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Seasoning "Three Brothers"
After the advent of converter steelmaking, the output of steel increased greatly and the price decreased obviously. At the same time, during the period when a large number of railways were built, the number of rails increased sharply, but rail breaking accidents were also common. In order to find out the reason, experts have strengthened their research on the internal structure of steel. The milestone event was in 1860, when the British scientist H.C.Sorby observed the section of steel for the first time with a high-power microscope, which opened the door for understanding the microstructure of steel and provided accurate and effective scientific guidance for ferroalloys to improve or improve the properties of steel in different aspects.
Ferroalloy is an alloy compound formed by combining one or more elements with iron, and it is an essential auxiliary material for modern steelmaking, accounting for 2%-4% (20-40 kg) of the output of tons of steel. According to the different requirements of steelmaking, there are hundreds of ferroalloys, among which the output of silicon, manganese and chromium is the largest, accounting for more than 90% of the total output of ferroalloys. Therefore, silicon, manganese and chromium are called "three brothers of seasoning", and they deserve it. Because the purification of "Three Brothers" is difficult and costly, and it is used in the form of iron compounds, its function is almost the same as that of pure products, and its use cost is greatly reduced, so "Three Brothers for Seasoning" mostly exists and is used in the form of ferrosilicon, silicomanganese, ferrochromium and other alloys.
Ferroalloy was originally used as a deoxidizer to remove excess oxygen during steelmaking. At present, the most commonly used deoxidizers in ironmaking are ferrosilicon and ferrosilicon-manganese alloy, which are two kinds of ferroalloy futures traded in Zhengzhou from 2065438 to August 2004.
Moreover, after adding ferroalloy in steelmaking, through the study of the microstructure of steel, it is found that the alloying elements remaining in steel also adjust the chemical composition of steel and improve the physical properties of steel, so ferroalloy can also be used as alloying agent. Among them, manganese, the effective component, can increase the strength and hardness of steel, and its role in steelmaking is irreplaceable. There is a saying that "no steel can be produced without manganese"; Silicon can improve the elasticity and tensile strength of steel, and also enhance the magnetic permeability of steel. Chromium can make steel have good corrosion resistance and wear resistance, and is an important raw material for producing stainless steel.
At present, the most widely used ferrosilicon is FeSi75-B ferrosilicon, referred to as 72# ferrosilicon; The most widely used manganese silicon is FeMn68Si 18 ferromanganese, referred to as 68 18# manganese silicon; The most widely used ferrochrome is FeCr55C800, or Cr60 ferrochrome for short. For ferrosilicon and silicomanganese alloys listed and traded on Zhengzhou Commodity Exchange, standard delivery products are the two most widely used categories (see the table below).
Zhengzhou Commodity Exchange Ferrosilicon Futures Contract Table
Source: Zhengzhou Commodity Exchange
Table Mn-Si-Fe alloy futures contract of Zhengzhou Commodity Exchange
Source: Zhengzhou Commodity Exchange
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Manganese-silicon alloy has the properties of both manganese alloy and silicon alloy, and the production cost is close, so the production and application of manganese-silicon alloy are more.
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The foundation of ferroalloy enterprises
Because ferroalloy is mainly used as deoxidizer in steelmaking, the variety and quality of ferroalloy are not high at first. Initially, ferroalloys with high carbon and low alloy content, such as ferrosilicon, ferromanganese and ferrochrome, were produced by blast furnace with basically the same production process as ironmaking. A. Persel, a Frenchman, is a pioneer in industrialized production of ferroalloy blast furnace. With the continuous improvement of steel consumption and quality requirements, ferroalloy produced by blast furnace method can no longer meet the actual demand of steel. After the birth of the electric power industry, Muwasan and others used electric furnaces to produce high-quality ferroalloys such as ferrosilicon, ferromanganese and ferrochrome from 1890, which pioneered the production of ferroalloys by electric furnaces and continues to this day. Nowadays, the electric furnace method has basically replaced the blast furnace method and become the main production method of ferroalloy.
There are some differences between ferroalloy electric furnace and steelmaking electric furnace in structure, but the basic principle is similar. Both electrodes (usually graphite) are inserted into the furnace and melted by arc heat after being electrified. Because smelting ferroalloy needs a lot of heat, it also needs a lot of electricity, so it is a big user of electricity. Therefore, in addition to raw materials, rich and cheap power resources are the "foothold" for ferroalloy enterprises to build factories and produce.
Historically, France was the main producer of early ferroalloys, and Norway became the largest exporter of ferroalloys in the 1980s and 1990s, all based on the abundant local hydropower resources. Ferroalloy production in China is mainly concentrated in Guangxi, Inner Mongolia, Guizhou, Hunan, Sichuan, Ningxia and other areas with relatively low electricity prices. 2017.6 million tons of ferroalloys are produced in these six regions, accounting for about 54% of the total output of ferroalloys in China, which is the focus of spot supply and futures market of ferroalloys in China.
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Generally, high-carbon ferroalloys with low requirements, such as ferrosilicon, high-carbon ferromanganese, ferromanganese and high-carbon ferrochromium, are produced by reducing electric furnace (submerged arc furnace) method, while low-carbon ferroalloys with high requirements are produced by refining furnace method.
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"Competition to attract relatives" market
Generally speaking, steel mills occupy a dominant position in ferroalloy pricing. Before the ferroalloy futures of Zhengzhou Commodity Exchange were listed and traded, "bidding to pull the relationship" was the main pricing model of domestic ferroalloy market. Under normal circumstances, according to the production needs, steel mills conduct bidding and purchasing from ferroalloy manufacturers or sellers from time to time. The bidding price is mainly determined by steel mills, and "competitors" can only decide whether to accept the bidding price of steel mills or compete at a lower price according to the market and their own production and operation conditions. In the end, the winning bidder with high quality and low price signed a sales contract with the steel mill. Steel mills often trade by deferred payment methods such as cash on delivery, letters of credit and acceptance bills, which is unfavorable to the winning bidder. Therefore, the introduction of ferrosilicon and ferromanganese alloy futures is self-evident for ferroalloy supply-side enterprises to balance market pricing power and avoid risks.
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Steel mills usually bid for ferroalloys in ten days or one month.