Market evolution: Ferrosilicon manganese (CN 720230) — 2015–2025

Introduction

Ferro-silico-manganese is a critical ferro-alloy used primarily as a deoxidiser and alloying agent in steelmaking. Over the decade spanning 2015 to 2025, the EU's trade profile for this product underwent a dramatic transformation. Domestic production collapsed by over 80%, imports became the dominant source of supply, and the geographic structure of those imports was substantially reconfigured. Meanwhile, EU exports shrank sharply, unit prices rose significantly, and several notable supply shocks tested the resilience of European supply chains. This report examines these dynamics across three main axes: the structural decline of EU production and rising import dependence, the geographic reorientation of the EU's supplier base, and the price volatility and strategic vulnerabilities that emerged over the period.

1. The Structural Decline of EU Production and Growing Import Dependence

Domestic ferro-silico-manganese production collapsed over the period

The most striking structural change in the EU ferro-silico-manganese market over 2015–2025 is the near-disappearance of domestic production. EU production volume fell from approximately 352,886 tonnes in 2015 to just 62,960 tonnes in 2025, a decline of -82.2%. In value terms, production dropped from €151 million to €70 million (-53.6%), with the peak year (€363 million) occurring sometime between 2015 and 2025. The fact that the value decline is less severe than the volume decline indicates that rising unit prices partially cushioned the revenue impact—but could not reverse the underlying structural retreat.

The EU's trade deficit in ferro-silico-manganese widened substantially

As domestic production contracted, the trade balance deteriorated sharply:

The trade deficit grew by over €150 million, driven by the combination of rising import expenditure and collapsing export revenues. While import quantities grew only modestly (+3.5%, from 589,348 t to 610,206 t), their value increased by a quarter due to higher unit prices. On the export side, volumes fell by -66.0% (from 65,238 t to 22,151 t), and even though export unit prices rose by 28.6% (from €879/t to €1,131/t), this was insufficient to offset the volume collapse.

Net import reliance surged from just over 60% to nearly 90%

The net import reliance indicator captures the share of EU consumption satisfied by imports. It rose from 61.5% in 2015 to 87.4% in 2025, a relative increase of 42.2%. Over the full period, it reached as high as 88.8%, confirming that the EU has become overwhelmingly dependent on external suppliers for ferro-silico-manganese. This is a direct consequence of the production decline: with domestic smelting capacity largely gone, the EU now sources the vast majority of its ferro-silico-manganese from non-EU countries.

The EU's role shifted from net exporter to marginal exporter

The export propensity indicator—defined as exports as a share of domestic production—rose from 32.0% to 143.5%. While this may appear paradoxical in the context of falling exports, it reflects the denominator effect: as production collapsed, even the small remaining exports represent a large share of the much-reduced production base. In absolute terms, however, EU exports fell from €57 million to €25 million, and the EU's role as an exporter has become increasingly marginal.

2. Shifting Supply Chains: Geographic Reorientation of the EU's Import Base

Traditional suppliers lost ground while new sourcing countries gained prominence

The geographic structure of EU imports shifted considerably over the period. Among the top seven import partners:

*Countries and territories not specified for commercial or military reasons.

Norway became the EU's single largest supplier by 2025, more than doubling its export value to the EU and reaching €213 million—accounting for a dominant share of EU import expenditure. This likely reflects the role of Norwegian ferro-alloy producers (notably Elkem and other Nordic smelters) that benefit from access to cheap hydropower, which makes their production cost-competitive even as energy costs have risen elsewhere.

Georgia emerged as a major new supplier, with exports to the EU surging by 386.9%. Georgia's ferro-alloy industry, bolstered by competitive energy costs and proximity to EU markets, has clearly capitalised on the retreat of other suppliers.

Ukraine and South Africa, by contrast, saw their positions erode. Ukraine's exports to the EU fell by 35.1%, while South Africa's collapsed by 72.7%. The Ukraine decline is at least partly explained by the disruption of the Russia-Ukraine conflict from 2022 onwards; the shock analysis (discussed below) confirms the impact. South Africa's decline may reflect a combination of domestic industrial challenges (including energy supply difficulties via Eskom), shifting trade relationships, and competition from closer suppliers.

Italy and the Netherlands dominated EU imports, while Spain grew fastest

Among EU member states, the main importing countries in 2025 were:

The Netherlands and Italy together accounted for over €350 million of the EU's import bill in 2025, reflecting their large steelmaking sectors and, in the case of the Netherlands, its role as a major trade hub. Spain more than doubled its imports, consistent with an expanding steel sector and the consolidation of domestic ferro-alloy consumption through Atlantic supply routes. Germany and Poland, by contrast, saw modest declines, potentially reflecting restructuring in their steel industries or a shift toward intra-EU sourcing.

