Silico Manganese Market

The global silico manganese market is projected to witness healthy growth during the forecast period, 2019–2025. The prominent factor favoring the growth of the global market is the increasing demand for silico manganese in the production of steel. The increasing use of steel in the major end-use industries such as automotive and building & construction, coupled with the healthy growth of these industries is expected to support the growth of the global market during the forecast period. Likewise, widespread use of silico manganese slags in the construction industry in the production of coarse aggregates and concrete pavements, is expected to be the other prime factor driving the growth of the global market during the forecast period. However, the high production cost of silico manganese and price fluctuations of manganese ore, is likely to restrain the growth of the global market during the review period. Nevertheless, the projected rise in demand for silico manganese in the emerging economies of Asia-Pacific and Middle East & Africa is expected to create lucrative opportunities for the manufacturers of silico manganese in the near future.

Silico manganese is one of the key elements used in the production steel, where it is used as a deoxidizer and an alloying element. The standard grade ferro-silico manganese contains 14 to 16% of silicon, 65 to 68% of manganese, and 1 to 2.5% of carbon. Special grades with up to 30% silicon are used to manufacture stainless steel. Silicon and manganese play an important role in defining the properties of steel, depending on the amount added and the combined effect with other alloying elements. Silicon and manganese have a strong affinity for oxygen and act as deoxidizers. Deoxidation with SiMn results in cleaner steel, as the liquid manganese silicate formed coagulates and separates easier from the melt, compared to solid SiO2 formed during FeSi deoxidation.

The increasing demand for steel in major end-use industries such as automotive, building & construction, and shipbuilding is one of the key factors driving the demand for silico manganese. The product has applications in manufacturing different types of steel, such as alloy steel, stainless steel, and carbon steel. The presence of iron ore in abundance across the globe, coupled with the intensifying demand for various steel grades owing to lack of feasible substitutes, is likely to provide a boost to the silico manganese market in the coming years.

Automobile production across the globe surpassed 100 million units in 2018; it grew by around 4% per year from 2015 to 2017. This is mainly due to the increased production in emerging economies, such as China, India, and Mexico. The advancements in the automotive and heavy-duty industries to fulfill the current demand and future requirements of consumers have led to the development of innovative and safe components used in automobiles.

The demand for steel is increasing in multiple applications, including mechanical engineering, home appliances, and automobiles. The growing automotive industry, with an increase in automobiles production and new car registration, is consequently expected to drive the demand for steel at a significant rate. According to the German Association of the Automotive Industry (VDA), in 2017, the total number of cars registered in Western Europe was around 14.3 million units, registering a growth of 3% compared to 2016, and 1.3 million units in Eastern Europe.

According to the World Steel Association, steel production across the globe increased significantly since 2010, from 1,433 million tons in 2010 to over 1,800 million tons in 2018.

Thus, the increasing use of silico manganese in steel production is expected to be the primary factor driving the growth of the global silico manganese market during the forecast period.

Developing countries, especially in Asia-Pacific, are expected to be potential markets for silico manganese, owing to the diversity in terms of the region’s demographics. The building & construction and automotive industries are the leading industries in developed countries such as Japan, South Korea, Singapore, and Australia and emerging economies, such as Indonesia, India, China, Thailand, Vietnam, and Malaysia. Owing to the healthy growth of these industries, the demand for steel is expected to increase, resulting in an increased demand for silico manganese in the region.

According to the World Steel Association, India is expected to become the world’s second-largest steel-consuming economy, with demand expected to grow by more than 7% in 2020. Infrastructure, as well as residential property construction, coupled with favorable demographics and improving macroeconomic fundamentals, are likely to increase the steel consumption in India. Moreover, with an increased focus on the development of the infrastructure sector, particularly towards housing, power transmission, and the railways, in the Union Budget 2018-19, the growth in domestic steel consumption is likely to continue in the near future. In addition, the port and shipping sector has been growing rapidly, owing to the efforts under the ‘Make in India’ initiative (for instance, the Sagarmala program). The construction and upgrade of ports and other maritime infrastructure is likely to boost the demand for large quantities of steel. As urbanization rates rise in India, the construction industry is expected to continue to support the steel demand in the coming years. Major government initiatives in the construction industry, such as the Pradhan Mantri Awas Yojna–Housing for All initiative, the Sardar Patel Urban Housing Mission, the 100 Smart Cities Mission, and the Urban Infrastructure Development Scheme for Small & Medium Towns (UIDSSMT), is expected to continue to contribute to steel demand during the forecast period.

