Market evolution: Ferrosilicon high silicon (CN 720221) — 2015–2025

Introduction

Ferro-silicon containing more than 55 % silicon (CN 720221) is a critical ferro-alloy used primarily as a deoxidiser and alloying element in steel production. The European Union is structurally dependent on external suppliers for this product, yet the period 2015–2025 reveals significant shifts in both the scale and the geography of that dependence. Total imports fell from roughly 451 000 tonnes (€507 million) in 2015 to about 350 000 tonnes (€470 million) in 2025, while exports contracted even more sharply—from 34 478 tonnes (€55 million) to 19 738 tonnes (€44 million). Against this backdrop of declining volumes, unit prices more than doubled at their peak in 2022, and the trade balance—permanently in deficit—widened to over €1 billion before partially recovering. This report examines three principal dynamics that shaped the market over the decade.

1. Deepening Import Reliance and a Reshuffling of Supplier Geographies

1.1 The EU remains structurally dependent on external ferrosilicon supply

Despite a slight improvement, net import reliance remained elevated throughout the decade, moving from 62.7 % in 2015 to 60.5 % in 2025 (after peaking at 77.3 % in an intermediate year). At the same time, EU domestic production volumes slipped modestly from 191 million kg to 180 million kg (−6.0 %), while production values surged by 72.1 % to €300 million, reflecting higher input costs—most notably energy—rather than volume growth. In other words, the EU has not meaningfully closed its supply gap; it has simply paid more for what it produces domestically.

1.2 Norway consolidates its position while Iceland and Brazil surge

The partner composition of EU imports shifted markedly:

Norway remained by far the largest single supplier and did so with remarkably low volatility (CV = 0.19), benefiting from cheap hydroelectric power that makes its ferro-alloy production cost-competitive. Iceland's meteoric rise (from under €2 million to €88 million) is driven by the same energy-cost logic: Iceland's geothermal and hydropower resources have attracted substantial smelting capacity. Brazil's emergence as the fourth-largest supplier (+666 %) reflects the globalisation of supply chains and Brazil's own abundant hydroelectric resources.

Conversely, Ukraine's share collapsed almost entirely to zero—a direct consequence of the disruption and sanctions following Russia's invasion of Ukraine in 2022. The disappearance of the "unspecified origin" category (−98.3 %) likely reflects improved reporting transparency rather than a genuine trade shift.

1.3 Import concentration has increased, narrowing the supplier base

Import concentration, measured by the Herfindahl-Hirschman Index (HHI) on value, rose from 2 196 to 2 491 (+13.4 %). This places the market in the "moderately concentrated" range by antitrust standards and signals a somewhat less diversified supply base than at the start of the period. A handful of Nordic and Brazilian suppliers now account for a growing share of a shrinking import volume, which could create vulnerability if any single source were disrupted.

2. A Structural Retreat from Export Markets

2.1 EU export volumes have roughly halved

While imports contracted by 22 % in volume, exports fell by 42.8 %—from 34 478 tonnes to 19 738 tonnes. The value decline was smaller in percentage terms (−21.2 %) only because rising unit prices partially offset the volume collapse. The EU's export propensity—the share of domestic output that is exported—dropped from 45.8 % to just 16.7 % (−63.5 %), the single most salient structural shift in the dataset. This implies that the EU's ferrosilicon industry is increasingly oriented toward captive domestic consumption rather than external markets.

2.2 The most dramatic export declines occurred in the United Kingdom and China

The near-total evaporation of UK-bound exports (−89.0 %) is striking given geographical proximity and historical trade ties; post-Brexit regulatory divergence and competitive pressures from Asian suppliers likely played a role. China's drop (−93.1 %) is consistent with China being itself the world's largest ferrosilicon producer—EU exports to China were always marginal and have now dwindled to insignificance.

Only India (+29.7 %) and Türkiye (+8.3 %) registered net gains, though from small bases. India, with its low volatility (CV = 0.20), stands out as the EU's most reliable third-country export market.

2.3 Export concentration has tightened

Export HHI on value rose from 1 244 to 1 664 (+33.8 %). With the UK market effectively lost, the remaining export base is both smaller and more concentrated—increasingly reliant on a handful of destinations (the United States, India, and—to a lesser extent—France's role as an intra-EU redistribution hub).

3. The 2022 Price Shock, Energy Costs, and Partial Normalisation

3.1 The 2022 energy crisis triggered extreme price spikes in ferrosilicon trade

The shock detection analysis identifies three major price shocks all centred on 2022:

These shocks align with the broader European energy crisis of 2021–2022. Ferrosilicon smelting is extremely electricity-intensive, and the surge in European power prices translated directly into higher production costs and, consequently, sharply higher unit prices. Import prices peaked at €2 552/t (versus a 2015 level of €1 126/t), while export prices reached €3 290/t—more than double their 2015 starting point.

3.2 The trade balance widened dramatically before partially recovering

The EU's ferrosilicon trade deficit deteriorated to its worst recorded level of −€1 021 million at the peak of the crisis, before narrowing back to −€426 million by 2025. While this represents a net improvement of 5.8 % relative to 2015, the deficit remains large in absolute terms. The narrowing was driven less by a surge in competitiveness than by the simultaneous decline in import volumes (−22.3 %) and the partial normalisation of prices from their 2022 extremes.

3.3 EU member-state import patterns diverge sharply

Within the EU, the geographic distribution of imports shifted considerably:

The Netherlands, Italy, Belgium and Spain all increased their intake substantially, likely reflecting their roles as consumption hubs or logistics redistribution points. Germany's import collapse (−79.0 %) is the most striking intra-EU shift and is consistent with the broader contraction of German steel output in 2023–2025 amid industrial recession and deindustrialisation concerns. Sweden and Finland—home to major stainless-steel producers—also saw moderate declines.

Netherlands' specialisation in this product (RSCA of 0.48, RCA of 2.87) confirms its dual role as both a significant consumer and a transit country for ferrosilicon entering the EU market.

Conclusion

The 2015–2025 period for EU trade in high-silicon ferrosilicon (CN 720221) tells a story of contraction, geographic reorientation, and price turbulence. The EU's structural import dependence, while marginally reduced from ~63 % to ~61 % net import reliance, has proven durable. The supplier landscape has undergone a tectonic shift: Ukraine has vanished as a source, Iceland and Brazil have surged, and Norway has consolidated its lead—all three benefiting from competitively priced electricity. On the export side, the EU's role has diminished sharply, with export propensity collapsing from 46 % to 17 % of production, and the loss of the UK market is emblematic of a broader competitive retreat. The 2022 energy-price shock left deep scars on the trade balance and revealed the vulnerability of an electricity-intensive industry to energy-market volatility. Looking ahead, the key risks centre on continued import concentration, the energy-cost competitiveness of EU-based smelters, and the potential for further disruption should any of the now-dominant Nordic or Brazilian suppliers face production constraints.