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Chrome Business  India – China    Yesterday, Today  & Tomorrow Presented at “Chromium 2009”  Conference of the Internation...
This presentation is an amalgamation of  authors’ own views and thoughts. Tata Steel or IFAPA do not necessarily subscribe...
Presentation outline <ul><li>Chrome Industry in India & China </li></ul><ul><li>India China Chrome Trade – the evolution <...
Chrome Industry – India & China
The Indian Chrome Industry <ul><li>Total reserves (incl Resources) of Chrome Ore - 213  Million MT  Proved -31 Million MT,...
Chromite mines in India
The Indian Chrome Industry  contd. <ul><li>Total Manufacturing capacity of Ferro chrome  876 MVA. 70% capacity is in the s...
NBFA, Dhenkanal FACOR, Garividi TBAPL,Raigarh Production Unit FACOR, Randia FAP, Bamnipal FeCr Production in India Rawmet ...
India –Stainless steel highlights <ul><li>Total production capacity 2 million MT. </li></ul><ul><li>Product mix- 75% Flat ...
Ambika Steel  Rathi Steel & Power  Rimjhim Steel Jindal Stainless Shah Alloys Chandan Steel Viraj Alloys  Mukand Ltd Panch...
China – Chrome Industry <ul><li>Chrome ore : </li></ul><ul><li>Small  reserve; deposits both in Podiform and Stratiform. O...
China – Chrome Industry  contd <ul><li>Ferro chrome : </li></ul><ul><li>Extremely fragmented production base with existenc...
Production bases of Chrome Ore and High Carbon Ferro Chrome in China Chrome Ore Chrome Ore Ferro Chrome
China –Stainless steel Industry highlights <ul><li>Total production capacity 13 million MT; one-third of global capacity <...
<ul><li>Tsingshan (Qingshan) Iron & Steel Co. </li></ul><ul><li>Baosteel </li></ul><ul><li>Youyi Special Steel </li></ul><...
India China Chrome Trade – The Evolution
Chrome Equation in China
Chrome Unit Balance -  China & India Trade 2000 2004 2008 ‘ 000 MTPA ‘ 000 MTPA Domestic  Import Domestic  Import Domestic...
Historical trade flow    and    Key Observations
China’s dependence on India in Chrome Ore or Chrome Alloys China started  FeCr import  from India in  2004: 37,325 MT
EXPORTING COUNTRIES SA : 1st Oman: 3rd Turkey: 2nd India : 4th CHROME ORE: Import Trade Flow of China Import: 6.44 m MT in...
SA : 1st Kazak: 2nd India : 3rd High Carbon Ferro Chrome/Charge Chrome:  Import Trade Flow of China EXPORTING COUNTRIES Im...
China :  1st Japan: 2nd Cr Conc Export: 0.63 m MT in 2008 Export Trade Flow of India: Chrome Concentrate
Europe:  4th FeCr Export: 0.45 m MT in 2008 China  3 rd Korea  : 1 st Japan: 2 nd Export Trade Flow of India: Ferro Chrome
China’s Import of Chrome Ore & Concentrate
India's Cr Ore/Concentrate Trade Balance
China’s Import of High Carbon Ferro /Charge Chrome
India's FeCr Trade Balance
Key Observations <ul><li>India’s spend share as supplier of Chrome Ore & Conc to China- 2005 : 32%, 2007 : 16%, 2009(till ...
Analysis of market dynamics
<ul><li>GDP growth & Domestic demand  </li></ul><ul><li>Per capita SS consumption </li></ul><ul><li>SS product mix </li></...
Factors affecting  Sino-India Chrome Trade  <ul><li>Indian Export of Chrome Ore & Concentrate- </li></ul><ul><li>Govt quot...
Comparison of China's imported cargo price Chrome Ore Ferro Chrome
China’s preference for Indian Chrome Ore & Conc   <ul><li>Quality –  </li></ul><ul><li>- As stand alone or as a good blend...
The Situation – An Analytical Look <ul><li>Only certain volume of Chrome Ore & Concentrate can be imported in China at eco...
Future scenario and Conclusion
Forecast of SS production in China Govt stimulus package started in end 2008 is in full force.
Projected SS demand  in India Figs in ‘000 MT Source ISSDA Year Flat Long Total 2005 1001 153 1154 2010 1685 373 2058 2015...
Growth of Ferro Chrome capacity of India and China
Future issues to ponder <ul><li>Scenario change in Chrome supply to China for origins other than India. </li></ul><ul><li>...
Scenario Shift in Chrome Alloys  : India - China
Conclusions  <ul><li>China will remain the preferred export destination for Indian producers of Chrome Ore & Ferro Chrome ...
Conclusions  contd.. <ul><li>Rapid increase in Ferro chrome demand in China and India will boost Ferro Chrome production i...
