Bulk Ferroalloys Market - Electrification of Vehicles to Add New Dimension

The global bulk ferroalloys market is projected to arrive at a value tantamount to ~US$ 79 Bn by 2027, as two distinct segments power growth: increasing opportunities for ferroalloys in construction activities across the globe and the use of steel to foster innovations in automotive designs. New opportunity is created for bulk ferroalloy manufacturers with the introduction of the Paris Agreement regarding the electrification of vehicles by 2030. Since automakers seek lightweight materials to improve the fuel efficiency of vehicles, the demand for steel is projected to intensify during the period of 2019-2027.

However, the depletion of reserves is bound to pose a serious challenge for the future production of these alloys. As the availability of raw materials for the ferroalloys industry is inadequate in numerous countries, the industry is highly reliant on imports, which is likely to influence the price of bulk ferroalloys during the forecast period. The high cost of producing bulk ferroalloys is yet another concern for manufacturers. Power requirements for the production of bulk ferroalloys are ~35%-40% of the total overhead cost, given the volatility in the prices of coking coal and electricity. Owing to the high cost of power generation, ferroalloy plants fails to utilize their full capacity, and this surges the prices of the end products.

bulk ferroalloys market infographic

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Manufacturers Look at Asia Pacific as a Region with Measurable Growth Opportunities

As per the TMR study data for 2018, Asia Pacific accounted for ~57% of the market share, and will continue to remain relevant during the forecast period, given its favorable geographic location, coupled with the lead of China, India, and Japan in the production of steel. Propitious demand-supply dynamics in the steel industry in India, including the permission for 100% foreign direct investment (FDI) in the mining sector and high budget allocation to infrastructural activities, are projected to augur well for the regional market.

Besides construction, the bulk ferroalloys market also remains benefitted from the growth of the automotive sector of Asia Pacific, which enhances its lucrative quo. For instance, in October 2018, Mitsubishi Motors announced its plan to raise the production capacity of its steel plant, located at Bekasi, from 160,000 units to 220,000 units, annually, by 2020.

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Manufacturers of bulk ferroalloys operating across the world are leveraging exports as a means to venture into the new as well as established market of Asia Pacific. However, the value proposition of the European bulk ferroalloys market is in stark contrast with the Asia Pacific market. Market players concentrated in Europe are seen leveraging electric arc furnaces (EAF) to gain improved production efficiency, reduced pollution, and decreased dependence on coking coal. EAFs account for two-thirds of the steel production in Europe, which significantly influences the total production cost, that too, by aligning with the concept of environmental sustainability.

In the future, easy availability of workforce and technological leaps that catapult production capacity, will, in turn, reflect on the regional production capacity. For instance, Nikopol Ferroalloy Plant, operating in Ukraine, supplies bulk ferroalloys to over 300 metallurgical enterprises across the world, owing to the technological prowess of the company that facilitates high output.

bulk ferroalloys market segmentation

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Analysts’ Viewpoint

Authors of the report infer that, the bulk ferroalloys market will rise from ~US$ 47 Bn in 2019 and advance at an above-average CAGR of ~6% during the forecast period. Since establishing a production plant requires huge working capital, the cost-prohibitive feature of the industry reduces the threat of new market entrants; however, the competition is likely to remain intense during 2019-2027, given the growing interest of raw material suppliers in the production of bulk ferroalloys. Besides forward integration, leading end users of ferroalloys - steel producers - are seen forming joint ventures and acquisitions, which could lead to backward integration and further increase competition in the landscape.

Significant Growth of Electric Vehicles Industry to Boost Demand for Bulk Ferroalloys

  • Significant increase in the production of electric vehicles across the globe is estimated to substantially augment the demand for steel in the near future. Increase in the demand for steel is likely to boost the demand for bulk ferroalloys for use in steelmaking, between 2019 and 2027.
  • The global automotive industry has strong potential for the production of electric vehicles, with the industry’s route towards environment-friendly vehicles. As per estimates made by the International Energy Agency (IEA), the share of electric vehicles in the total sales of vehicles in Europe is expected to reach 26% by 2030.
  • The Electric Vehicles Initiative (EVI), a multi-government policy forum, launched the 'EV 30@30' campaign in 2017. The campaign involved a collective goal of an average 30% market share for electric vehicles by 2030.
  • Canada has set a target to sell 100% zero-emission vehicles (ZEVs), i.e. electric vehicles, by 2040. The Federal Government’s targets also include ZEV sales goals of 10% by 2025 and 30% by 2030.
  • Thus, significant growth of the global electric vehicles industry is likely to drive the global bulk ferroalloys market during the forecast period.

