Silico Manganese Prices Increase Amidst Supply Chain Disruptions

Introduction

The Silico Manganese market is projected to experience significant growth over the coming decade, with its market size expected to reach approximately USD 40.5 billion by 2032, up from USD 23.76 billion in 2022, reflecting a compound annual growth rate (CAGR) of 5.5% during the forecast period from 2022 to 2032. This growth is driven by several key factors, challenges, and recent developments in the industry.

Growth Factors

Increasing Demand for Steel: The growing demand for high-quality steel in various sectors, particularly in the construction and automotive industries, is a primary driver. Silico manganese is essential in steel production due to its ability to enhance the strength, durability, and corrosion resistance of steel​​​.
Infrastructure Development: Significant investments in infrastructure projects, especially in the Asia-Pacific region, are contributing to the demand for silico manganese. Countries are focusing on boosting their economies through extensive infrastructural developments post-pandemic​​​.
Automotive Industry: The automotive sector continues to be a major consumer of silico manganese, particularly in the production of automobile bodies and other components. The shift towards electric vehicles further bolsters this demand​.
Fluctuating Raw Material Prices: The silico manganese market faces challenges due to the volatility in raw material prices, which can impact production costs and profit margins​.
Environmental Regulations: Stringent environmental regulations and the need for sustainable production practices pose significant challenges. The industry must continuously adapt to meet these regulations while maintaining cost-effectiveness​.
Geopolitical Uncertainties: Geopolitical factors and trade policies can disrupt the supply chain and affect market stability, posing a risk to consistent market growth​.

Key Players Analysis

Brahm Group: Known for its substantial investments in production capacity, Brahm Group continues to expand its footprint in the silico manganese market. Their recent project in India aims to boost their output significantly, positioning them as a key supplier in the region.

EMCO (Bahrain Ferro Alloys BSC): EMCO’s focus on technological advancements and modernization of its facilities demonstrates its commitment to maintaining high production standards and meeting increasing market demands. Their efforts in enhancing efficiency and quality are crucial for their competitive edge.

Eramet: As a leading producer, Eramet’s strategic supply agreements and emphasis on sustainable practices highlight its forward-looking approach. By aligning with the growing electric vehicle market and adhering to sustainability norms, Eramet strengthens its market position and ensures long-term growth.

Ferroglobe: The company’s reorganization and capacity expansion initiatives underscore its proactive stance in adapting to market needs. Ferroglobe’s efforts to streamline production and enhance output cater to the rising demand from various industries, ensuring its continued relevance in the market.

Statistics

• Ferro-manganese is produced as highcarbon ferro-manganese with 72-82% Mn, 6-8% C and 1.5% Si.
• Medium carbon ferromanganese with 74-82% Mn, 1-3% C and 1.5% Si and low carbonferromanganese with 80-85% Mn, 0.1-0.7% C and 1-2%Si.
• Ferro-silicon contains about 75-90% silicon and minor amounts of iron,
• As per SteelMint’s assessment, Raipur-based producers offered at around INR 83,200/t exw, which rose by 9% w-o-w, while in Durgapur prices were at 81,400/t exw, increasing by 6% w-o-w.
• TeelMint recorded trade volumes of around 3,500 tonnes (t) of manganese alloys in the domestic market.
• Australian-origin manganese ore lumps (Mn 46%) are currently valued at $5.6/dmtun CNF Vizag, up 8% w-o-w.
• Ferrosilicons with higher silicon content are made in electric arc furnaces. The usual formulations on the market are ferrosilicons with 15%, 45%, 75%, and 90% silicon.
• The remainder is iron, with about 2% consisting of other elements like aluminium and calcium.
• Reserves are located in south Africa (26%), Ukraine 25%, Australia 17%. Brazil and India 9% each.
• Most nodule are found in areas of deep-sea floor at water depths of 5 to 7 km.
• The pacific Ocean alone is estimated to contain about 2.5 billion tons nodules containing about 25% Mn, making them similar in abundance to low-grade land based deposits.
• North America had less than 1% world reserves.
• By adding manganese in the form of MC / LCFeMn instead of HCFeMn, around 80% to 93% less carbon is added to the steel (for a steel containing 2% manganese).
• Low Silica friable/fine chromite ore withchromium oxide not exceeding 52% andsilica exceeding 4%
• Chromite lumps containing chromiumoxide not exceeding 40%
• As per the National Mineral Inventory as on 1.4.2000, the recoverablereserves of manganese ore are placed at 191 million tonnes.
• Medium grade manganeseore/blended ore containing 46%-49% manganese only with notless than 0.24% Phos.
• Low grade manganeseore/blended ore coantaining lessthan 38% manganese
• Community consumption of ferro-silico-manganese increased virtually continuously during the period under consideration. In total, it went from 415 263 tonnes in 1989 to 504 043 tonnes in the investigation period, representing an increase of 21,4 % over the period.
• The total volume of imports of ferro-silico-manganese originating in Russia, Ukraine, Brazil and South Africa increased steadily and substantially from 64 358 tonnes in 1989 to 150 198 tonnes in the investigation period, i.e. an increase of 133,4 %.
• In terms of market shares based on total apparent consumption, the market penetration of the dumped imports rose significantly from 1989 until the investigation period, i.e. from 15,4 to 29,7 %. The market shares of the individual countries concerned during the investigation period were as follows: Russia 3,3 %, Ukraine 6,6 %, Brazil 9,9 % and South Africa 9,9 %.