Yin & Yang China & India Chrome Equation
The End
Thank You
<ul><li>Authors: </li></ul><ul><li>Mr T S Sundaresan </li></ul><ul><li>Secretary General </li></ul><ul><li>IFAPA </li></ul...
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Presentation At Icda Chromium 2009 Ppt

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Presentation titled &quot;Chrome Business India – China Yesterday, Today and Tomorrow&quot; seeks to explore the changing relationship between two Asian giants in face of a over 25% growth in SS production in China which propelled it to the #1 producer of stainless steel in the world and pressures posed by India\'s own impressive double digit growth in SS Production.

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  1. 1. Chrome Business India – China Yesterday, Today & Tomorrow Presented at “Chromium 2009” Conference of the International Chromium Development Institute
  2. 2. This presentation is an amalgamation of authors’ own views and thoughts. Tata Steel or IFAPA do not necessarily subscribe to the views and thoughts expressed in the presentation and should not be held responsible for the same.
  3. 3. Presentation outline <ul><li>Chrome Industry in India & China </li></ul><ul><li>India China Chrome Trade – the evolution </li></ul><ul><li>Historical trade flow and Key Observations </li></ul><ul><li>Analysis of market dynamics </li></ul><ul><li>Future scenario and Conclusion </li></ul>
  4. 4. Chrome Industry – India & China
  5. 5. The Indian Chrome Industry <ul><li>Total reserves (incl Resources) of Chrome Ore - 213 Million MT Proved -31 Million MT, Probable -35 Million MT, Recoverable- 66 Million MT </li></ul><ul><li>98% occurrence is in the state of Orissa. </li></ul><ul><li>Chrome Ore is Stratiform in nature and mining is opencast. Output mainly Metallurgical ; Chemical and Refractory grades are also produced. </li></ul><ul><li>3rd biggest producer of Chrome ore in the world. </li></ul><ul><li>Two main producers -Tata Steel & Orissa Mining Corporation. </li></ul><ul><li>Chrome Ore export is canalised with system of quantity allocation and periodic floor price fixation by Govt. Current export duty – Rs 3000/MT (USD 65 at Rs 46-1 USD exchange rate). </li></ul>
  6. 6. Chromite mines in India
  7. 7. The Indian Chrome Industry contd. <ul><li>Total Manufacturing capacity of Ferro chrome 876 MVA. 70% capacity is in the state of Orissa . </li></ul><ul><li>Highly fragmented production base with existence of high level of idle capacity and swing production. Only a few producers are integrated with captive production of mines. </li></ul><ul><li>High power cost adversely affect cost of production. Imported Chinese coke is preferred reductant. </li></ul>
  8. 8. NBFA, Dhenkanal FACOR, Garividi TBAPL,Raigarh Production Unit FACOR, Randia FAP, Bamnipal FeCr Production in India Rawmet Jindal Stainless Sri Vasavi Steel Rohit Ferro Tech Balasore Alloys IMFA Visa Steel, KalingaNagar
  9. 9. India –Stainless steel highlights <ul><li>Total production capacity 2 million MT. </li></ul><ul><li>Product mix- 75% Flat and balance Long. More than 70% output in 200 series </li></ul><ul><li>Majority from Private enterprises which mainly produce Flat products. 5% production from Govt enterprises who are mostly in Long products </li></ul><ul><li>In 2009 SS production expected 1.7 mill MT. Export 0.5 million MT. </li></ul>
  10. 10. Ambika Steel Rathi Steel & Power Rimjhim Steel Jindal Stainless Shah Alloys Chandan Steel Viraj Alloys Mukand Ltd Panchmahal Steel Stainless Steel Production in India
  11. 11. China – Chrome Industry <ul><li>Chrome ore : </li></ul><ul><li>Small reserve; deposits both in Podiform and Stratiform. Output Metallurgical and Refractory. </li></ul><ul><li>Significant usage in Chemical and Refractory application. </li></ul><ul><li>2008 production 300,000 MT. Output insufficient to meet huge domestic demand. </li></ul>
  12. 12. China – Chrome Industry contd <ul><li>Ferro chrome : </li></ul><ul><li>Extremely fragmented production base with existence of idle capacity. Industry plagued with inefficient energy consumption, high power cost and over-reliance on imported ore. </li></ul><ul><li>Net importer of High Carbon Ferro Chrome from 2002 . Import volume went for quantum jump in last two years. </li></ul><ul><li>Significant production of Silico Chrome and Low Carbon Ferro Chrome. </li></ul>
