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(Publishing-NewsWire.com, September 27, 2021 ) Global Ferrochrome Market size is forecast to reach around $25.12 billion by 2026, after growing at a CAGR of 4.2% during 2021-2026. Ferrochrome (FeCr) is an alloy between chromium and iron, generally containing 50%-70% chromium and is used in the production of stainless steel, special steel, and castings. The steel industry is the largest consumer of Ferrochrome, with stainless steel production containing a chromium content of 10-20%. The growing usage of steel to produce high-quality, cost-competitive products that the military uses in various applications ranging from aircraft carriers and nuclear submarines to Patriot and Stinger missiles, armor plate for tanks have increased the demand for Ferrochrome for high steel production, which leads the market growth. Furthermore, the growing demand for stainless steel with high mechanical properties for marine applications is expected to be the driver for the industry growth. The uses of Ferro Silico Chrome and growing adoption of powder metallurgy process helps to reduce the need to use metal removal processes, which in turn, drastically reducing yield losses in manufacture and often resulting in lower costs.
The emergence of COVID-19 the Pandemic
The emergence of COVID-19, which is declared a pandemic by the World Health Organization, is having a noticeable impact on global economic growth. According to International Monetary Fund, the global GDP is expected to decline by 0.3% in 2020. According to World Trade Organization (WTO), global trade volumes are projected to decline between 13% and 32% in 2020 as a result of the economic impact of COVID-19. The pandemic is affecting operations of various industries such as food and beverage, personal care, and others, as most countries have issued “stay at home guidance”. Moreover, it is expected that the outbreak of COVID-19 will be seen in the whole year of 2020, and a few months in 2021. As, Ferrochrome products like stainless steel, chromium, and Ferro Silico Chrome-based are extensively used in these industries, the declining operations of these industries is directly affecting Ferrochrome market growth.
Ferrochrome Market Segment Analysis – By Product Type
The High Carbon ferrochromium, the segment is projected to witness the highest CARG of 6.5% in the Ferrochrome market during the forecast period owing to its carbon reduction properties intermittently outgoing from the furnace. The High Carbon FeCr includes approximately 60 percent of chromium concentration. Thus, the presence of chromium increases overall product hardness, strength, and resistance to oxidation. High Carbon FeCr is produced from ferrochrome minerals in the electric smelting furnace for continuous smelting by using silica as flux and carbon as a reducing agent. The High Carbon FeCr is widely used across construction, transportation, mechanical engineering, and production of industrial pipelines. Thus, the developing transportation and construction industry from the developed and developing region further contribute to the market growth.
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Ferrochrome Market Segment Analysis – By Application
The stainless steel segment held the largest share of more than 70% in the global market in 2020. Over 70% of the global Ferrochrome is used in the production of stainless steel that is defined as a steel alloy with a minimum of 10% chrome by content, the average chrome content being 18%. The growing uses of powder metallurgy process in order to reduce overall manufacturing cost further drive the market growth. The construction and transportation sector are the major driving factors of the steel market, as they consume two-third of the global steel production. In the forecast period developing economies will generate a huge demand for the steel market, due to increasing in construction and infrastructural development, which in turn drives market growth.
Ferrochrome Market Segment Analysis – By Geography
Among the regions, the APAC region held the largest share of more than 45% in 2020 followed by North America and Europe. The growing disposable income, rise in population, and the growth of the construction, aviation, and automotive industry propels the growth of this market in the APAC region. In addition, the presence of emerging economies such as China and India across the region also contributes to the market growth across the APAC region. The developing aviation sector in the Chin and India are also propelling the demand for stainless steel, chromium, or Ferro silico chrome, which in turn drive the growth of this market across the region.