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Emerging Trends

Increased Demand from the Steel Industry: The steel industry remains the primary driver for the silicon manganese market. Silico manganese is essential in the production of high-strength steel, particularly for construction and infrastructure projects. The growing global infrastructure investments are significantly boosting the demand for silico manganese​​​.

Technological Advancements: Advancements in production technology are enhancing efficiency and reducing costs. The use of electric arc furnaces and other modern techniques is becoming more prevalent, allowing for more sustainable and cost-effective production processes​.

Expansion of Production Capacities: Companies are investing heavily in expanding their production capacities to meet the increasing global demand. This includes the establishment of new manufacturing plants and the modernization of existing facilities to boost output and improve product quality​.

Focus on Sustainability: There is a growing trend towards sustainable practices in the silicon manganese market. Companies are adopting eco-friendly production methods and focusing on reducing their carbon footprint. This aligns with global efforts to address climate change and environmental sustainability​.

Rising Adoption of Electric Vehicles (EVs): The automotive industry’s shift towards electric vehicles is creating new opportunities for silico manganese. The alloy is used in the production of high-performance steel required for EV components, which is driving demand in this sector​.

Regional Growth in Asia-Pacific: The Asia-Pacific region is expected to witness the highest growth in the silicon manganese market. This growth is driven by rapid industrialization, urbanization, and significant investments in infrastructure development across countries like China and India​.

Increasing Anti-Dumping Measures: To protect domestic industries, several countries have implemented anti-dumping duties on silico manganese imports. These measures aim to stabilize market prices and support local producers by reducing unfair competition from foreign markets​.

Key Players Analysis

Bahrain Ferro Alloys BSC (BAFA), operating under EMCO, specializes in the production of high-carbon ferro manganese and ferro silico manganese. Established in 2008, BAFA quickly became a leading manufacturer in the region, supported by its advanced 24MVA submerged arc furnace with a production capacity of 30,000 tons per annum for ferro silico manganese. This facility plays a crucial role in the steelmaking industry by providing essential deoxidizing and alloying materials to enhance steel quality​​​.

Brahm Group, established in 2010, has quickly become a significant player in India’s silico manganese sector. Operating from Meghalaya and West Bengal, the group produces high-grade silico manganese (65-15) for both domestic and international markets. Their facility in West Bengal is fully export-oriented, contributing to the growing demand for high-performance steel products globally. With a focus on quality and timely deliveries, Brahm Group has established itself as a notable exporter in the ferroalloy industry​

Eramet is a major player in the silico manganese sector, with significant production capabilities in Gabon. The company produces high-grade manganese ore and various manganese alloys, including silico manganese, which is crucial for deoxidizing and improving the strength and quality of steel. Eramet focuses on sustainable practices, including significant investments in reducing CO2 emissions and enhancing energy efficiency in its facilities. The company’s operations are pivotal in supplying essential materials for the automotive and construction industries​.

Ferroglobe is a leading producer of silico manganese, which it uses primarily in steel manufacturing as a deoxidizer and alloying agent. The company’s advanced production facilities ensure high-quality alloy production, catering to the global steel industry. Ferroglobe’s silico manganese improves steel’s mechanical properties, such as strength and durability, and is essential in various steel applications, including construction and automotive sectors. Their operations are strategically positioned to meet growing industrial demands​​​.

