Abstract
The last two decades have seen structural changes to ferroalloy supply chains in response to the development of China’s steel industry, which now represents more than 50% of global crude steel and stainless steel output. The scale and sustained nature of Chinese demand have reshaped ferroalloy and raw material supply chains, albeit to varying degrees. In this paper, the ferroalloys industry is subdivided into bulk alloys (manganese and silicon), stainless alloys (chromium and nickel) and noble alloys (molybdenum, niobium and vanadium), reflecting the data availability from Roskill Information Services’ (Roskill) internal database. Manganese, silicon and chromium alloy prices are generally underpinned by the marginal cost of production, although trends in recent years have seen demand move prices up before an ensuing oversupply and the growing availability of cheaper substitutes pushed prices down in some markets. Noble alloys are used in more niche steel applications. Their prices are generally more susceptible to supply and demand dynamics (as is the price of nickel), rather than being fundamentally driven by costs. In these markets, short term supply-demand imbalances and market sentiment can have a considerable impact on material availability and price dynamics. Over the 2020s, Roskill forecasts that China will reach a peak in crude steel output. Over the same period, the steel industry in the country will continue its restructuring process with stricter environmental standards and industry consolidation, while gaining in efficiency and balancing its comparative and competitive advantages. This will have considerable and variable impacts on steel makers, ferroalloy producers and raw material suppliers domestically and abroad. This paper looks at historical market trends for steel alloys and outlines the key narratives that are expected to define the next decade.
Published Version
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