A significant 200% surge in manganese ore prices in the last 3-4 months has sent alarm bells ringing across the domestic ferro alloys sector. The latter is a key input for steel makers but 70% of the industry has become import dependent as few new mines have come up in the recent past. The development has worried steel companies, too, since each tonne of steel contains about 6 kg of manganese alloys. To add to the worries, coke prices have also surged by 80% in same period. The proposed imposition of an anti-dumping duty of $25 tonne on coke is likely to aggravate the situation further.
However, in the face of soaring input costs, price of Ferro alloys has increased by only around 30%. This has led to a situation where a number of smaller Ferro alloys units have either close down or are on the verge of being shut down with fears of sizeable job losses of nearly a few lakhs. With an installed capacity of 3.5 million tonne, manganese alloys industry is currently operating at 70% capacity. While domestic sales are 1.5 million tonne, the exports amount to around one million tonne.