TELF AG examines Ferro-alloys Market Update: Capacity Additions and Price Trends – April 11, 2023

Essential components

Ferro-alloys are essential components in steel production, widely used in various sectors such as construction, automotive, and aerospace. Recently, the ferro-alloys market has witnessed capacity additions and price trends, which have significant implications for producers, traders, and end-users.

Price Trends

Fastmarkets’ weekly price assessment for European HC FeCr higher grade was down slightly, with deals concluded within the existing range. The lower-grade price dropped, possibly pulled down by the expectation of a decrease in tender prices from China. Meanwhile, the US HC FeCr price was also down, and the Chinese HC FeCr domestic spot price slowed down on limited trading and dropped tender prices. Import prices for FeCr were stable, with international suppliers waiting for the tender prices to be published.

Capacity Additions

Capacity additions are a significant trend in the ferro-alloys market. Zimalloys has invested more than US$13 million in Zimbabwe to restart its furnaces after 13 years of no furnace production. The company has three furnaces at its Gweru smelting complex, with a combined installed capacity of 120 Kt/y. Zimalloys managing director Deric Dube stated that the plant would begin producing FeCr in August. Zimalloys now has the biggest furnace in the country, producing approximately 2.8kt to 3kt/month, compared to Zimasco’s 24MVA furnace.

In India, Petro Carbon & Chemicals, an Atha Group company, plans to set up a ferroalloys manufacturing plant at Bardhanyaghata in the Midnapore district of West Bengal. The proposed plant will spread over 10.29 acres of land parcel and install a 4×9 MVA submerged arc furnace and 2×10 tph Cr ore briquetting plant to produce ferroalloys. The project will generate employment for around 300 people. The company expects to commence work on the project by Q3/2023, subject to environmental clearance and finalization of contractors and machinery suppliers.

Outlook for Q12023

According to Woodmac’s outlook for Q12023, ferrochrome consumption between 2023 and 2027 is forecast to grow at a CAGR of 4%, underpinned by robust growth in stainless steel. Beyond 2027, growth in primary consumption from Chinese stainless steel will moderate, partly due to a rising scrap ratio, slowing growth to a CAGR of less than 1% over the rest of the outlook. This slower growth will also be partly underpinned by a more subdued outlook for consumption in other alloy steels. By 2033, global ferrochrome consumption will breach 20 Mt, with 86% of this being accounted for by stainless steel and the rest by other alloy steels.

Conclusion

The ferro-alloys market is dynamic and affected by various factors such as capacity additions, price trends, and global economic conditions. The capacity additions in Zimbabwe and India are a positive development for the market, and the price trends in Europe, the US, and China will likely influence global prices. As a result, the outlook for Q12023 is optimistic, with robust growth in stainless steel underpinning the forecasted growth in ferrochrome consumption.