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.

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Global Bulk Ferroalloys Market: Key Highlights

• In terms of revenue, the global bulk ferroalloys market is anticipated to expand at a CAGR of ~6% from 2019 to 2027.

• Electric vehicles essentially need lightweight designs, which is likely to necessitate the use of steel for innovative automotive designs. This is expected to drive the demand for ferroalloys for use in steel production during the forecast period, thereby boosting the global bulk ferroalloys market.

• A boom in the construction sector in member countries of BRICS is projected to fuel the demand for bulk ferroalloys in the near future.

Key Drivers and Restraints of Global Bulk Ferroalloys Market

• Ferroalloys are introduced at the molten stage of the steelmaking process for improving and enhancing the mechanical properties of steel. Ferroalloys generally have lower melting ranges than pure elements, and they can be fused more readily with molten steel.

• Automotive manufacturers have been designing vehicles with reduced weight, wherein, steel has been a cost-effective, lightweight material of choice over the years. For instance, the body and chassis of Tesla Model 3 is a blend of steel and aluminum, unlike the Tesla Model S, wherein, the body is made of aluminum. The body-in-white of Chevrolet Bolt contains 86% of steel, including 44% of advanced high-strength steel (AHSS). Increase in the demand for steel from the automotive industry is likely to propel the demand for bulk ferroalloys for use in steel production during the forecast period.

• High production costs associated with bulk ferroalloys are likely to restrain the bulk ferroalloys market to a certain extent in the near future. High production cost also acts as an entry barrier for new players in the global bulk ferroalloys market.

• Costs of production of ferroalloys have been increasing, due to the rising costs of coking coal and electricity. Owing to the high costs of power, the bulk ferroalloys industry in several developing countries of the world has not been operating at its full capacity. For instance, recently, South Africa witnessed a decline in the production of manganese ferroalloys locally, due to a steep rise in the prices of electricity.

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Bulk Ferroalloys Market: Ferrochromium to Witness Significant Growth

• The ferrochromium segment held a major share of over 30% of the global bulk ferroalloys market in 2018. Chromium is added to steel in order to improve wear resistance; increase resistance to corrosion and oxidation; increase hardenability; and promote strength at elevated temperatures. Ferrochromium is projected to witness high demand for use in the production of stainless steel and heat-resisting steel between 2019 and 2027.

• Ferrosilicon is also likely to witness significant demand from 2019 to 2027. Ferrosilicon is used to remove oxygen from steel, so as to impart better quality and durability to steel. It is sometimes used as a de-gasifier, due to its affinity toward undesired gases.%MCEPASTEBIN%

Bulk Ferroalloys Market: Steel Demand to Rise at a Rapid Pace

• The steel segment accounted for a major, i.e. ~40% share of the global bulk ferroalloys market in 2018. According to International Stainless Steel Forum (ISSF), China accounted for more than 50% share of the global stainless steel production in 2018. The steel industry, particularly that in Asia Pacific, is estimated to witness high demand for bulk ferroalloys during the forecast period.

Asia Pacific Expected to be Highly Lucrative Region of Global Bulk Ferroalloys Market

• The bulk ferroalloys market in Asia Pacific is projected to expand at a significant CAGR of ~ 7% from 2019 to 2027.

• The automotive industry in ASEAN has attracted high investments in recent years. For instance, in February 2019, Scania AB inaugurated a new assembly plant for heavy commercial vehicles in Bangkok, Thailand, and unveiled an entire range of new trucks. In January 2019, Vietnam’s Truong Hai Auto Corporation (THACO) invested VN? 4.5 Trn (nearly US$ 200 Mn) in a car manufacturing plant in the country, with the annual capacity of producing 20,000 Peugeot cars for domestic use and exports. In October 2018, Mitsubishi Motors announced plans to increase the production capacity of its plant at Bekasi, West Java (Indonesia), from 160,000 units to 220,000 units by 2020.

• The automotive industry in ASEAN is expected to present significant opportunities to the steel industry in the near future. This, in turn, is likely to boost the demand for ferroalloys for use in steelmaking in ASEAN during the forecast period.