Indian downstream chrome ore processors, largely concentrated in the eastern Indian state of Odisha, have urged a reduction in the floor price of chrome ore at auctions held by Odisha Mining Corporation (OMC) in view of the falling price of ferrochrome, SteelOrbis learned from industry circles on Monday, April 12.
The Kalinganagar Industries Association (KNIA), a representative body of mineral processors and ferrochrome producers, in a communication to OMC said that the latter was fixing an arbitrary and high floor price for chrome ore at auctions held by it despite falling off-take of chrome ore and falling prices of ferrochrome.
According to the association, chrome ore offtake has fallen sharply owing to the high floor price and only 7.5 percent of the total volume of 32,600 mt of chrome ore on offer at an auction held on March 15 was purchased. In the previous auction held on February 10, only 7.3 percent of the total of 32,700 mt of chrome ore put up for bidding was purchased.
The association in its communication pointed out that ferrochrome prices have fallen to INR 92,000/mt ($1243/mt) from INR 102,500/mt ($1385/mt) since early this year, but OMC has continued to link the floor price for chrome ore to higher ferrochrome prices.
Urging OMC to revise its formula for linking the floor price to ferrochrome prices, the association pointed out that ferrochrome producers like Rohit Ferro Tech have stopped operations owing to the high prices of chrome ore, while the ferrochrome units of Jindal Stainless and Visa Steel are facing viability issues from high chromite prices.