SteelMint Engage Webinar: India's Ferro molybdenum market trends, trade dynamics and future prospects

Ferro molybdenum market dynamics was one of the topics of discussion during the SteelMint Engage webinar series, which took place from 6-8 December 2023. Mr. Udayan Gutgutia, Executive Director of Team Ferro Alloys Pvt Limited, and Mr. Parvesh Garg, the Senior Vice President of Essel Mining & Industries Limited, Noble Ferro Alloy Division, Vapi, were kind enough to share their market insights with us.

Key discussions in the session

India's ferro molybdenum production to grow in FY25 on lower imports, rising stainless steel output: According to Mr. Garg, 5% import duty levied on ferro molybdenum imports from South Korea will create equal opportunities and help to increase domestic production. However, any major impact is yet to be seen and he's expecting a rise in production in the upcoming months. Ferro molybdenum demand will also rise as a result of the government's stainless steel policy, which is scheduled to be introduced in early 2024.

As per Mr. Gutgutia, ferro molybdenum demand will rise in India as a result of the country's growing need for special steel. In reference to the manufacturing process, he mentioned that the alumino thermite process is now being used. No other process is being used as there may be variations in molybdenum content. There might be slight changes in current process but the technology is expected to remain same for next 5-10 years. Additionally, he stated that currently around 20 plants are producing material with enough capacity.

Future trends in India's ferro molybdenum consumption: According to Mr. Gutgutia, India consumes 1,200-1,300 t of ferro molybdenum every month. He is confident that demand will rise in the upcoming years and expects a 7-8% growth in the next year.

The government also intends to manufacture stainless steel train compartments, which will further contribute to the increase in demand. The defense sector mostly purchases material to manufacture weapons and ammunition.

Oil and natural gas processing facilities, chemical factories, and other sources account for around 10% of the total demand.

Producers' hope for duty removal on molybdenum oxide and shipment challenges: Imports of molybdenum oxide has been consistent at around 600-700/t month for last 4-5 years. With the recent implementation of duty charges on ferro molybdenum from South Korea, producers are also hoping for removal of import duty on molybdenum oxide. This would help them to export material and to be more competitive in export market.

Additionally, there is no geopolitical influence on the imports, just general shipment and vessel issues occur sometimes causing delays.

Exploring the dynamics of price fluctuations in ferro molybdenum: The cost of raw materials, particularly aluminum and ferro silicon, is a major element influencing the costs in addition to import duty charges. Other factors impacting prices are supply of the material, shipment problems along with domestic and global demand. They also added that market sometimes becomes more volatile and fluctuations of around 10-50 cents is observed in a day. Furthermore, there isn't much of a difference between domestic and global prices. Different grades of ferro molybdenum are also produced based on demand.