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Ferrochrome Market Drivers
Increasing investments in infrastructure projects
Construction industry is the major end-use sector of stainless steel, accounting for more than 50 percent of steel consumption. Structures like houses, skyscrapers, bridges, tunnels, and more rely on steel for their strength. Residential, non-residential and new infrastructure projects, such as bridges and airports, railway stations along with the growth of commercial/industrial businesses are driving the need for high-strength steel. New rail projects, such as High Speed 2 Phase 1, Moscow – Kazan High-Speed Line, Ostlänken Phase 1, Brisbane Cross River Rail, Rail Baltica, Texas Central Railway, Dongguan Line 3, Delhi Metro Phase 4, Bangkok Padang Besar, Shatin Central Link, and Alexandria Aswan HSL, are expected to drive high strength steel demand, which will increase Ferrochrome consumption in the steel industry. According to the OECD report, the Infrastructure spending in India was valued at $10 billion in 2018 which presents numerous growth opportunities for high strength steel in construction activities.
Increasing demand for high strength steel for manufacturing machinery tools
Machinery cover a wide range of equipment from small workshop tools to large factory-based robotic machinery and rolling mills which are used across various industries that includes construction equipment such as cranes, drills, bulldozers, scaffolding, and reusable and portable shelters used on construction sites. Steel is essential in our modern world. Products around us are either made of steel or made from a machine made of stainless steel. It is estimated that approximately 14 % of global steel is used to making machinery. Machinery manufacturing is one of the largest, complex, and most competitive sectors, which require a wide range of objects with diverse requirements to face present tougher challenges. Ferrochrome when used for the manufacturing steel offers the end product with reduced risk to be susceptible to corrosion as well as increases the overall tensile strength of the end product. Therefore, the use of Ferrochrome in manufacturing stainless steel has increased because of the rising demand for high-strength steel from machinery tools. According to the world steel association, the production of steel is increasing every year and is expected to continue in the coming years. As a result steel production growth will increase ferrovanadium consumption. For instance, in 2009, worldwide crude steel production was 1,239 million tons and reached 1,689 million tons in 2017.
Ferrochrome Market Challenges
Stringent regulations on steel production to decrease carbon footprint and VOC emissions
Around one-fifth of the carbon emissions are from industries such as cement, iron and steel, chemicals, and refining. Over the next few decades, this is expected to grow with output. The process of making steel from iron ore involves heating the ore with carbon. Carbon dioxide is produced as a by-product of this process. Stringent VOC regulations on steel processing in various countries in the world are affecting the production of steel. It is one of the major obstacles of the steel market as well as Ferrochrome market. Europe and North America are major regions that are implementing strict VOC regulations. For instance, in Europe, demand for steel is affected by EU regulations related to automobiles. Automobile manufacturers are veering towards aluminum and manganese alloys to produce lighter and more efficient vehicles. In Europe, The European Union is presently using the emissions trading system (EU ETS) as a primary tool to limit climate change. A cap is set on the total amount of certain greenhouse gases that can be emitted by installations covered by the system. Companies can receive or buy emission allowances that they can trade with one another as needed.
Ferrochrome Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Ferrochrome market report Major players in the Ferrochrome Market industry outlook is Eurasian Resources Group, International Ferro Metals Ltd., Merafe Resources Limited, Ferro Alloys Corporation Limited, Middleburg Ferrochrome (MFC), Hernic Ferrochrome (Pty) Ltd, Samancor Chrome Limited, Tata Steel, Mintal Group, IMFA, and Shanxi Jiang County Minmetal Co., Ltd. among others.
In December 2020, Ferro Alloys Corporation (FACOR), part of Vedanta signed a conversion agreement with Tata Steel Mining to process chromium ores. With this agreement, FACOR ramp up its ferrochrome furnace output to capacity.
In the Latin America region, in 2020, Brazil is the major market for Ferrochrome owing to a rise in purchasing power of consumers and developing infrastructure across the country further drive the demand for Ferrochrome.
Stringent government regulations and restriction to curb carbon emission are hampering to the overall market growth.
Unstable economic conditions and the covid-19 outbreak may cause a major hindrance to the overall market growth.
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