Ferroalloy is the basic raw material for steel production, and its production process determines the quality of steel products. With the continuous progress of modern steelmaking technology, the requirements for the type and quality of ferroalloys in the industrial production of the iron and steel industry are getting higher and higher. Improvements in the category and quality of steel products are bound to directly promote the improvement of ferroalloy products in terms of production quality and product diversification. How will the arrival of this development opportunity affect the fluctuation of ferro alloys price? Our article will bring you a new interpretation.
Material Advantages of Ferroalloys
The main element of ferroalloy generally has a higher melting point, or its oxide is difficult to reduce, and it is difficult to smelt pure metal. If it is together with iron, it is easier to reduce and smelt. Ferroalloys are used in iron and steel smelting, where iron content is not only harmless but also beneficial because it is easy to melt in molten steel. Therefore, most of the deoxidation and alloy addition in the steelmaking production process is added in the form of ferroalloy. Ferroalloys are generally very brittle and cannot be used as metal materials.
Ferroalloys are mainly produced by electric furnaces, with high power consumption (about 5000 kWh per ton combined average), and abundant and inexpensive power resources are needed. France became the main producer of early ferroalloys, and Norway became the largest exporter of ferroalloys, both based on the abundant local hydropower resources. With the continuous development of the global economy, China has become the world’s largest producer and consumer of ferroalloys.
Industry Overview of Ferroalloys Market
Iron reserves are extremely abundant in nature, accounting for 5% of the content of elements in the earth’s crust, ranking fourth in the earth’s material. Iron is very active and easily combines with other substances. Pig iron generally refers to an alloy of iron with a carbon content of 2~6.69%. According to statistics, in recent years, China’s pig iron production has shown an overall upward trend. As of 2020, China’s pig iron production was 890 million tons, a year-on-year increase of 9.9%.
As early as the 1980s, the development level of the Ferroalloy industry in China surpassed that of the iron and steel industry. Because of this, China’s ferroalloy industry has problems such as repeated construction, too large capacity, resulting in the imbalance between market supply and demand, the loss of related enterprises is more serious, and other problems. According to statistics, as of 2020, China’s ferroalloy output was 34.196 million tons, a year-on-year decrease of 6.5%.
China is a major importer and exporter of ferroalloys. With the acceleration of globalization, China has become more closely connected with the international community, which to a large extent has brought new development opportunities for the development of China’s ferroalloy industry. According to statistics, as of 2020, China’s ferroalloy imports were 6,638,300 tons, a year-on-year increase of 28.5%, and exports were 461,900 tons, a year-on-year decrease of 16%.
Summary of Ferro alloys Price Trends
From January to July in 2021, the average export price of China’s ferroalloys was 21.853 million US dollars per 10,000 tons.
In July 2021, China’s ferroalloy exports amounted to 110,000 tons, a year-on-year increase of 208.1%. The export value was 236.603 million US dollars, a year-on-year increase of 330.2%. Among them, the average export price was 21.5094 million US dollars/10,000 tons.
Opportunities Facing Development of The Ferroalloy Industry
With the changes in the world economic development situation, higher requirements have been put forward on the quality of steel, which has promoted the vigorous development of the steel industry. Ferroalloy is an important material affecting the quality of iron and steel products, the improvement of iron and steel quality demand means that the quality of ferroalloy products also put forward higher requirements.
In addition, the diversification of ferroalloy products, pure purification, intelligent production level, energy-saving, and other aspects of higher requirements. The high-quality development requirements of the iron and steel industry have also promoted the modern development of the world’s ferroalloy industry to a large extent and brought effective development opportunities for the development of the ferroalloy industry.