The ferro alloy industry could see a brighter 2016-17 riding on the recent positive trend in the steel sector, said Surendra Keyal, a ferro alloys trader and member of the ferro alloys committee of the MCC Chamber of Commerce & Industry and Engineering Export Promotion Council.
The ferro alloy sector could see capacity utilisation rising to as high as 75%, he said. The weakening of the rupee vis-à-vis the US dollar and euro could be another factor but Keyal cautioned against the current volatile state of the European market as well.
As per Keyal, during the last three months, the ferro alloy industry has been rising as the steel sector is showing improvement.
The prices of silico manganese, ferro manganese and ferro silicon have increased in the last three months. The possibility of massive government investment in infrastructure could be one of the factors behind this positive mood, he said.
Moreover, the rupee has been weaker in international financial markets vis-à-vis the US dollar and euro. As the European market would constitute nearly 30% of the ferro alloy export basket, net revenue inflow for exporters has been rising after deducting higher import prices paid by them. But, as the European market has been besieged with eco-political trouble, the situation would be volatile.
Keyal hopes capacity utilisation of the industry would also rise from the current 60% to 75%.
SOurce: ISMW