OMC sources said due to a glut in the world ferro-chrome market, there is absolutely no demand for the chrome ore.

"Such is the situation that even if the prices were reduced there is nobody in the market to buy the ore," the sources added.

Distress sale of ferro-chrome has been reported from spot market. Against the spot price of 36 cents per lb of chromium, ferro-chrome is being offered at 34 and 33 cents.

According to market analyst Anup Patnaik, ferro-chrome is constantly falling in the international market because of the glut. China, one of the biggest producers of ferro-chrome in the world, has a surplus with 2-3 months of inventories.

The problem started with Japan, badly hit by thecrisis, reducing stainless steel production. It became worse with the US imposing anti-dumping duty on imported stainless steel recently, he said.

The new conditions imposed by Chinese banks on imports have also prevented the manufacturers of that country from speculative buying of ore. The banks are now insisting for a deposit of 80 per cent of the value of the cargo to be imported for opening a letter of credit (LoC). Many of the manufacturers had burnt their fingers by speculative buying of ore in recent times. The ferro-chrome producers imported about 8 lakh tonnes of ore in the first quarter of 1998 expecting the market to improve. But to their misfortune the market crashed and their speculation failed.

Given the present market scenario in the world in general and China in particular, OMC market experts predict that the "ore market will sleep for at least six months".

They indicated that the corporation may go for a downward revision of ore prices sometime in the later part of the current quarterto clear the surplus.

The state-owned OMC had exported 1.12 lakh tonnes of chromite in 1997-98 as against 1.10 lakh tonnes in 1996-97. Supply to the world market was 1.30 lakh tonnes in 1995-96. The earnings from ore exports was Rs 30.38 crore in 1997-98, Rs 45.48 crore in 1996-97 and Rs 30 crore in 1995-96. The country's total export in 1996 was 4 lakh tonnes and 3.5 lakh tonnes in 1997.

India has the third largest reserves of chrome ore in the world, estimated at 182.5 million tonnes and accounts for approximately 12 per cent of the world'stotal production. About 98 per cent of the country's chromite reserves has been located in Orissa. OMC and Tisco, who have mining lease holds in chromite-rich Sukinda Valley (Orissa), are the two major chrome ore suppliers of the country. India's chrome output has touched 1.4 million tonnes a year.

The demand from the domestic market has been shared by metallurgical industries (85 per cent), chemical industries (9 per cent) and refractory industries (6 per cent).The export of chrome ore and concentrates for India is mainly to China and Japan. China, which happens to be largest importer of Indian ore, has lifted about 3.5 lakh tonnes of ore in 1997 as against 2.97 lakh tonnes in 1996.