India: Ferro Alloys Plants in Vizianagaram Given Permission to Operate

Indian Ferro Alloys industries have been listed under the essential commodities, meanwhile, they are dependent on the District Collectors for the permission for running the plants. Yesterday, on 15th April 2020, Andhra Pradesh issued a notice to permit 15 industries in Vizianagaram to resume operations under strict norms regarding Covid-19, following the MHA guidelines.

According to the producers in the Vizianagaram, few plants were already operating under lockdown, meanwhile, dispatches were continuously being done from all the plants. A Vizianagaram based Plant personnel shared that the dispatches for Exports and government tenders were continuously done, as the private sector remains shut, there is a lot of pending orders. In the meantime, there is a severe cash flow in the market, and most of the steel producers are low in inventory for Silico Manganese. Meanwhile, a few SEZ units are also permitted to operate, and they would start initially with less capacity and would increase gradually as the availability of labour increases.

One producer shared with SteelMint that, the local communities in the areas are resisting to come to work due to the panic created in the country amidst the increasing cases of Coronavirus. He also said that they have arranged for food and lodging facilities within the premises. The government has made it clear that the MHA guidelines need to be followed with utmost sincerity to ensure the safety of labourers.

Amidst everything, producers in the rest of India are willing to start the operations after 20th April 2020. The producers in the domestic market stated that they have a lot of pending orders still to fulfil post the production starts. Meanwhile, they also feel optimistic as the Manganese ore prices in the global market have increased quite significantly resulting in better export offers for Silico Manganese. Producers also stated that due to the increased Manganese ore prices in the global market, they expect the MOIL prices to increase, although they feel that once the market reopens the prices may fall back to normal from the heightened positions as the Steel market lacks the lustre.

A Durgapur based producer stated that as the Chinese producers are procuring high priced Manganese ore, it is bound that the Silico Manganese prices in the spot market of China will go up and hence will drive up the alloy prices in the export market.

One of the major producers of Manganese alloys in Raipur, who started their operations today, stated that they have initially started the operations with three furnaces and would increase gradually.

Future Outlook
Market participants are keener to know about the relief packages offered by the government in such an economic crisis. Meanwhile, MOIL prices would also be an important factor as most of the producers would be dependent MOIL for Manganese ore procurement, as buying from the overseas market is no more an option with the heightened prices.