20% of the idle capacity unlikely to revive. 15- Price dependent on local demand-supply but a strong correlation with world trends demand- Source: Metal Expert Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 6. Indian Manganese Alloy Production 1,200 In ‘000 MT 995 845* 859 1,000 738 800 565 467 600 405 380 378 371 281 256 400 251 232 200 0 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2010-10 * Global recession HC Ferro Manganese Silico Manganese Production of Ferro Manganese has grown @ CAGR of 10% Production of Silico Manganese has grown @ CAGR of 17% Around 25% -30% is exported – is there a potential to increase this ? Source : IFAPA Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • D. Decreasing Chinese Presence Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 7. Chinese Manganese Alloy Industry China is the world’s largest Mn Ore producer by volume and by Mn Content producing 35% of the world’s total production. China has traditionally been a large exporter of Mn Alloys. The Change In 2009 : Mn Alloy Supply (World, without China) China became a net importer of Mn alloys for the first time in August 2009. China has become a net importer of SiMn, SiMn, ironically, in past years SiMn was the Mn alloy commodity that China exported the highest volume of. China continued to export more FeMn than it imported, (both Ref FeMn and HC FeMn). FeMn). CY 2008 Source : ERAMET, Metals Expert Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 7. Decreasing Competitiveness of China Power Tariff Increases Apart from the increased (6.25-7.5 c/kWh) 6.25- c/kWh) internal demand for Mn Alloys Regional & Seasonal Increased due to the rapid increase in Power Shortages Environmental steel production, which is North in Winter, Decreased Costs limiting Chinese exports, East/South in Summer Competitiveness Decreased Chinese of China in Mn Competitiveness has resulted Alloys in sharp reduction in bulk Mn Cost Increases : Freight, Increased Proportion of alloy exports from China Labour & Regulatory Imported Mn Ore (specially SiMn) SiMn) Costs Source : ERAMET, Metals Expert Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 8. Chinese Manganese Alloy Exports China has practically retreated from the export market due to high internal demand & decreased competitiveness in alloy making. making. 93% drop This presents an opportunity for India to consolidate its position as a Ferro Alloy exporter. Source : ERAMET, Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • E. Opportunity for India Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 9. Opportunity For India ? Mn Alloy Supply (World, without China) Mn Alloy Supply (World, without China) 2008 2010 Opportunity for India to : a) Replace China in the international Silico Manganese trade. b) Explore market opportunities in Manganese Alloys in China. This is apart from the opportunity presented by the steel growth in India Source : ERAMET, Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 10. 10. Advantage India * Large Capacity for Ferro Alloys Ability to * Industry currently operating at 60% of rated capacity immediately * New capacities coming up. Capacities coming up near ports scale up (Vizag, Haldia). Location near •Freight advantage in markets such as China, Korea & Japan high growth compared to Ukraine or South Africa regions • No seasonal effects •Short sailing time, freight advantage * Domestically sourced LG & MG Mn Ore available for blending with imported HG Mn Ore. Higher indigenous ore Cost Advantage availability compared to Chinese producers. over China * Comparable power, labour & inland freight costs to China. Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • F. Key Success Factors Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 10. 10. Key Success Factors For Indian Ferro Alloy Industry(1) Action Required / Changes Taking Key Issues Description Place * India has limited availability of * Continue to allow free import of Availability of Medium to Low Grade Mn Ores HG Manganese Ore High Grade Mn * Indigenous Manganese Ore * Indian Ore, sweetened with HG Ore grade & quantity better than Mn Ore suitable for SiMn with China production. * Import of low ash coking coal for Coking Coal & Ferro Alloy & BF Coke making in * Indian coal has high ash LAM Coke India * Exposure to availability & availability & * Blending indigenous cokes with price of LAM coke from China cost imported LAM coke for economic considerations * Indian average power tariff at * Power Sector reforms in place - Power similar level to China. allowing for Captive Power Plants & Availability & * Power shortages in summer in Power Wheeling. Power Cost Eastern India (hub of Ferro Alloy * Increase grid power generation. production) Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • 10. 