The demand for steel in the ASEAN region is expected to witness a substantial growth momentum driven mainly by the various government-led infrastructure projects in 2019. According to the Short-Range Outlook by the World Steel Association, the steel consumption in the ASEAN (Indonesia, Philippines, Malaysia, Thailand, and Vietnam) is expected to grow by over 6% in 2020. Moreover, the Philippine government has planned new infrastructure projects to implement in 2020, which is likely to boost steel consumption.

The Middle East & Africa is expected to be the other lucrative regional market for silico manganese during the forecast period. According to the World Steel Association, the steel demand in the Middle East grew by around 2% in 2019 and reached 55.1 million metric tons. In the GCC countries, reforms and a stronger oil market have led to an upward momentum in steel demand. Moreover, the steel demand in the region is likely to continue to benefit from the investments made in preparation for mega-events such as the World Expo 2020 in Dubai and the FIFA World Cup 2022 in Qatar. Furthermore, the demand for steel products across the UAE and the GCC is set to witness an upwards trend, mainly due to several construction projects in the UAE (the Expo 2020 Dubai event). In 2019, the National Committee for the Steel Industry of Saudi Arabia reported that the Saudi market would require over 20 million tons of steel products to meet its current domestic demand, which is expected to boost the production of steel domestically.

The increasing demand for steel in the fast-growing construction sector in the emerging economies of Asia-Pacific and the Middle East & Africa is expected to boost the demand for silico manganese in the production of steel. Thus, the increased demand for silico manganese in emerging economies is expected to create growth opportunities for the players operating in the global silico manganese market during the forecast period.

Silicomanganese (SiMn) is produced by a carbothermic reduction of oxidic raw materials in electric submerged arc furnaces, which are also used as ferro manganese (FeMn) and SiMn alloys. The operation of the SiMn process is, however, more difficult than the FeMn process due to the requirement of higher process temperatures. The size of the SiMn furnace usually ranges between 15 and 40 MVA, with outputs reaching 80–220 tons of alloy per day. During the smelting of silico manganese, the addition of dolomite or calcite to the charge increases the slag basicity, which improves the slag fluidity and facilitates the manganese oxide reduction from the slag. Generally, 500 to 1000 kg of ferromanganese slag is formed during the production of 1000 kg of high carbon FeMn alloy. This slag is often used as a source of manganese in the production of silicomanganese, while some plants use only manganese ore as a source of manganese. The utilization of ferromanganese slag in silicomanganese production increases energy consumption by approximately 500 kWh/t slag. Moreover, the specific power consumption for the production of standard SiMn from a mixture of Mn-ore, HCFeMn slag, and Si-rich metallic re-melts, vary from 3500 to 4500 kWh/ton metal, depending on the amount of metallics added to the feed. The energy consumption increases with the Si-content of the metal produced and also with the amount of slag per ton of SiMn. Each additional 100 kg slag produced consumes an additional 50 kWh of electric energy.

Silico manganese prices are closely related to the price of raw materials and tend to follow similar trends. Raw materials required for the production of silicomanganese are manganese ore, coke, silica, and electricity. In recent years (2016–2019), there have been significant fluctuations in the prices of manganese ore, which is a key raw material for SiMn production. The manganese ore price in December 2016 was USD 7.75 per metric ton, which decreased to USD 4.23 per metric ton in December 2017. The price rose to USD 6.51 per metric ton in December 2018 and later reduced to USD 4.56 per metric ton in December 2019. These fluctuations in prices of manganese ore are closely linked to the costs of silico manganese, hampering the growth of the overall market. Moreover, the manganese ore used to produce ferroalloys contain trace amounts of mercury, which is emitted during the smelting process. These mercury emissions are derived primarily from the manganese ore, while there may be trace amounts in the coke or coal used in the smelting process. These emissions can exist in three forms, namely, elemental, oxidized, and particulate. While some of the mercury in particulate and oxidized forms is captured by the particulate control devices, the more volatile elemental mercury is primarily emitted to the atmosphere, which causes severe environmental degradation.

Thus, the high production cost and raw material price fluctuations are expected to restrict the growth of the global silico manganese market during the forecast period.