From the perspective of national environmental protection, my country will gradually increase the elimination of backward production capacity in the future. This is a matter of pros and cons for the ferroalloy industry. The elimination of production capacity will definitely increase the share of the ferroalloy market, and product spot resources If it is reduced, the transaction price will increase, but in terms of disadvantages, in order to meet the national standard for normal production, new equipment must be introduced. Production costs, while the price suppression in the downstream market is still severe, and companies will be forced to stop production when they are losing money.
At present, the large-scale suspension of production and maintenance in the ferroalloy industry is partly due to the influence of the industry, and the other part is because the company has no profit at all, the factory has no orders, and the manufacturers that are forced to suspend production also account for a large part of the recent suspension of production and maintenance.
The four provinces of Hebei, Jiangsu, Inner Mongolia, and Xinjiang that have been inspected for this environmental protection all have high-carbon ferrochrome smelters distributed, and the total production capacity accounts for about 50.82% of the country’s total. According to Mysteel research, as of the 13th, Inner Mongolia and Xinjiang have been greatly affected by environmental protection. Among them, Fengzhen, Huade, and Bayannaoer areas in Inner Mongolia have all entered the inspection, but because some enterprises have entered the routine maintenance stage ahead of schedule, the impact of environmental protection has been weakened.
Ferrochromium smelters in other regions have not yet been inspected by the environmental protection inspection team, and production is mainly affected by the epidemic. Since March, the prevention and control of the epidemic has been tightened, and measures such as road closures, nucleic acid, and “yellow codes” have been adopted in many places. It is difficult for raw materials and products to enter and exit factories. Enterprises have reduced production and stopped production, and some companies that plan to resume production have chosen to postpone production.While ferrochrome enterprises are under environmental protection supervision, downstream stainless steel enterprises are also restricted by the epidemic prevention and control, and the transportation of raw materials and finished products is not smooth. In the short term, the output of ferrochrome will drop slightly. It will obviously drive the price of ferrochrome to rise. After the epidemic situation in downstream areas eases, if the output of ferrochrome remains low, the ferrochrome market will be driven by demand at this time, and there will be a certain increase.