“High export volumes of sustainable steel, particular those that meet low carbon emissions requirements, will push up demand for green ferro-alloys, [including] ferro-chrome, silico-manganese and ferro-manganese,” a ferro-alloys producer source in China said, adding that this will be “especially [true] when destination countries have strict thresholds on carbon emissions in manufacturing.”
China exported 11.18 million tonnes of finished steel in October 2024, up by 3.24 million tonnes, or 41%, from 7.94 million tonnes in October 2023 and closing in on the all-time high of 11.25 million tonnes exported in September 2015, according to preliminary data published by China’s General Administration of Customs on November 7.
“The lofty steel exports have sent Chinese steel products under the spotlight of the globe,” one steel exporter said. “Now, Chinese mills are not only supplying price-competitive products to overseas buyers, but also showing the world [its] advanced technologies and efforts in decarbonation.”
Rising demand for green ferro-manganese, ferro-chrome
The high export of flat steel and stainless steel are providing firm support for green ferro-manganese and green ferro-chrome demand, according to sources.
China’s flat steel exports amounted 55.03 million tonnes in January-September this year, up by 11.58 million tonnes, or 26.6%, from 43.45 million tonnes in the same period last year, according to China’s National Bureau of Statistics (NBS).
And China exported 3.72 million tonnes of stainless steel in January-September, up by 0.61 million tonnes, or 19.8%, from 3.11 million tonnes in the first nine months of 2023, according to Stainless Steel Council of the China Iron & Steel Association.
Ferro-manganese is used for desulfurization in the production of flat steel and ferro-chrome is added to stainless steel during production to provide corrosion resistance, market participants said.
Flat steel and stainless steel widely used by the automotive, shipbuilding sectors and by manufacturers of appliances and other kitchen goods.
Importers of Chinese flat steel or stainless steel increasingly care about the carbon emissions footprint of the whole production process, sources told Fastmarkets.
“If a seaborne importer, especially in a Western country, wants to use green or reduced-carbon steel from China, they will want to know the carbon-emissions data for the upstream raw materials,” the ferro-alloy producer said.
So steelmakers in China are buying green ferro-alloys to ensure carbon-emissions reductions are achieved throughout the supply chain to ensure they can service the level of demand from consumers of their green steel products, sources told Fastmarkets.
“We are considering building a raw materials purchasing system to select ferro-alloy suppliers,” a leading steelmaker source in China said, “and those producing green or reduced-carbon emissions alloys will be on the priority list.”
Green ferro-alloy differentials
Green ferro-manganese differentials in Chinese domestic market were a topic of discussion among smelters and steelmakers, sources said.
“It is difficult to settle on how much the green differential [for ferro-manganese] will be,” a manganese alloy sources said. “Smelters are calculating the cost in producing green ferro-manganese and steelmakers are evaluating how much [of that extra cost] they can shoulder or can pass on to their green steel [customers].”
And the steelmaker source said: “For sure, the differential [for green ferro-alloys] will be realized once end users in non-China markets or in local markets pay premiums for the green steel they purchase.”
And recognizing the trend toward green ferro-alloys in China, Fastmarkets launched differentials and inferred prices for green ferro-manganese and green ferro-chrome at the end of October.
Fastmarkets’ weekly green ferroalloy domestic, ferro-manganese max 7% C, 65% Mn min, differential to FeMn assessment in-whs China, remained at zero yuan per tonne on Friday November 8.
Fastmarkets’ weekly green ferroalloy domestic, ferro-manganese max 7% C, 65% Mn min, weekly inferred price, in-whs China, was 5,700-5,850 yuan ($792-813) per tonne, compared to 5,600-5,800 yuan per tonne on the first pricing session on November 1.
Fastmarkets’ green ferroalloy domestic, ferro-chrome 6-8% C, 50% Cr, differential to FeCr assessment, ddp China, was zero yuan per tonne on November 12.
And Fastmarkets’ green ferroalloy domestic, ferro-chrome 6-8% C, 50% Cr, weekly inferred price, ddp China, was 8,150-8,450 yuan per tonne on Tuesday.
Smelters join wave to produce green products
Chinese ferro-alloy smelters are already able to or expect to soon be able to produce green products to meet the stricter demands for a global clean steel supply chain, driven by market dynamics and policy support, according to sources.
“In producing green ferro-chrome or green ferro-manganese, electricity consumption is [a key consideration, along with] recycling of the waste during smelting,” a ferro-chrome trader source told Fastmarkets. “Many smelters in China have already [embraced the] recycling economy [and are] re-using waste gas, waste water and heat recovery [systems].”
And China’s green ferro-alloy capacity is continuing to rise, with upgrades in technology and an increase in the availability of green power resources, according to market participants.
Chinese government departments are also pushing forward green steel and ferro-alloys developments by setting up related guides and standards along with welcoming more green products.
On November 11, the Ministry of Information & Industry Technology (MIIT) released a guide to carbon footprint calculations and standards, in which the steel industry is included as one of the key industries.
MIIT said the guide aims to help with the management of the carbon footprint of industrial output to promote the “green decarbonization transformation” of a range of industries including steel, non-ferrous, chemical, building materials, new energy vehicles and electronics – all sectors that involve large-scale international trading and that have interrelated supply chains and systems.
So, with the appropriate carbon emissions calculations and standards, Chinese green ferro-alloy products are clearly ready to be exposed to a worldwide audience, the ferro-chrome trader source said.
