India's imposition of a 30% chrome ore export duty
will further restrain overseas sales, even if domestic
demand is the key inhibiting factor, according to market
"Chrome ore exports will only decline further with the 30%
export duty in place. The duty was at $60 per tonne, but now it
will be about $80 per tonne at current prices," said Sunir
Khurana, director marketing of state-owned trading company
Minerals & Metals Trading Corp (MMTC), which is the conduit
for all India's chrome ore and concentrate exports.
Ferro-alloy producers in India told Metal Bulletin last week
that the strong domestic market was a more significant factor in reducing
than export duties.
India's efforts to establish itself as a major steel producing
nation are reflected in its policy towards chrome ore, the raw
material for the production of ferro-chrome, which is used in
every grade of stainless steel.
The government has imposed successive hikes in export duty over
the past five years, in moves that are being discussed in South
Africa, where there are controversial moves to impose a $100-per-tonne
New Delhi first imposed an export duty on chrome ore and
concentrates in February 2007, at a rate of Rs2,000 ($40) per
tonne. The duty was raised to Rs3,000 per tonne in February
In March 2012, the Indian government moved to an ad valorem
tariff of 30%, meaning that the export duty was imposed at a
rate of 30% of the value of the chrome ore or concentrate sold.
"India has a yearly ceiling of 350,000 tonnes; that's the
maximum amount of chrome ore that can be exported out of the
country during the year. But MMTC has not exported more than
40,000 tonnes this financial year," Khurana said.
"And the major portion of chrome ore exports has been
concentrate, which in its present form is not usable in Indian
industry," Khurana said.
Chrome ore and concentrate exports in the financial year ended
March 2009 stood at 377,000 tonnes, of which 41,000 tonnes was
ore and the remaining 336,000 tonnes was concentrate.
For the year ended March 2010, total exports rose to 585,000
tonnes (93,000 tonnes of ore; 492,000 tonnes of concentrate).
For the year ended March 2011, exports dropped to 527,000
tonnes (35,000 tonnes of ore; 492,000 tonnes of concentrate).
For the year ended March 2012, the figures for concentrate
exports stood at 409,000 tonnes, with ore exports expected to
be insignificant, though the exact data is not yet
Industry officials maintain that the figure for chrome ore
exports for the year ended March 2012 could come in at about
40,000 tonnes, but market participants are dubious.
Indian ferro-chrome exports also subdued
According to data from the Indian Ferro Alloy
Producers Assn (Ifapa), low levels of chrome ore exports have
been accompanied by falling levels of ferro-chrome exports.
Ferro-chrome exports in the year to March 2011 fell to 135,308
tonnes, from 466,219 tonnes in the year to March 2010.
Exports of ferro-chrome in the year to March 2009 had been
The figure for the year to March 2012 is expected to be higher
than the 2011 level, however.
India has a ferro-chrome smelting capacity of over 1 million
tpy, which has been growing by about 5% annually, the
Domestic demand for ferro-chrome in India is tied to the
expansion of the domestic steel industry, but the increase in
demand from overseas markets will also fuel growth, according
"As exports increase, domestic production of ferro-chrome will
also increase. The Asian market will fuel most of these
exports," Ifapa secretary-general TS Sundereshan said.
In the year ended March 2009, India's ferro-chrome production
stood at 790,000 tonnes. It rose to 891,000 tonnes in the year
ended March 2010, and 1.03 million tonnes in the year ended
Statistics for ferro-chrome production in the financial year
ended March 2012 have not been finalised, but output is
expected to surpass 2011's growth, Sundereshan said.