There is excess production and keen competition. Stainless steel industry is also going through bad days due to its export being hit through anti-dumping action and poor local demand. The high cost of power is also a dampner. But new units are coming up in West Bengal to produce ferro alloys and some of the closed units are reopening. Facors Garividi unit has reopened after a closure of 18 months and is producing high carbon ferro chrome.

It is said to be using NTPC power and the production will be earmarked for export though part of it can be sold in the domestic market. With the high cost of oil many of the oil based captive power plants have become uneconomic and units like Ispat Alloys which was profit making are incurring losses. Only Nava Bharat Ferro Alloys which has a coal based power plant is making some profit. But it has shifted to production of silico manganese and high carbon ferro chrome from ferro silicon. Tatas ambitions to produce more high carbon fero chrome during the coming years will depress the market sentiment further as Tatas with large production of chrome ore can compete effectively with other producers. So ferro alloys will remain a depressed industry with a few units making profit.

Zimbabwe poltical trouble
The political upheavals in Zimbabwe are causing anxiety among consumers of high carbon and low carbon ferro chrome as the state has large deposits of chrome ore and is an important producer of high carbon and low carbon ferro chrome. Zimbabwe produced around 5 per cent of the world's high carbon ferro chrome and 8 per cent of low carbon ferro chrome supplying all of it in the world market. It ranks fourth in chrome ore resources after South Africa, Kazaksthan and India.

The resources of chrome ore and ferro chrome are owned by Western mining companies and now there are threats of the mining leases being withdrawn and reverted to the state. If done by Zimbabwe the move may influence other states particularly South Africa causing upheaval in worlds metals supplies. Japanese companies which had plans for some investment in Zimbabwe have put these on hold and their example will be followed by others. Anglo American Corporation (AAC) and Rio Tinto have acquired mining rights in Zimbabwe. AAC is also to take over the largest ferro alloys enterprise in Zimbabwe but this has not been supported by the Government. Now that president Mugabe will be in power for some time the world will be watching his new moves in regarding to mining rights in the country.