To find out the true reasons of changes in the dynamics of production indicators of the most commonly used ferroalloys, and generally, with regard to the peculiarities of the ferroalloys’ production process, the following indicators were taken into account in our analysis:
- Manganese ores’ output (mining) figures, because manganese ores are one of the major resources of raw materials for the production of the most commonly used ferroalloys;
- Chemical industry’s figures, because the resources of Chemical industry are also used in production of ferroalloys.
- Steel industry’s figures, because ferroalloys are mainly used in the production of steel and alloys. The ferroalloys impart distinctive qualities to steel and cast iron or serve important functions during production and therefore, are closely associated with the iron and steel industry, the leading consumer of ferroalloys.
· Manganese ores – natural mineral formations, the manganese content of which is sufficient for a cost-effective extraction of this metal or of its compounds.
The most important ore-forming minerals are pyrolusite (63,2% Mn), psilomelane (45—60% Mn), manganite (62,5% Mn), vernadite (44—52% Mn), braunite (69,5% Mn), hausmannite (72% Mn), rhodochrosite (47,8% Mn), etc.
The ores, which contain less than 80% of pyrolusite, are called metal ores and are used in steel industry. The ores with low iron content (no more than 5% of iron) are processed to produce manganese concentrate, from which the metal manganese, low-carbon and pure ferromanganese are produced. Higher iron content ores are used for production of ferrosilicomanganese.
The extraction of manganese ores is carried out mainly by open-pit mining technique with the use of highly productive excavators. The enrichment of ores is carried out by gravity separation, magnetic-gravity separation or flotation methods. Obtained manganese ore concentrates are distributed by grades depending on the manganese content. The highest grades contain 45-49% of manganese.
|· Manganese concentrate is the main raw material for the production of the most widely used ferroalloys: ferromanganese, ferrosilicon and ferrosilicomanganese.|
|· Ferroalloys are the alloys of iron with other elements, used mainly for deoxidation and alloying of steel. They are obtained from ores or concentrates in electric arc furnaces (EAF) or blast furnaces. In terms of production volume ferroalloys are divided into so-called “large” and “small” ferroalloys.
|· Ferrosilicomanganese is a brittle alloy of iron, manganese and silicon, obtained by redox reaction. It is used in metallurgy as a deoxidization and desulphurization agent for production of a liquid steel. It makes iron-based alloys strong, highly durable and shock-resistant. As an alloying additive it has a grinding effect on the structure of steel and increases the depth of calcination.|
The output volume of non-ferrous metal ores, in value terms, in the period 2012-2016, demonstrates positive dynamics (Figure 1). In 2016, the volume of non-ferrous metal ores amounted to KZT 794.4 billion, and it became the record sum for the last five years. The YoY change, compared to 2015, was 31.6%. The growth for the period 2012-2016 accounted for 63.1%, and the average YoY increase was 13.8%.
The growth in 2015-2016 occurred due to an increase in output volumes (in physical terms) mainly of the following types of non-ferrous ores: lead concentrate (+191.8%), copper ores (+79.3%) and a lead in lead concentrate (+73.7%). In the same period, output volumes of manganese ores and concentrates, which are the main raw materials for the production of ferromanganese and ferrosilicomanganese, on the contrary, decreased by 3.5% and 19.2% to 1,569.4 thousand tons and 497.6 thousand tons, respectively (Figure 2).
The output volume of non-ferrous ores for 9M2017, in value terms, reached the amount of KZT 689.3 billion that is 19% more than in 9M2016 (Figure 1). While, in the same period, the output volume of manganese ores, in physical terms, decreased by 3.9% to 1,194.4 thousand tons, and the output volume of manganese concentrates also decreased by 5.2% to 368.5 thousand tons (Figure 2). It is worth to mention that the output of non-ferrous ores is way beyond the output of ferrous ores in Kazakhstan (Figure 1). The output of non-ferrous ores in country’s total output volume of metal ores accounts for 80.3%, and the output of ferrous ores – 19.7% (an estimate for 2016). The share of non-ferrous ores in total volume of mining industry of Kazakhstan accounts for 8.5%, the share of metal ores – 2.1% (an estimate for 2016).A steel industry, to which the production of ferroalloys belongs, also demonstrates a positive dynamics in the period 2012-2016 (Figure 3). Same as in the sector of non-ferrous ores, 2016 became the record year for a steel industry – its output volume, in value terms, amounted to KZT 1,134.2 billion that is 46.6% more than in 2015. The growth occurred mainly due to the increase in production (in physical terms) of flat steel (+16%), pipes and hollow seamless profiles (+11.5%), as well as of the cast iron (+11.2%). The growth for the last five years has been 80%. The similarity in dynamics of the sector of non-ferrous ores and its “consuming” sector – steel industry, visually demonstrates the correlation between those two sectors. It means, possibly, the increase in output of non-ferrous ores has caused the production growth in steel industry.
