Raghu Kapoor: India unlikely to be a net exporter of noble alloys soon

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?

Raghu: Our core business is the manufacturing of Ferro Molybdenum and Ferro Vanadium. Additionally, we produce Ferro Titanium, MC Ferro Manganese and a host of other (low carbon) Ferro alloys. We are also trading in some low carbon Ferro alloys and minerals and metals. The products are used in the manufacture of alloy steels, stainless steels, high-speed steels and other special grade steels, infusing anti-abrasive and anti-corrosive properties to steel as well as in various types of foundries. Our sister-entity, Rama Ferro Alloys & Finance Pvt Ltd, is also producing Ferro Silicon Magnesium and Nickel Magnesium alloy.

Asian Metal: You currently produce ferrovanadium 50%min. Do you rely exclusively on imports of vanadium pentoxide from China and South Africa? 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?

Raghu: Our main source of vanadium is sludge from the alumina refineries, and other vanadium concentrates. We produce Vanadium Pentoxide at our facility and subsequently convert to Ferro Vanadium. We intermittently import Vandaium Pentoxide, mainly from China. Ferro Molybdenum demand, production and pricing have been relatively stable throughout the year. However, prices in India have been subject to volatility, primarily owing to USD: INR exchange rate.

Asian Metal: At what level of capacity do converters need to operate to break-even given the challenges relating to weak demand in the alloy steel and cheap ferrovanadium from Europe and China?

Raghu: For us we have to operate at 70% capacity and for other plants it may vary though below 50% production capacity it would seem tough to break even.

Asian Metal: What is your view on environmental protection responsibility?

Raghu: We prioritize environmental responsibility over other business goals, and maintain uncompromised environmental and safety standards.

Asian Metal: And looking at the current numerous challenges facing ferroalloys industry, from high power tariff, slow demand during election cycles, do you produce other noble alloys to keep your furnace running at minimal capacity?

Raghu: As a majority of our production is by the alumino-thermic process, we do not have very large power consumption. However, we do produce a host of different low carbon Ferro alloys to ensure maximum capacity utilization.

Asian Metal: Do you see the stainless steel sector and alloy steel recovering this year?

Raghu: Currently all policies are on hold pending elections. We do anticipate a slight recovery post elections.

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

Raghu: This usually happens as the traders in Mumbai are offering spot prices whereas producers/converters have long term contracts with their overseas suppliers.

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

Raghu: This depends on the economy as a whole as different industries are codependent on one another. Our main markets are the Alloy steel producers and foundries.

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

Raghu: As we import most of the raw material for production of these alloys and consume them in the domestic market it looks highly unlikely that we will be a net exporter anytime soon.

Asian Metal: Thanks for your time and we wish you success in your business activity.

Raghu: Thanks for providing the platform.