Economic Times reported that the domestic ferrochrome industry is expecting stainless steel capacity to double in the next 2 to 3 years. With Asia, particularly China, emerging as the hub of global stainless steel industry, Indian ferrochrome producers, who have been hit by indifferent growth in last 2 to 3 years, are gearing up to cater to growing demand for ferrochrome in the region.

The ferrochrome industry has remained virtually stagnant at 0.9 to 1 million tonne for the last 3 years. However, with new capacities planned in the stainless steel sector, ferrochrome companies may get a shot in the arm. Of late, better data coming out of China and depreciation of the rupee against the dollar has sent out positive signals for the industry. As a result, prices of ferrochrome have climbed up to touch INR 70,000 per tonne in the last 4 to 6 weeks.

Mr Subrakant Panda MD of Indian Metals & Ferro Alloys an integrated producer of ferrochrome said that "With domestic stainless steel capacity due to go up to 3 million tonne demand for ferrochrome is also slated to rise in the coming years. This is in sharp contrast to the situation in recent years, when domestic demand hardly picked up. The company, which currently exports 80% of its output, is also gearing up to cater to an increasing share of the market at home.

Over the next few years, IMFA could thus be looking at raising domestic sales at around 40% of its output. Analysts said that the strategy makes business sense. A metals sector analyst pointed out that "Price realisation at home is more or less in line with exports. Logistically too, domestic sales could be profitable."

Mr Panda was recently appointed president of International Chromium Development Association, the Paris based apex body. Incidentally, IMFA was one of the founding members of ICDA when it was formed in 1984 and Panda is only the third Indian to head the organisation in its nearly 3 decades of existence.

It comes at a time when China has emerged as a top player in ferrochrome, replacing the sector's traditional powerhouse, South Africa. ICDA, which is due to celebrate three decades of its existence in 2014, has thus opened an office in Beijing for the first time.

China has become the largest producer in the world surpassing South Africa despite not having its own chrome ore reserves. Mr Panda said that "In South Africa, the traditional stronghold with 80% of world chrome ore reserves, ferro alloys makers are facing few challenges due to the power shortage. However, its influence is unlikely to fade away. New capacities will be added but these will perhaps come up a t a higher cost." Nearly 9 million tonne of ferrochrome were produced globally last year.

Given its quality and grade, India is a niche player with almost a tenth of the global ferrochrome market with a production of almost one million tonne per annum. Last year, China produced 50% of the world's stainless steel.