10. Key Success Factors For Indian Ferro Alloy Industry(2) Action Required / Changes Taking Key Issues Description Place * Consolidation taking place with •Furnaces sizes start from 4MVA significant capacity expansion by Small capacities, * Almost 15%-20% capacity key players. inefficient unlikely to revive. * Increasingly, capacities with operations •Global furnaces moving to Captive Power Plants, Coal and ore higher sizes. linkages. * Inadequate roads, railway * Encourage FDI for rapid Infrastructural network capacity & ports for infrastructure development; Special Bottlenecks handling large scale ore imports Economic Zones & ferro alloy exports * Special Freight Corridors Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Can We Do It ? Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Backups Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Vol.42, No. 9964 THE TEX REPORT Wednesday, Wednesday, May 12, 2010 Cost To Produce Silico-Manganese In China Moves To Rise By US$100 / Ton = Silico- Owing To A Rise Of 10% For Price Of Manganese Ore To Be Imported By China In consequence of that major manganese mines have risen their price of manganese ore for shipment to China in June of 2010 by 10% compared to that for shipment in May, the cost to produce manganese ferro-alloys in China is ferro- thought to be inevitable to increase. It seems to be certain that the cost to produce silico- silico-manganese in China will rise by more than US$100 per ton. This increase of the production cost is anticipated to put an actual impact on negotiations to export Chinese silico-manganese for shipments in July - August. silico- The price of manganese ore for China has already risen by 4.7% for May shipment and, by adding a further rise for June shipment, the ore price for China has risen by more than 15% in total for shipments in the two months of May and June. The June. direct cost to produce silico-manganese at plants in China is presumed to total to silico- US$1,407 per metric ton, comprising three main factors of manganese ore as raw ton, material, coke as a reducing agent and electricity fee. The price of coke in domestic market of China is CNY1,950 - 1,980 per ton, having remained unchanged without a substantial movement. movement. Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • Also, electricity fee in China has risen by 5% from November of 2009 ( having resulted in new fee of CNY0.52 ( = 7.6 US-Cents ) per 1 KWH on average as the CNY0 US- whole country of China ) and, accordingly, this rise of electricity fee has put an impact on the cost for production of silico-manganese in China. silico- China. Incidentally, preferential fees of electricity applied to west-south and west-north west- west- districts of China were abolished from the beginning of 2010 and this abolishment has caused to increase the production cost in these districts. districts. While price of Chinese silico-manganese for export has risen from April, in view silico- of an instability of the foreign exchange caused by a crisis of the financial market in Greece, the price of Chinese silico-manganese to import into Japan has had a silico- hesitation. hesitation. Because of high prices of raw materials, a possibility to reduce price of Chinese silico- silico-manganese for Japan is unlikely to arise but an atmosphere to rise price of Chinese product for export has been not felt.felt. Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010
  • The negotiations with electric furnace mills in Japan on Yen price of silico- silico- manganese for shipments in July – September quarter will be taken place in due course of time and, therefore, the trading companies concerned have taken an attitude to watch carefully about further movements of the market. market. By taking into account of the clear factors to raise the production cost, Chinese shippers have targeted to export silico-manganese at a high price of US$1,700 silico- US$ per metric ton CIF Japan but Indian silico-manganese is now being offered at silico- US$ US$1,580 - 1,630 per metric ton CIF Japan on a center of US$1,600 CIF and, US$ accordingly, a high price of Chinese silico-manganese as mentioned above is silico- thought to be difficult to work on the market in Japan. Japan. It was informed that major manganese mines have aimed to rise price of medium grade lumpy manganese ore (with Mn 44% ) for China to a level of US$10 per Mn 44% US$ 1% CIF in the course of 2010. Therefore, there is a view in themarket that prices 2010. of manganese ores in the second half of 2010 will still maintain a firm tone. tone. Mn- Mn-Cr Ores & Ferroalloys Buyer/Seller Interface Puducherry, 13- Puducherry, 13-14 May 2010