Ferrosilicon is made from semi-coke, silica, steel chips and other products as raw materials, and is smelted by continuous operation in an open or semi-closed reduction furnace. The main uses of ferrosilicon are deoxidizers and alloying agents for steelmaking, inoculants and nodularizing agents for cast iron, and are also widely used in magnesium metal and chemical industries. At present, the main producers of ferrosilicon are China, Russia, Ukraine, Brazil and Norway, and the main consumers are China, Japan, Russia and South Korea, as well as the rising India and some emerging economies. Steelmaking and iron casting consumes more than 80% of ferrosilicon, especially in the smelting process of crude steel.
Upstream and downstream industry chain of ferrosilicon:
Source: Collation of public information
The cost of electricity accounts for over 60% of the cost of ferrosilicon, and the cost advantage of owning a self-provided power plant is prominent. At the same time, it accounts for a small proportion in the cost of steelmaking, so the downstream can bear the price increase. When producing one ton of ferrosilicon, the power consumption is about 8400-9000 kWh, and the electricity price cost accounts for 80% of the total cost. With the advancement of technology, the current power consumption of producing one ton of ferrosilicon is about 7800-8200 kWh (the power consumption and price of each enterprise are different, and the cost ratio varies). Followed by semi-coke, silica, iron oxide scale and some accessories.
Distribution of ferrosilicon production costs in China：
Source: Collation of public information
As far as the proportion of specific downstream structures is concerned, as a kind of ferroalloy, ferrosilicon is mainly used as a deoxidizer and alloying agent in the steelmaking industry to help obtain steel with qualified chemical composition and ensure the quality of steel. The largest downstream application is the steel industry, accounting for more than 70%, followed by the magnesium metal and foundry industry, as well as export demand.
The proportion of downstream demand structure of ferrosilicon in China：
