"Ferroalloys Association": Price and demand for ferroalloys is decreasing in the global market. Georgia expects a decline in exports

access_time2022-08-05 10:30:50

Sakstat reports that ferroalloys are the second among Georgia’s top ten export commodities. In January-June 2022, the country exported ferroalloys worth $295.6 million that is 15.7% of total exports.

In January-June 2021, this export volumes amounted to $186.3 million accounting for 13.5% of total exports.

General Director of Ferro Alloys Producers and Manganese Miners Association  Nugzar Kevlishvili talks about a declining trend in ferroalloys export from Georgia amid a declining demand in the global market as well as prices.

“The ferroalloys production in Georgia does not depend on domestic prices and the economic situation. Unfortunately, the
global ferroalloys market has been experiencing a negative trend in recent months. Due to the situation in Ukraine, no one knows what the situation will be in this market, approach this issue with caution and isn’t stockpiling.

Metal production in Europe decreased, demand for ferroalloys declined that led to a drop in prices,” he says.


China
is the main exporter of ferroalloys in the world, its share is 40.05%. The second is the Netherlands (7.09%) and the third is Japan (6.09%). Then follow the USA, South Korea, Germany, Indonesia, India, Belgium and other countries. Russia and Ukraine account for 1% of the global market share while Georgia's share is even lower.

In August 2022, ferroalloy sprice in Europe fell below $1,400 and stood at $1,300-$1,370 per ton. Since the beginning of the year, the decline has reached 65%. Prices for ferroalloys have fallen sharply in China, India and Japan, in the US one ton costs $ 2 600-2 735.


I n the words of General  Director  of  Ferro Alloys   Producers, the Russian invasion of Ukraine has created an uncertain situation on the ferroalloy market drastically hiking prices.

“In the first quarter of 2022, record prices for ferroalloys were recorded. The war caused panic in the market- i n March, one ton of ferroalloy cost $2,800, later prices began declining and no one knows wh en they will stop falling . T here were periods when in July-August prices for raw materials declin ed but in September began to grow. The situation is not excluded to keep  repeating  itself ,” Nugzar Kevlishvili believes.

Georgian Manganese is the largest producer ferroalloys in Georgia, Rauseloys, GTM Group and Chiaturmanganum Georgia LLC are also major silicomanganese producers despite about twenty small companies operating on the market.

The National Statistics Office reports that ferroalloys from Georgia are exported to the USA, Russia, Turkey, Iran, Brazil, Azerbaijan, Chile, Peru, Great Britain, Spain, Colombia, Kazakhstan, France and Italy. The USA, Russia and Turkey are the largest markets for Georgian ferroalloys.

According to Nugzar Kevlishvili, in the current situation, local production may face a number of challenges.


“Export volumes in the US have also declined. The situation in Russia is also difficult, due to sanctions, it doesn’t export anything, including metallurgical products, thus demand in Russia fell by 40-50%. Georgian ferroalloys were sold to Turkey, but stagnation has decreased metal production there. Everyone is waiting for September, if the situation does not improve, small businesses may have to temporarily close down. Unlike small companies, large companies will easier go through this difficult period, as they are less sensitive to price changes,” he points out.

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