The physical production volume of ferroalloys in 2016 amounted to 1,816.2 thousand tons, which is 4.3% higher than in 2015 (Figure 4). That growth was due to the increase in production of ferrosilicochromium by 26.6% to 94.5 thousand tons, and ferrochromium by 7.8% to 1,525.2 thousand tons. The production volume of ferrosilicomanganese, on the contrary, reduced by 23.3% to 125.9 thousand tons.In 9M2017, compared to the corresponding period of the previous year, the production volume of a steel industry grew by 39% to KZT 1,127.5 billion (Figure 3). The growth resulted from the increase in production almost of all steel industry products, including ferroalloys. In 9M2017, production of ferroalloys increased by 8.8%, and amounted to 1,454.4 thousand tons, due to the increase in production of ferrosilicomanganese by 10.1% to 101.1 thousand tons, and ferrochromium – by 9.5% to 1,227.2 thousand tons (Figure 4). The Statistics Committee does not provide the information on production of ferrosilicochromium for 9M2017 and 9M2016.Comparing the dynamics of the output of manganese ores and the dynamics of production of ferroalloys, ferrosilicomanganese in particular, we again observe the correlation of those two sectors: the fall is observed both in dynamics of manganese ores and ferrosilicomanganese, despite the rise of ferrosilicomanganese in 9M2017.Traditionally for Kazakhstan, production volumes of a steel industry are far lower than of a non-ferrous industry (Figure 3). The share of a steel industry in metallurgical industry of the country is 33.6%, the share of a non-ferrous industry is 66.3%. The shares of both industries in manufacturing industry of the Republic are 14.1% and 27.8%, respectively.In the chemical industry for the period 2012-2016 there is also a growth (Figure 5). For the observed period of five years the increase was 59%, and for the last year (YoY change) – 17.8%. In 2016, the volume of production of the chemical industry was KZT 284.6 billion that is the record level, in value terms, for the last five years. In 9M2017 the production volume increased by 13.5%, and amounted to KZT 236.5 billion. We suppose that the increase in production volume of the chemical industry has impacted the steel industry production and, particularly, the production of ferroalloys.
Among all the types of ferroalloys produced in Kazakhstan the largest share belongs to ferrochromium – 84% (the share in 2015 – 81.2%) (Figure 6). The production of other alloys, particularly of ferrosilicomanganese and ferrosilicochromium far below the production of ferrochromium. However, their shares in production structure stand out amidst other types of ferroalloys – 6.9% (2015 – 9.4%) and 5.2% (2015 – 4.3%), respectively. Other ferroalloys account for 3.9% (2015 – 5.1%) of the ferroalloys’ production.Considering quite a positive dynamics of ferroalloys’ production in recent years, it is reasonable to expect positive results of production by the end of this year. Our outlook for the volume of production of ferroalloys by the end of 2017 is no less than 1,890 thousand tons in physical terms.
Among all the types of ferroalloys produced in Kazakhstan the largest share belongs to ferrochromium – 84% (the share in 2015 – 81.2%) (Figure 6). The production of other alloys, particularly of ferrosilicomanganese and ferrosilicochromium far below the production of ferrochromium. However, their shares in production structure stand out amidst other types of ferroalloys – 6.9% (2015 – 9.4%) and 5.2% (2015 – 4.3%), respectively. Other ferroalloys account for 3.9% (2015 – 5.1%) of the ferroalloys’ production.
Considering quite a positive dynamics of ferroalloys’ production in recent years, it is reasonable to expect positive results of production by the end of this year. Our outlook for the volume of production of ferroalloys by the end of 2017 is no less than 1,890 thousand tons in physical terms.
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Published by Rating Agency of the Regional Financial Center of Almaty (Rating Agency of the RFCA) JSC
 The most commonly used ferroalloys are ferromanganese, ferrosilicon and ferrosilicomanganese. Two of them contain manganese component. The Committee on Statistics of RK provides information only for ferrosilicomanganese, therefore, in this analysis we made an accent on this particular type of ferroalloy.