Specialisation patterns reveal a concentrated production landscape within the EU

The revealed symmetric comparative advantage (RSCA) analysis for 2025 shows that very few EU member states retain any meaningful specialisation in ferro-silico-manganese:

The Netherlands is the clear leader, with an RCA of 3.97 and controlling 57.6% of EU production. Slovakia and Italy hold secondary positions. Notably, several member states (Slovenia, Romania, Greece, Portugal) show extremely negative RSCA values, confirming they have no meaningful domestic production capacity.

3. Price Volatility, Supply Shocks, and Strategic Vulnerability

Unit prices for both imports and exports rose significantly, with exports rising faster

Over the period, import unit prices increased from €795/t to €961/t (+20.9%), while export unit prices rose from €879/t to €1,131/t (+28.6%). Import prices peaked at €1,412/t at some point during the period, and export prices reached €1,685/t. These price surges likely reflect the global energy price spike and raw material cost inflation of 2021–2022, as ferro-silico-manganese production is highly electricity-intensive.

Several high-severity supply shocks were detected, concentrated in 2021–2022

The shock detection analysis identified three major price shock events:

The most severe shock was a 95.7% price increase for imports from South Africa in 2022, with an abnormality score of 11.4 (well above typical thresholds). This likely reflects the combination of the global energy crisis, South Africa's chronic electricity shortages, and the post-COVID commodity price spike.

Ukraine featured in two shocks: a price spike in EU imports from Ukraine in 2021 (35.9% increase, affecting 39% of import value) and a price spike in EU exports to Ukraine in 2022 (+62.9%). The 2021 import shock from Ukraine predated the full-scale Russian invasion but may reflect early supply disruptions and rising energy costs in Ukraine. The 2022 export shock reflects the wartime disruption of trade flows.

Import volatility varied widely across partner countries

The coefficient of variation (CV) of import flows reveals which supplier relationships are most unstable:

Kazakhstan (CV 1.79), Zambia (1.06), and Georgia (0.97) show the highest volatility. While Georgia has become a major supplier, its trade flows have been highly variable, suggesting an emerging but not yet stable supply relationship. Russia and Kazakhstan both show high volatility, consistent with the disruption of trade following sanctions and geopolitical realignment. Norway, by contrast, is the most stable supplier (CV 0.30), reinforcing its role as the EU's anchor supplier.

The import market is moderately concentrated, with no single dominant partner

The Herfindahl-Hirschman Index (HHI) for import value remained in the 2,000–2,400 range throughout the period (2,309 in 2015, 2,424 in 2025), indicating moderate concentration. This is below the 2,500 threshold typically associated with a "moderately concentrated" market, though the trend is upward. In volume terms, the HHI was slightly lower (2,405 to 2,375), suggesting a modest diversification of physical supply sources even as value concentration increased—a pattern consistent with price-driven shifts in sourcing.

The EU's strategic vulnerability in ferro-silico-manganese has increased markedly

The convergence of several vulnerability indicators paints a consistent picture:

The net import reliance of 87.4% means that the EU can satisfy only about one-eighth of its ferro-silico-manganese needs from domestic sources. The trade intensity exceeding 100% indicates that the EU now imports more than its total domestic consumption—a pattern consistent with re-export activity or stock changes, but primarily reflecting the collapse of domestic production. The dramatic rise in export propensity, while partly a statistical artefact of a shrinking production base, underscores that the EU's remaining production is increasingly oriented toward export markets rather than domestic supply.

Conclusion

The EU ferro-silico-manganese market has undergone a profound structural transformation between 2015 and 2025. Domestic production collapsed by over 80%, transforming the EU from a partially self-sufficient producer into an overwhelmingly import-dependent consumer with a net import reliance nearing 90%. The import base itself was reshaped: Norway and Georgia emerged as dominant or fast-growing suppliers, while Ukraine and South Africa lost ground. Several severe price shocks—particularly from South Africa and Ukraine in 2021–2022—exposed the vulnerability of the EU's supply chains to energy price fluctuations and geopolitical disruption. The combination of rising import dependence, moderate market concentration, and significant supply volatility suggests that ferro-silico-manganese represents a strategically sensitive input for European steelmaking. Policy attention to supply diversification, long-term supply agreements with stable producers, and the potential for incentivising domestic or allied-country production capacity may be warranted to mitigate future supply risks.