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Such certification would help because the ferro-alloys industry is quite energy-intensive and is a key target for state-driven green development plans.
China’s National Development & Reform Commission (NDRC) is pushing for at least 30% of China’s ferro-alloys capacity to meet or exceed industry energy efficiency standards, with those plants that are unable to comply likely to be shut down, sources said.
China’s Ministry of Information & Industrial Technology (MIIT) is also offering certification for common and special ferro-alloys plants that achieve green production.
“Companies that have attained the certifications can improve market reputation in market and optimize [their] ferro-alloys brand image,” according to Xiaohua Zhang, a spokesman for south China ferro-alloys smelter Bosai Mining (Group) Co.
And the secretary general of the China Ferroalloy Industry Association, Wanli Shi, said that “six smelters have applied for certification of green products since the specifications were launched.”
Xijie Wang, a spokesman for silico-manganese producer Qunxian, which is based China’s manganese alloy production hub in Inner Mongolia, told Fastmarkets at the end of August that “one of our steelmaker clients expects our alloy products to be green and we feel it is essential for us to take the initiative move to start the application procedure.”
Silico-manganese – which consumes around 3,900 kWh of electricity and 550 kg of coke for one tonne produced – is mostly used by steelmakers for deoxidization and desulfurization.
Green products are mainly for green manufacturing and green procurement.
According to Xiao Bangguo deputy head of the Metallurgical Planning & Industry Research (MPI) organization, “green products are mainly for green manufacturing and green procurement.” For instance, he said, the key construction projects in the XiongAn district, Beijing, require certified green materials, which means that any steelmakers wanting to be involved with the supply contracts for the projects, will need to be assessed in terms of their “green” credentials. And that means the requirement for green certification will spread to upstream raw materials.
Initially, the move will have little impact on ferro-chrome producers, a trader source told Fastmarkets.
“China is still lacking in ferro-chrome and almost all the ferro-chrome is domestically consumed, with little necessity to have any extra costs [associated with] green certificates.”
Ferro-chrome – which requires about 3,600 kWh of electricity and 500 kg of coke per one tonne produced – is an essential ingredient in the production of re-oxidized and corrosion-resistant stainless steel products.
Unlike the oversupplied of manganese alloy market in China, robust demand from stainless mills and insufficient local raw materials mean the fundamentals of China’s ferro-chrome market are extremely healthy and leave little incentive for Chinese ferro-chrome smelters even to consider green certificates, sources said.
In ferro-silicon production, however, green certification is likely to be welcomed, according to a producer source based in Inner Mongolia.
“The implementation of the green ferro-alloys standard can effectively promote ferro-alloys enterprises to improve the level of green manufacturing and their green product supply capacity,” the source said. “As a leading ferro-silicon producer, our company will actively carry out green product certification in the future. And our company, along with other leading ferro-alloys [market participants] have jointly applied for certification for green products.
“Hopefully, ferro-alloys enterprises can rely on the standard to further optimize energy efficiency in the acquisition of raw materials, in producing products and in product use – [thereby achieving] energy savings, cost reductions and efficiency improvements in the medium and longer term.”
To keep up with the green steel discussion and to follow the critical developments in green steel pricing and low carbon steel production, visit our Green Steel Spotlight page.