  13. 13. Production bases of Chrome Ore and High Carbon Ferro Chrome in China Chrome Ore Chrome Ore Ferro Chrome
  14. 14. China –Stainless steel Industry highlights <ul><li>Total production capacity 13 million MT; one-third of global capacity </li></ul><ul><li>7 million MT from State Owned Joint enterprises which mainly produce Flat products </li></ul><ul><li>6 million MT from private enterprises mostly in Long products </li></ul><ul><li>In 2009 SS production expected 8 mill MT with capacity utilisation of 62%. </li></ul><ul><li>2009H1- </li></ul><ul><li>Production -4.06 million MT </li></ul><ul><li>Import - 0.59 million MT 11% low YOY </li></ul><ul><li>Export -0.25 million MT 54% low YOY </li></ul>
  15. 15. <ul><li>Tsingshan (Qingshan) Iron & Steel Co. </li></ul><ul><li>Baosteel </li></ul><ul><li>Youyi Special Steel </li></ul><ul><li>Rouyi Steel </li></ul><ul><li>Huaye steel </li></ul><ul><li>Hangzhou Iron & Steel </li></ul><ul><li>Qingyuan Tsingshan (Qingshan)SS </li></ul><ul><li>LISCO </li></ul><ul><li>Huaye </li></ul><ul><li>Tsingshan (Qingshan) Jinhui SS </li></ul><ul><li>Henan Wanhe </li></ul><ul><li>Dongbei Gp – a) Dalian Iron & Steel b) Fushun Special Steel c) Beiman Special Steel </li></ul><ul><li>Wuhang SS </li></ul><ul><li>TISCO </li></ul><ul><li>Shanxi Yida </li></ul><ul><li>ZPSS </li></ul><ul><li>Nantong </li></ul>Huaye Steel JISCO Taishan SouthEast Special Steel <ul><li>Juxing </li></ul><ul><li>Jiangpu </li></ul>SS Mills
  16. 16. India China Chrome Trade – The Evolution
  17. 17. Chrome Equation in China
  18. 18. Chrome Unit Balance - China & India Trade 2000 2004 2008 ‘ 000 MTPA ‘ 000 MTPA Domestic Import Domestic Import Domestic Import ‘ 000 MTPA Cr Ore FeCr Cr Ore FeCr Cr Ore FeCr 570 2360 6940 SS Prodn 114 448 1249 Cr Units Net Exporter 171 582 156 277 667 0 22 55 India’s Contribution Cr Units 242 254 188 Cr Unit from FeCr
  19. 19. Historical trade flow and Key Observations
  20. 20. China’s dependence on India in Chrome Ore or Chrome Alloys China started FeCr import from India in 2004: 37,325 MT
  21. 21. EXPORTING COUNTRIES SA : 1st Oman: 3rd Turkey: 2nd India : 4th CHROME ORE: Import Trade Flow of China Import: 6.44 m MT in 2008
  22. 22. SA : 1st Kazak: 2nd India : 3rd High Carbon Ferro Chrome/Charge Chrome: Import Trade Flow of China EXPORTING COUNTRIES Import: 1 m MT in 2008
  23. 23. China : 1st Japan: 2nd Cr Conc Export: 0.63 m MT in 2008 Export Trade Flow of India: Chrome Concentrate
  24. 24. Europe: 4th FeCr Export: 0.45 m MT in 2008 China 3 rd Korea : 1 st Japan: 2 nd Export Trade Flow of India: Ferro Chrome
  25. 25. China’s Import of Chrome Ore & Concentrate
  26. 26. India's Cr Ore/Concentrate Trade Balance
  27. 27. China’s Import of High Carbon Ferro /Charge Chrome
  28. 28. India's FeCr Trade Balance
  29. 29. Key Observations <ul><li>India’s spend share as supplier of Chrome Ore & Conc to China- 2005 : 32%, 2007 : 16%, 2009(till Sept): 7% </li></ul><ul><li>Absolute volume of India’s Chrome Ore & Conc export to China went for a gradual decrease over last four years. However China remained the main export destination. </li></ul><ul><li>Share of India’s Chrome Conc total export as part of India’s total production falling gradually </li></ul><ul><li>India’s spend share as supplier of Ferro Chrome to China- </li></ul><ul><li>2005 : 28% , 2007 : 14%, 2009(till Sept): 17% </li></ul><ul><li>Barring 2008, absolute volume of India’s Ferro Chrome export to China went for a gradual increase over last four years. </li></ul><ul><li>Share of India’s Ferro Chrome export to China as part of India’s total production increased to a level of 60%. </li></ul><ul><li>India’s import of Ferro Chrome from China which comprises mainly Low Carbon Ferro Chrome is marginal but having an increasing trend. </li></ul>
  30. 30. Analysis of market dynamics
  31. 31. <ul><li>GDP growth & Domestic demand </li></ul><ul><li>Per capita SS consumption </li></ul><ul><li>SS product mix </li></ul><ul><li>Usage of scrap </li></ul><ul><li>Labour Cost </li></ul><ul><li>Power Cost </li></ul>Factors affecting Sino-India Chrome Industry