Global Bulk Ferroalloys Market: Highlights

  • In terms of value, the global bulk ferroalloys market is anticipated to expand at a CAGR of ~ 6% from 2019 to 2027, and reach a value of US$ 79 Bn by 2027.
  • Rise in the demand for steel in various end-use industries, such as construction & infrastructure, aerospace, and automotive, is likely to propel the global bulk ferroalloys market during the forecast period.
  • Factors such as rise in infrastructure development and high growth of the population in Asia Pacific are anticipated to boost the bulk ferroalloys market in the region during the forecast period
  • India replaced Japan as the world's second-largest steel-producing country in 2018, following only China. The favorable demand–supply dynamics of the steel industry in India is expected to be a key factor driving the bulk ferroalloys market in the country in the next few years.
  • In order to build a single wind turbine (inland), around 225–285 tons of steel is required. The increasing demand for renewable sources of energy in North America is likely to augment the wind turbines industry in the region during the forecast period, thereby presenting immense growth opportunities to the bulk ferroalloys market in the region.
  • Ferroalloys is a power-intensive industry. Power accounts for around 35%-40% of the production cost. High operational costs and raw material scarcity in a few parts of the world are likely to hamper the global bulk ferroalloys market in the near future.

Ferromanganese to Witness Significant Demand

  • Bulk alloys include principal alloys such as ferromanganese, ferrosilicon, ferrochromium, and silico-manganese. These are mostly employed in steelmaking and ironmaking processes to enhance the properties of steel.
  • Ferromanganese is likely to be an attractive segment of the global bulk ferroalloys market during the forecast period. The market share of the ferromanganese segment is estimated surpass 20% by 2027.
  • Ferrosilicon is a highly powerful deoxidizing agent. Its applications include mineral dressing, iron casting, making of steel for use in dynamos and transformers, and tools for valves and automobiles.

Demand for Bulk Ferroalloys to Increase in Steel Application

  • Based on application, the global bulk ferroalloys market has been segregated into steel, superalloys & alloys (excluding steel), wire production, and others. 
  • Ferroalloys are added to steel in order to enhance its properties such as ductility, strength, and resistance to fatigue corrosion. They are extensively employed in the steel sector for use in the deoxidation of steel and cast iron.
  • Steel has been the material of choice in the automotive industry over a long period of time. In 2017, Audi A8 switched back to steel, with body structures to be made of more than 40% of steel, including 17% of PHS. The body structure of the Peugeot 3008 is made of 90% of steel. Increase in the demand for steel in automotive production is likely to boost the global bulk ferroalloys market between 2019 and 2027.

Asia Pacific Expected to be Highly Lucrative Market

  • In terms of value and volume, Asia Pacific constituted a prominent share of the global bulk ferroalloys market in 2018. According to the UN Department of Economic and Social Affairs, the number of cities in Asia with more than 500,000 inhabitants is estimated to rise by 30% by 2030. Increase in the pace of urbanization is estimated to augment construction and infrastructure development activities in the region during the forecast period.
  • The development of smart cities, particularly in India, and increasing urbanization in Asia Pacific, are likely to lead to the significant demand for steel in the region in the next decade. This factor is expected to augment the demand for bulk ferroalloys in Asia Pacific during the forecast period.

Global Bulk Ferroalloys Market: Competition Landscape

  • The report comprises detailed profiles of the major players operating in the global bulk ferroalloys market. The report also consists of a comparison matrix of the top four players operating in the global market, along with their market share analysis and product mapping for 2018.
  • Forward integration by key mining companies and backward integration by steel manufacturing companies across the value chain are expected to increase the degree of competition in the global bulk ferroalloys market during the forecast period.
  • Major players operating in the global bulk ferroalloys market are 
    • ArcelorMittal
    • OM Holdings LTD
    • Sakura Ferroalloys
    • Pertama Ferroalloys
    • Tata Steel
    • NikoPol Ferroalloy Plant
    • Gulf Ferroalloys Company
    • BAFA Bahrain
    • Brahm Group
    • China Minmetals Corporation
    • Shanghai Shenjia Ferroalloys Co. Ltd.
    • Ferroalloy Corporation Limited
    • MORTEX Group
    • Georgian American Alloys
    • SAIL
    • OFZ S.A.
    • Vale S.A.

