The gloomy economic tone at the conference was compensated by the large numbers of delegates in attendance and cheerful networking.
1. Slow growth in China
Slow growth in China continued to spook market participants. Those who have recently returned from trips there shared anecdotes and photographs on social media of blue skies and a lack of cranes and active construction sites, while remaining acutely aware of the importance of the world’s second-largest economy. Find out more about this evolving market at Fastmarkets Ferroalloys Asian Conference 2024. Learn more.
“China gives the direction; it’s the captain,” one ferro-chrome market participant told Fastmarkets on the sidelines of the conference.
2. High electricity prices
Even though electricity prices have come down, they were still extremely high historically and at the forefront of people’s minds, making up a huge portion of input costs. This made sellers reluctant to reduce prices despite subdued demand, leading to suggestions of production cuts in various markets.
3. Potential growth in India
There was a lot of potential for growth in India’s domestic market, but we should not expect it to be the ‘next China.’
“[The economy of] India needs to grow by 10% to offset China dropping by 1%, to keep global steel production stable,” Kevin Fowkes, research director at global consultant Wood MacKenzie, told delegates while speaking on the manganese ore and alloy panel on Monday afternoon.
4. Global uncertainty
Delegates were still wading through exceptionally high levels of uncertainty in geopolitics and macro-economics, with high interest rates and inflation forcing them to rethink trading strategies.
Legislative changes in Europe, in the form of the Carbon Border Adjustment Mechanism (CBAM), added another layer of complexity, with few people understanding what it meant for them, and how and even whether it will work.
“The reporting periods are coming soon, and the [levels of reported emissions] are going to be horrendous,” one financial source told Fastmarkets on the sidelines.
5. Mine depletion
Mine depletion remained a long-term concern, with the manganese content of ore from various origins expected to reduce over the next few years.
Fastmarkets heard that these declining grades could mean “higher costs and a greater environmental burden,” Jack Bedder, founder of data provider Project Blue, told delegates from the manganese panel. But, if it were economical, the sintering of fines could be an alternative method to upgrade lower-content ores, industry sources said.
6. Decarbonization
Decarbonization by 2050 would not be achieved without offsets and there were significant trade-offs, such as balancing the need for greener reductants against wider environmental degradation.
One example of this would be making sure that the replacement of coke with green alternatives, such as acacia and bamboo chips, did not lead to deforestation.
