Adarsh Jhaveri: Demand for noble ferroalloys in India will continue to grow

Asian Metal: First, thanks for your time for granting this interview, and would you please introduce your company briefly and the product grade you currently produce?

Adarsh: Moly Metal Pvt. Ltd. produces Ferro Molybdenum and Moly di sulphide.

Asian Metal: How has the ferroalloys industry fared since the beginning of new fiscal year in April, and what impact on molybdenum sector in terms of production, demand and pricing?

Adarsh: Since April 2013; the steel and automobile sectors in India are not faring well. Only in August and September 2013 we have started seeing a pick up in demand. The Indian currency has been very volatile from May 2013 and due to that the price of ferromolybdenum in India has been changing much more than the international price.

Asian Metal: At what level of capacity do converters need to operate to break-even given the challenges relating to falling demand, cheap material from overseas market and payment delays?

Adarsh: I think most converters in India are operating below 70% capacity utilization from April 2013. The profitability of converters depends on the price at which they have purchased their raw materials - in particular roasted molybdenum concentrate for ferromolybdenum producers. Also the exchange rate at which they have made payment for this raw material decides their profitability.

Asian Metal: And looking at the current numerous challenges facing ferroalloys industry, from volatility in the exchange rate of Indian Rupee against major currencies, new and high power tariff, weak demand, etc, what is your take on all these?

Adarsh: For bulk ferroalloy producers, high power tariff is a very significant cost. It does not affect the noble ferroalloy producers much. However for noble ferroalloy producers the volatility of Indian Rupee is hurting considerably.

Asian Metal: Do you think the stainless steel sector and alloy steel going to recover in the coming year?

Adarsh: The summer and monsoon seasons in India - April to July 2013 was a very bad period for the SS and Alloy steel sector. However from August the demand has picked up and the steel producers have been able to increase their production as well as price. Price increase has been marginal though.

Asian Metal: Do you see any positive trajectory of the noble alloys in India, which is your main market?

Adarsh: The demand for noble ferroalloys in India will continue growing. However; as most of the raw material containing ore has to be imported; the Indian government should allow duty free import of these ores to promote the Indian industry to flourish.

Asian Metal: Traders continue to complain that low prices being offered by traders in Mumbai area? What account for these price disparities?

Adarsh: Pricing is always an issue. Especially in Mumbai area there are many traders of ferro alloys. All of them try to cater to the same customers which are geographically close by. Due to pollution norms all industries have shifted from Mumbai area. Hence there are too many suppliers chasing too few customers leading to fierce price competition.

Asian Metal: Do you see India being a net exporter of ferromolybdenum someday?

Adarsh: It is very difficult for India to be a net exporter of ferromolybdenum as all the raw material has to be imported.

Asian Metal: Any suggestion to policy makers regarding output and export?

Adarsh: As stated; if import of ores is allowed duty free; there is good potential of growth for the noble ferroalloy industry in India and good export potential as well.

Asian Metal: Thanks for your time and we wish your company success.