Nippon Denko Co., Ltd. is a prominent player in the ferroalloy sector, specializing in the production of silico manganese, among other products. The company operates within the ferroalloy segment, producing and selling silico manganese, ferromanganese, and other special alloys essential for steel manufacturing. Their facilities, like the Tokushima and Hidaka plants, utilize by-products from ferroalloy production to create soil-improving fertilizers, demonstrating a commitment to sustainability. Nippon Denko’s operations are supported by advanced technological processes and a robust global presence​​​​​.

OM Holdings Ltd. is a significant player in the silico manganese sector, with extensive operations spanning mining, smelting, and trading. The company operates a major sinter plant in Sarawak, Malaysia, with an annual production capacity of 250 kilotons of manganese alloys, supporting its global supply chain. OM Holdings Ltd. is committed to enhancing its production efficiency and market reach through strategic investments and technological advancements. The company serves as a critical supplier to the steel industry, leveraging its vertically integrated structure to optimize operations and distribution across multiple regions.

Gulf Ferro Alloys Company (Sabayek) operates in Saudi Arabia, producing high-quality silico manganese essential for steelmaking. With an annual production capacity of 140,000 metric tons, Sabayek serves both local and GCC markets, exporting 60-70% of its output to the US and Europe. The company is crucial in making Saudi Arabia one of the world’s top 15 producers of silico manganese. Sabayek is also preparing for a listing on the Nomu – Parallel Market by 2024, indicating significant growth and expansion plans​​​.

Sakura Ferroalloys Sdn Bhd, located in Samalaju Industrial Park, Sarawak, Malaysia, operates two 81 MVA submerged arc furnaces producing high-carbon ferromanganese and silico manganese. This joint venture, involving Assmang Limited, Sumitomo Corporation, and China Steel Corporation, leverages cost-effective power supply agreements to maintain efficient production. The plant’s annual capacity includes approximately 107,000 tons of high-carbon ferromanganese and 67,000 tons of silico manganese, with the flexibility to switch production based on market demand. These products are essential for steelmaking, enhancing its strength and durability​​​​​.

Tata Steel Ltd. is a significant player in the silico manganese sector, utilizing this alloy extensively in their steel production processes. The company leverages silico manganese to enhance the properties of its steel products, such as strength and hardness, making them suitable for diverse applications including construction and automotive manufacturing. Tata Steel’s strategic use of silico manganese helps in deoxidizing and refining steel, ensuring high-quality output and maintaining its competitive edge in the global steel market.

Steel Force is a key supplier in the silico manganese sector, providing high-quality ferroalloys essential for steel production. Their silico manganese alloys, which contain silicon and manganese, are crucial for enhancing steel properties such as strength, hardness, and resistance to wear and corrosion. By sourcing high-quality materials and offering competitive pricing, Steel Force helps steel mills improve production efficiency and reduce costs. Their expertise in ferroalloys ensures consistent supply and support for the steel manufacturing industry.

Sheng Yan Group is a prominent player in the silico manganese market, specializing in the production and supply of high-quality silico manganese alloys. The company focuses on leveraging advanced production technologies to produce alloys that enhance the mechanical properties of steel, such as strength and durability. Sheng Yan Group has established itself as a key supplier to the steel industry, contributing significantly to the manufacturing processes that require deoxidizing and desulfurizing agents. The group continues to expand its market presence by optimizing production efficiency and maintaining rigorous quality standards​

PJSC Nikopol is a leading producer of silico manganese, essential for steel manufacturing. The company is known for its extensive production capabilities and high-quality products, which are critical for enhancing the properties of steel, including strength, hardness, and resistance to wear and corrosion. PJSC Nikopol has a strong market presence and continues to innovate in alloy compositions to meet the diverse needs of the steel industry, ensuring efficient and reliable supply chains for its global clients.

Glencore, a major global commodity trader and producer, engages in the silico manganese sector through its production and marketing of manganese alloys. The company operates several smelters and mines, producing substantial volumes of manganese alloys used primarily in steelmaking. Glencore’s assets and operations focus on enhancing the quality and properties of steel by providing essential raw materials, thereby supporting various industries including construction, automotive, and manufacturing.

Jinneng Group is a significant player in the silicon manganese market, known for its extensive production capabilities and high-quality output. The company focuses on producing silico manganese alloys used in steelmaking, enhancing the steel’s strength, hardness, and wear resistance. Jinneng Group’s production facilities contribute to meeting the rising demand for these alloys in various industrial sectors, particularly construction and infrastructure projects, thus playing a vital role in the global steel supply chain​​​.

Sources

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