Ferrosilicon is widely applied in the steel industry, foundry sector, metallic magnesium production and other fields. As major consumers of ferrosilicon, these industries consume more than 90% of the annual ferrosilicon output. Ferrosilicon produced in China can not only satisfy domestic demand, with a small proportion exported to other countries. At present, the global annual production capacity of ferrosilicon stands at around 11.1 million tons, among which China’s capacity reaches approximately 8 million tons, making China the world’s largest producer. In 2020, China’s ferrosilicon output hit 5.3209 million tons, representing a slight year-on-year decline. Inner Mongolia and Qinghai are China’s core ferrosilicon producing regions. Ferrosilicon demand mainly comes from steel mills, metallic magnesium manufacturers, foundries and export markets, with steel mills accounting for the largest share of domestic ferrosilicon consumption.

With the growing large-scale production of ferrosilicon, it has become a vital material for industrial manufacturing and the steel industry, especially steelmaking. After years of development, the ferrosilicon industrial chain has become increasingly complete, forming a mature operational system covering raw material mining, ferrosilicon smelting, as well as ferrosilicon processing and application. Currently, China has five major ferrosilicon producing regions: Inner Mongolia, Ningxia, Qinghai, Shaanxi and Gansu. The Inner Mongolia Autonomous Region ranks first in national ferrosilicon output, contributing about 33% of China’s total ferrosilicon production.

Ferrosilicon production capacity is becoming increasingly geographically concentrated. New investors in the industry are expanding capacity in regions with larger environmental carrying capacity. Ferrosilicon electric furnaces are trending toward large-scale development and waste heat power generation. To further tap energy-saving and emission-reduction potential, cut power consumption and enhance corporate competitiveness, leading ferrosilicon enterprises are adopting large-scale furnaces combined with mature waste heat recovery and power generation technologies. Building waste heat utilization facilities and generating power from furnace waste heat will become a new industry norm in the future.

In the next three to five years, grain-oriented silicon steel is unlikely to be replaced by amorphous strips, with its market prices still led by Baowu Steel. Wangbian Electric stated that it keeps upgrading and revamping high-cost equipment such as bell furnaces to reduce power and operational expenses, expecting an annual processing cost reduction of 3% to 5%.

Technological innovation will determine the future of the ferrosilicon industry. Only through continuous technological upgrading can the industry lower energy consumption and pollutant emissions, and build a sound industrial ecosystem, which underpins healthy and sustainable development. Long-term growth relies on large-scale, intensive and sustainable operation for enterprises to expand and strengthen their presence. Currently, the industry shows an obvious capacity concentration trend. New industrial capital is deploying and expanding ferrosilicon capacity at home and abroad in regions featuring greater environmental capacity, lower labor costs, abundant labor resources, cheaper electricity prices, sufficient energy resources and great potential for developing photovoltaic and wind power. Leading enterprises are poised for further expansion, which is expected to further raise the overall concentration of the ferrosilicon industry.