Ferroalloys, neglected in the industrial development of Iran
Currently, Iran supplies part of its need for ferroalloys from domestic production and part from imports. Iran has good mineral reserves of silica and chromium, which are responsible for the supply of ferro-silica and ferro-chromium inside the country. According to statistics, in the first three months of 1401, we have exported about 14,500 tons of ferrosilicon and 58,000 tons in the chrome chain. However, in the field of manganese ferroalloy, due to the discovered reserves in terms of the low grade of manganese ore and the limitation of the volume of mines, there is a need to import goods in two parts of manganese ore to produce its ferroalloy in domestic factories and manganese ferroalloy product.Venarch Qom mine is still the largest manganese mine in the country, the existing reserves do not allow the production of high purity ferroalloys, but it can be useful for a major part of construction carbon steel in combination with imported stones. Good efforts are being made in the field of manganese mining exploration and we hope that in the future the country’s need for this valuable mineral will be met from within the country.
In this regard, the need of ferroalloy production factories for high electrical energy and the limitation of electrical energy consumption can be seen as a factor with a significant effect. Emphasizing that there are very good markets for the export of ferro-silica, Hosseini considered the production and export of this product as opposed to the import of ferromanganese instead of manganese ore, taking into account the factors inhibiting the production of this ferroalloy, as the reason for balancing the import and export of ferroalloys. .He emphasized that in recent years, the government has entered the ferroalloys market, and the volume of imports in the first three months of 1401 was announced as 14,000 tons of silico-manganese and 37,000 tons of ferro-manganese, and measures were taken to support domestic silico-manganese producers. The license to import silico-manganese has been granted exclusively to producers of this product, and if a businessman intends to import silico-manganese, he is required to submit a declaration of need and contract with a domestic steel producing company. The government has rationed this production requirement and is even trying to oblige silicon manganese consumers to buy from domestic producers. Therefore, it can be said that the government has prevented the import of ferro-manganese.
A look at the global markets of ferroalloys
In the world market in 2021, Russia had a share equal to 0.86 million tons of ferroalloy exports, which were mainly destined for European countries. In the same year, Ukraine also exported about 0.58 million tons, but currently these two countries have left the market of exporting ferroalloys to Europe. Price fluctuations started with Russia’s attack on Ukraine and increased wildly, and with the reduction of tensions between these two countries, the price also decreased.
In Europe, steel industry producers have been forced to limit production due to the increase in energy prices due to the lack of competitive prices. This issue has created a good opportunity for countries like India.
He considered the main reason for the decrease in the price of ferroalloys in the first three months of 1401 to be related to the Chinese market as the largest consumer of ferroalloys in the world. . Also, the change in the Chinese government’s housing policy (restricting mortgage loans) has led to a decrease in steel consumption and subsequently the price of raw materials. Following this incident, the price of steel and because of that, the consumption of ferroalloys, which is a function of steel consumption, has decreased.
Forecasting the price of ferroalloys
Iran needs 300,000 to 350,000 tons of manganese ferroalloy every year, and according to published statistics, the country’s production capacity shows the ability to produce half of the domestic demand. The pricing method of the domestic market regarding silicon alloy is in such a way that the government determines a reference price announced to the ferro-silicon production factories, but in the case of manganese alloy, which has been mainly supplied from India in recent years, due to the high share of the import market and the existence of limited production factories and owned by people with non-Iranian citizenship who are dependent on the import of high grade manganese ore, there is compliance with the imported prices and global market fluctuations.
Ferroalloy price forecast is completely dependent on steel market prices, and in this industry, the price is on the one hand due to the policy adopted by Russia in the market, which was able to increase the supply of steel products with severe price dumping, and on the other hand, the limitation of electricity in the summer season, which leads to a decrease The production of factories shows a decreasing trend.
Global events have caused the steel production cycle to deteriorate and the share of Iran’s exports to decrease, and it is predicted that this downward trend will continue until the middle of September and, in a pessimistic state, until the middle of October. The available documentation of the trend of the past years shows that the global markets have created a positive trend by adopting new trade policies in the Chinese government after the one-week festival holiday in October in this country. As a result, we can hope to see the start of growing space in this industry in October.
The increase of this time of stagnation in the steel industry and subordinate ferroalloys depends on the examination of the three factors of global competition, China’s holiday again, which is caused by the resurgence of the corona virus, and also the fluctuations of energy prices in the world.
What can change the market of India, which is the main supplier of Iran, is the increase in the demand for goods for export, the stoppage of production in ferroalloy factories due to economic inefficiency, and the increase in the demand of the production market in India.