  32. 32. Factors affecting Sino-India Chrome Trade <ul><li>Indian Export of Chrome Ore & Concentrate- </li></ul><ul><li>Govt quota allocation and Floor price </li></ul><ul><li>Correlation between Chrome Ore and Ferro Chrome import volume and price in China. </li></ul><ul><li>Indian and Chinese producers’ relative competitive strength of Cost of production of Ferro Chrome. </li></ul><ul><li>Nature of market and buying behaviour </li></ul>
  33. 33. Comparison of China's imported cargo price Chrome Ore Ferro Chrome
  34. 34. China’s preference for Indian Chrome Ore & Conc <ul><li>Quality – </li></ul><ul><li>- As stand alone or as a good blending grade for High Carbon Ferro Chrome </li></ul><ul><li>-Ultra high Cr2O3 and Cr:Fe cargo for Low Carbon Ferro chrome </li></ul><ul><li>- Ultra high Cr2O3 with Ultra Low Silica for Refractory end-use </li></ul><ul><li>- Low Alumina & SiO2 for Chrome Chemical </li></ul><ul><li>Short sailing time </li></ul><ul><li>No seasonal effect. </li></ul><ul><li>Time Zone advantage </li></ul>
  35. 35. The Situation – An Analytical Look <ul><li>Only certain volume of Chrome Ore & Concentrate can be imported in China at economical cost to sustain competitive smelting. </li></ul><ul><li>Simple economics prevails in China’s showing preference for Ferro Chrome between imported and domestic cargo. </li></ul><ul><li>Indian Chrome Ore shifts to domestic value adding route. </li></ul>
  36. 36. Future scenario and Conclusion
  37. 37. Forecast of SS production in China Govt stimulus package started in end 2008 is in full force.
  38. 38. Projected SS demand in India Figs in ‘000 MT Source ISSDA Year Flat Long Total 2005 1001 153 1154 2010 1685 373 2058 2015 3185 900 4085
  39. 39. Growth of Ferro Chrome capacity of India and China
  40. 40. Future issues to ponder <ul><li>Scenario change in Chrome supply to China for origins other than India. </li></ul><ul><li>Future offer of Indian Chrome Ore – Cost (Opencast to underground) and Product mix (High to Medium Grade) </li></ul><ul><li>Future competitiveness of Indian Ferro Chrome ( Relative advantage of Power Cost) </li></ul><ul><li>Backward integration by China SS mills and Ferro Chrome producers. </li></ul><ul><li>Forward integration by Indian Ferro Chrome producers </li></ul>
  41. 41. Scenario Shift in Chrome Alloys : India - China
  42. 42. Conclusions <ul><li>China will remain the preferred export destination for Indian producers of Chrome Ore & Ferro Chrome . </li></ul><ul><li>Survival matrix for Chinese endusers as well as value adding option of Indian producers will decide the fate of Indian Chrome Ore to be used for High Carbon Ferro Chrome production in China. </li></ul><ul><li>In other segments (Chemical, Low Carbon Ferro Chrome) Indian chrome ore / concentrate will be a preferred choice in China. </li></ul>
  43. 43. Conclusions contd.. <ul><li>Rapid increase in Ferro chrome demand in China and India will boost Ferro Chrome production in India in a big way. </li></ul><ul><li>Indian Ferro Chrome producers (mainly integrated ) going for Stainless Steel production will see India -China maturing from a supplier- customer relationship to twin movers of Stainless Steel in Asia. </li></ul>
  44. 44. Yin & Yang China & India Chrome Equation
  45. 45. The End
  46. 46. Thank You
  47. 47. <ul><li>Authors: </li></ul><ul><li>Mr T S Sundaresan </li></ul><ul><li>Secretary General </li></ul><ul><li>IFAPA </li></ul><ul><li>Mr Prabhash Gokarn </li></ul><ul><li>Head (Marketing & Business Development) </li></ul><ul><li>Ferro Alloys & Minerals Division, </li></ul><ul><li>Tata Steel </li></ul><ul><li>Mr Rajarshi Palit </li></ul><ul><li>Deputy General Manager, </li></ul><ul><li>Tata Steel Asia (Hong Kong) Ltd </li></ul><ul><li>Acknowledgments </li></ul><ul><li>Chrome Market Spotlight </li></ul><ul><li>CRU Monitor </li></ul><ul><li>Ryan’s Notes </li></ul><ul><li>Metal Bulletin Research </li></ul><ul><li>Tex Report </li></ul><ul><li>ICDA </li></ul><ul><li>Roskill </li></ul><ul><li>Marketing Research Group of Tata Steel </li></ul>
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