Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)
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Ferroalloys: Fundamental Component of Modern Engineering and Infrastructure
Every year more than 50 million tons of ferroalloys are produced worldwide. Ferroalloys are master alloys of iron containing one or more non-ferrous metals that are used as alloying element. Nobel or specialty ferroalloys are high valued and consumed in smaller quantities compared to bulk ferroalloys. They are vital additives in the production of specialty steels and super alloys. Nobel ferroalloys are used in high temperature applications such as power plants, turbine engines, pollution control equipment and furnaces.
Growth trends in ferroalloy industry are closely associated with iron and steel industry. Industry 4.0 is transforming the steel industry and will push global production to 2.0 Bn tonnes by the year 2030. Presently, steel making accounts for more than three-fourth of the ferroalloy demand. Ferroalloys are added to steel to improve corrosion and wear resistance and tensile strength properties. Manganese, chrome and silicon are the principal ferroalloys used across industries. Steel industry is considered crucial for the development of any progressive economy and the backbone of advanced engineering.
During modernization, China has invested massively in the steel processing industry. China is the largest producer and accounted for over 50% of the world steel production. Growth in infrastructure projects compared to weak residential construction has been key driving force behind rising steel consumption. China has also taken giant leap in the production of ferroalloys with advanced technologies and innovation. North America region is the largest importer of ferroalloys with major imports from South Africa, Georgia, Russia, China, Malaysia and Australia. The steel industry in the U.S. is likely to exhibit modest growth due to slowdown in construction and automotive industry.
High Energy Costs and Market Balance an Achilles Heel to the Industry
Production of ferroalloys is considered among one of the most energy and coke intensive process in the industry. Ferroalloys manufacturers spends around 40%-60% of its production costs on energy consumption.It is estimated that around 100 Mt CO2emissions are generated in the ferroalloy production process.Coke and coal together contributed highest (50%) to the total GHG emissions in the production process. Energy efficiency and high energy costs have become a stumbling block in the ferroalloy production, especially in the countries like India and South Africa where power tariffs are high. Due to high power consumption, the industry’s production utilization rate is highly volatile.
The demand in ferroalloys market is predominantly determined by advancements in iron and steel industry. Rising trade tensions between U.S. and China, Brexit and Section 232 are likely to make bearish sentiment among the world steel markers over the next few years. With surplus supply, there is a drastic drop in the of manganese and chromium alloys. Modest steel demand and uncertainty in automotive industry during Covid-19 crisis also added to the market woes.
New Energy Saving Production Technologies to Ensure Sustenance
Companies in Europe and North America are focused upon investing and developing new technologies to ensure energy savings and radically reduce CO2 emissions. Manufacturers are emphasizing on innovation with improved resource efficiency and less environmental impact. Ferroalloy producers are evaluating the possibility to replace fossil coal with charcoal as the primary energy source to reduce carbon emissions. Use of biomass as fuel will help the industry to meet sustainable climate policies.
Furthermore, manufacturers such as The Eurasian Resources Group (ERG) are also exploring the possibility to install units at the processing facilities to use waste gases for the production of electricity. Another ferroalloy producer in Norway, Finnfjord AS, has invested in the heat recovery system that generates around 340 GWh of power. The facility is considered among the world’s most energy efficient and environmental friendly.
Focus on In-house Integrated Production Capabilities and Capacity Expansions
In a bid to secure business from future uncertainties such as volatility in supply of raw materials and energy costs, the manufacturers have shifted their focus on in-house production capacities. SAIL, one of the largest producers of steel in India has emphasized on self-reliance for input material/ferroalloys for better cost efficiency. The raw material integration will certainly help SAIL to remain committed to the Ministry of Steel’s target of increase in steel production with better efficacies.
In 2019, AMG Vanadium ground broke a second ferroalloy facility in Ohio, U.S. to meet the growing demand steel and refining industries. The company is focused on creating valuable specialty metals from discarded waste (oil refinery and power plant waste) with its waste recovery and energy conservation systems. In 2019, TNC Kazchrome JSC commenced its operations at new smelting furnace.The massive modernization project with also includes three more technologically upgraded furnaces with better productivity and energy efficiency. The facility will also collect the waste gas and used it to heat charge the furnace.