Bulk Ferroalloys Market: Scope of the Study

Transparency Market Research (TMR) recently published a market study on the global market for bulk ferroalloys. It presents a complete assessment of the key market dynamics, including the drivers, market trends, and challenges, as well as the structure of the bulk ferroalloys market. TMR’s study offers valuable information about the bulk ferroalloys market, to elucidate how growth will discern during the forecast period of 2019-2027.

Key indicators of market growth, which include Year-on-Year (Y-o-Y) growth of the market, value chain as well as supply chain analysis, and Compound Annual Growth Rate (CAGR), are explained in TMR’s study in a comprehensive manner. This information can help readers understand the quantitative growth prospects of the bulk ferroalloys market during the forecast period.

An extensive analysis on leading market players’ business strategies is also featured in TMR’s study on the bulk ferroalloys market. This can help readers understand important factors to envisage the growth in the bulk ferroalloys market. Readers can also find, in the study, precise information on the qualitative and quantitative growth prospects of the bulk ferroalloys market, which can help market players make apt decisions in the future.

The TMR report on the market for bulk ferroalloys provides an assessment of the regional landscape of the market. Regional evaluation helps market competitors make strategic decisions pertaining to their potential investments and regional expansions. Country-level and segment-wise analysis of individual regions helps report audiences of the bulk ferroalloys market study in assessing the potential of the market in individual geographies. Backed by global value and volume share and year-on-year growth projections, this chapter is an essential part of the study on the bulk ferroalloys market.

The study on the bulk ferroalloys market offers a complete assessment of the competition, with details of leading and emerging market players. This chapter elaborates the nature of the bulk ferroalloys market with the help of the market share held by leading, emerging, and new players. The unique dashboard view of the players in the bulk ferroalloys market report aids readers in understanding the strategies implemented by key players and their performance in the bulk ferroalloys market, comprising focus areas of the bulk ferroalloys market players. The competitive structure of key players in the bulk ferroalloys market is also enclosed in the study.

Key Questions Answered in TMR’s Bulk Ferroalloys Market Study

  • What is the scope of growth for bulk ferroalloy companies in the banking sector?
  • What is the influence of changing trends in technologies on the bulk ferroalloys market?
  • Will North America continue to remain the most profitable regional market for bulk ferroalloy providers?
  • Are there any risks of investing in developing markets for bulk ferroalloys? 
  • Which factors will impede the growth of the bulk ferroalloys market during the forecast period?
  • Which are the leading companies in the global bulk ferroalloys market? 
  • How are changing regulatory frameworks and rapidly evolving technologies influencing the upcoming trends in the bulk ferroalloys market?

Research Methodology

A unique research methodology is utilized by TMR to conduct extensive research on the growth of the bulk ferroalloys market, and reach conclusions on the future growth parameters of the market. The research methodology is a combination of primary and secondary research, which helps analysts ensure accuracy and reliability of the conclusions.

Secondary resources referred to by analysts during the production of the bulk ferroalloys market study include statistics from internal and external proprietary databases, annual reports, SEC filings, company websites, World Bank database, investor presentations, relevant patent and regulatory databases, statistical databases, government publications, and industry white papers. Analysts have interviewed senior managers, product portfolio managers, CEOs, VPs, marketing/product managers, and market intelligence managers, who contributed to the development of this report as a primary resource.

Exclusive information provided by primary resources and secondary resources acts as a validation from bulk ferroalloys market players, and makes TMR’s estimates on the future prospects of the bulk ferroalloys market more accurate and reliable.

Segmentation of the Bulk Ferroalloys Market

TMR’s study on the bulk ferroalloys market classifies information into three important segments - product, application, and region. Changing industry trends and other important market dynamics associated with these segments of the bulk ferroalloys market are discussed in detail.

The study also offers complete information about the developments in the bulk ferroalloys market based on the products of bulk ferroalloys and applications across five geographical regions - North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

Product

Ferrosilicon (FeSi)

Ferromanganese (FeMn)

Ferrochromium (FeCr)

Others

Application

Steel

Superalloys and Alloys

Wire Production

Others

Region

North America

Europe

Asia Pacific

Middle East & Africa

Latin America

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Bulk Ferroalloys Market

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