Crude and non-stainless alloy steels account for the majority of steel alloy demand, underpinned by the consumption of bulk alloys manganese and silicon. Chromium and nickel, in contrast, are fundamentally driven by stainless steel. Primary alloy consumption in steel is on the brink of breaching the US$100Bn mark over the mid-2020s.
On a market value basis, the stainless steel industry accounted for the clear majority of the value of alloys consumption in 2020. The high value of nickel in particular supports the significant focus on secondary scrap consumption, which itself is the fourth-largest value “alloy” (Cr and Ni) sourced in the industry after primary FeMn, FeNi and FeCr.
Looking at only primary raw material consumption, stainless steel accounted for 45% of the market value in 2020, up from 37% a decade ago. Over the 2020s, Roskill forecasts that the majority of the growth for steel alloys is projected in the stainless steel industry, both in terms of volume and value.
Despite lockdowns and interruptions to supply chains, over the course of 2020, prices of steel alloys fluctuated largely within 10% of the monthly December 2019 price, except for nickel which dropped both above and below that range over the course of the year.
Price rises for all alloys picked up pace in December and into January 2021 with ferrosilicon leading the pack, while ferroniobium was the only alloy to remain below its December 2019 price at the close of the year.
Regionally, the alloy prices in China, which accounts for over half of global crude and stainless steel production, remained relatively flat compared to the western markets, which experienced significantly elevated prices over Q2 2020, as the COVID-19 outbreak caused lockdowns and suspensions in these regions.
Looking forward, a synchronised accelerated recovery in 2021, translating into a sharp rebound in steel production globally, would benefit both bulk and noble alloys.