The U.S. tariff policy is directly pushing the production cost of the high-speed ferroalloy industry through the transmission effect of the global industrial chain:

 

Raw material prices have skyrocketed: As the core raw materials for ferroalloy production, the prices of commodities such as manganese ore, chrome ore, and silica have risen significantly. Among them, the price of manganese ore in South Africa rose by 8% compared with before the announcement of the tariff policy, and the price of chrome ore in Australia rose by 5%, directly pushing up the production cost of mainstream ferroalloy varieties such as silicon manganese and high-carbon ferrochrome by 100-200 yuan/ton.

 

Energy cost superposition: U.S. energy policy adjustments have caused international oil prices to exceed $80 per barrel, pushing up global natural gas prices. The energy cost of China's ferroalloy industry accounts for about 30-40%, and the rise in natural gas prices has increased the production cost of some enterprises by 5-8%.

Surge in logistics costs: As some ferroalloy companies choose to bypass alternative routes such as the Cape of Good Hope, international shipping costs have risen by 20-30%, further exacerbating cost pressures.

 

Supply and demand structure: short-term imbalances in the global ferroalloys market

The changes in the trade pattern caused by tariff policies are leading to a short-term imbalance between supply and demand in the global ferroalloy market:

 

China's exports are blocked: The United States is an important export market for China's ferroalloys, and China will export about 500,000 tons of ferroalloys to the United States in 2024, accounting for 12% of its total exports. After the implementation of the tariff policy, China's ferroalloy exports to the United States are expected to drop by 30-50%, and some companies face the risk of losing orders.

Regional market differentiation: The demand for ferroalloys in the European Union, Southeast Asia and other regions has remained stable, but due to the blockage of China's exports, some companies have begun to turn to these markets, resulting in intensified competition in the regional market. At the same time, ferroalloy companies in Russia, India and other countries may take the opportunity to expand their market share.

Rising inventory pressure: China's ferroalloy industry inventory has been at a historical high, and tariff policies have led to export blockages, further increasing domestic inventory pressure. Some companies may be forced to cut production, and the industry operating rate is expected to fall by 5-10%.

 

Regional pattern: The restructuring of the global ferroalloy industry chain is accelerating

U.S. tariff policy is accelerating the restructuring of the global ferroalloy industry chain, and the trend of regionalization is becoming increasingly obvious:

 

Rise of nearshoring: Some U.S. steel companies may choose to establish ferroalloy production bases in neighboring countries such as Mexico and Canada to avoid the impact of tariff policies. This will lead to a shift in global ferroalloy production capacity to the Americas.

Asian industrial chain integration: Asian countries such as China, Japan, and South Korea may strengthen regional industrial chain cooperation, reduce costs and improve industrial chain resilience through signing long-term supply agreements and joint procurement.

Driven by technological innovation: In the face of rising costs and intensified market competition, ferroalloy companies will increase investment in technological innovation, promote production process upgrades, and improve product quality and added value. For example, new reduction technology, waste heat recovery technology, etc. are used to reduce energy consumption.