Ferrosilicon Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Key Highlights

• Increasing applications for corrosion resistance and growing demand from steel production industries are driving market growth.
• Replacement by other substitutes factor is expected to hinder the market growth.
• Increasing demand from the construction and automotive industries is projected to offer new growth opportunities to industry growth during the forecast period.
• Asia-Pacific dominated the global market with the rising application of ferrosilicon in China and India, mainly in the metallurgy and semiconductor industry.

Ferrosilicon Market Trends

Growing Demand from Metallurgy Industry

• Ferrosilicon is an alloy used for steel and casting production applications. FerroSilicon finds its application in metallurgy, semiconductors, solar energy, and chemicals.
• Ferrosilicon includes a strong relationship with steel production industries. Because of its properties, ferrosilicon is used as a steel deoxidizer and an inoculant in the casting industries.
• The properties of ferrosilicon include corrosion and abrasion resistance, high specific gravity, high strength, high magnetism, hardness, and high-temperature resistance. More than 80% of ferrosilicon is consumed in producing iron and steel.
• Corrosion can reduce strength, decrease surface properties, and resistance to fluids. Overall, it decreases the mechanical and chemical properties of certain materials.
• The demand for corrosion resistance from the construction and automobile industries is growing. Bridges, structural support materials, and automotive bodies need to last long without any effect of corrosion. So, many companies are preferring ferrosilicon in construction and automobiles for better quality.
• In 2021, 961,100 road bridges were built in China, an increase of 48,300 from the previous year. China's road bridges have grown by about 46% during the last 12 years.
• Alloying ferrosilicon with other metals makes the compound useful in producing semiconductors. Semiconductors have a huge demand from the electronics industry. Rapid industrialization and growing demand for electronics have been increasing the use of ferrosilicon in various applications.
• In 2021, semiconductor unit sales reached a historic 1.15 trillion-unit shipments as a result of increases in fab utilization rates far above the normal “full utilization” rate of 80 percent. Additionally, to meet the long-term chips demand, the global semiconductor industry made significant capital investments in 2022, investing more than USD 166 billion.
• According to the Semiconductor Industry Association (SIA), the global semiconductor industry sales was totaled USD 573.5 billion in 2022. China remained the largest market for semiconductors, with sales totaling USD 180.3 billion in 2022.
• Moreover, government policies and incentives in various countries are also providing benefits to improve the global semiconductor research and workforce ecosystem. In May 2021, South Korea unveiled the “K-Semiconductor Belt” strategy aimed at building the world’s largest semiconductor supply chain by 2030. Additionally, in September 2022, the Mexican federal government began to draft a new incentives package to attract semiconductor investment, particularly focused on assembly, testing, and packaging.
• Therefore, the growing demand for ferrosilicon for metallurgy purposes is likely to witness growth in the coming years.

Asia-Pacific Region to Dominate the Market

• Asia-Pacific is expected to dominate the global market owing to the highly developed construction and continuous regional investments to advance the automobile and construction sectors through the years.
• The demand from the construction industry is increasing. According to a study by the Institution of Civil Engineers (ICE), the global construction industry is expected to reach USD 8 trillion by 2030, primarily driven by China, India, and the United States.
• Alloying steel with ferrosilicon includes various properties that enhance their demand in the automotive sector, such as thickness and quality.
• China includes the largest automobile manufacturing base of any other region, accounting for the demand for ferrosilicon in the Asia-Pacific region. According to the China Association of Automobile Manufacturers (CAAM), Chinese carmakers produced 27.02 million units in 2022, up by 3.4% year on year, while sales rose by 2.1% to 26.86 million units.
• Electric vehicle (EV) production and sales in China grew rapidly in 2022, breaking previous records in the year's final month. Sales of electric vehicles increased by 93.4% to 6.89 million units in 2022, a rise of 7.1 million units or a 96.9% year-on-year increase in production.
• Asia-Pacific is the largest producer of electronic components. In recent years, the semiconductors used in almost every electronic device increased the demand for ferrosilicon in producing semiconductors.
• Therefore, the factors above are expected to boost the consumption of ferrosilicon in the Asia Pacific region.

Ferrosilicon Industry Overview

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