Consumption of ferrosilicon for steel production during the Q1 (January to March) of 2012 was 88,785 tonnes, largely down by 16.7% YoY from 106,524 tonnes as consumed in the same quarter of 2011 reflecting the drop in crude steel production during the Q1 of 2012 compared to the year ago quarter from 26.567 million tonnes to 27.704 million tonnes, down by 4.1% YoY.

The difference between the drop in percentage of ferrosilicon consumption and the same of crude steel production can be partly explained by the increase in consumption of silicomanganese despite the drop of steel production. Consumption of silicomanganese in the Q1 of 2012 was up by 1.3% YoY, giving a good contrast with the substantial drop in ferrosilicon consumption.

According to relevant statistics, specific consumption unit of ferrosilicon and silicomanganese in steel production in the Q1 2012 (together with the year ago quarter figure in parentheses) was, ferrosilicon: 3.40 to 3.50 kilogram for 1 tonnes of steel produced (3.71 kilogram), silicomanganese: 2.70 to 2.76 kilogram (2.66 kilogram). These figures show that the mills have been trying to switch to a blend of ferrosilicon and silicomanganese from ferrosilicon only.

The fact that the price of silicomanganese softened while the one for ferrosilicon maintained comparatively firm level is another reason of the switching trend.

Source - TEX Report Limited

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