China cutting ferroalloy capacities

China’s National Development and Reform Commission has decided to close 204 ferroalloys producing companies till the end of this year.
The government is pursuing a policy aimed at consolidation of the industry and increase of the large companies share on the market. Besides, this will help curbing overproduction, reduce energy consumption and pollution of the environment. This time the victims are the electric furnaces less than 5MVA and the blast furnaces smaller than 10cub.m, producing ferromanganese. The total capacity of these enterprises is estimated at about 1.17mtpy, and the capacity of all the furnaces (302 units) - 767MVA
These actions are supposed to have no significant effect upon prices and production volume in the short-term outlook. Thanks to a delay till the end of the year, some producers will have a chance to upgrade their facilities or merge with larger companies in order to avoid shutting down of the company or dismantling of the furnaces. Moreover, low utilization of ferroalloys capacities in China will make up for the decrease of supply attributed to the shutdown of furnaces with low production capacity.
At this moment, the entire capacity of China’s ferroalloy enterprises is estimated at about 20mtpy. This figure is supposed to be abated to 17mtpy by 2010.


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