Market evolution: Low silicon ferro-silicon (CN 720229) — 2015–2025

Introduction

This report examines the evolution of the European Union's trade in low-silicon ferro-silicon (customs code 720229, containing ≤55% silicon) from 2015 to 2025. Over this decade, the market underwent a significant contraction, characterized by falling trade volumes, a sharp decline in domestic production, and a corresponding rise in unit values. The period was marked by structural shifts in trade partners, increased market concentration in key export destinations, and notable price shocks in 2022. These dynamics reflect broader trends in the EU's steelmaking supply chain, energy costs, and global competition.

1. The Great Contraction: Volumes and Domestic Production Collapse

The period 2015-2025 was defined by a dramatic reduction in the physical scale of the EU's ferro-silicon (≤55% Si) market. Both import and export volumes fell substantially, a trend mirrored by a severe contraction in EU production capacity.

1.1 Import and Export Volumes Fell Sharply

The EU experienced a pronounced decline in the quantity of ferro-silicon traded. Import volumes decreased by 36.5%, falling from 88,044 tonnes in 2015 to 55,881 tonnes in 2025. Export volumes fell even more steeply, by 37.9%, from 20,188 tonnes to 12,541 tonnes over the same period. This widespread contraction indicates a reduction in the overall activity level of consuming industries within the EU.

1.2 A Collapse in Domestic Production

The contraction in trade volumes coincided with a severe decline in EU domestic production. EU production quantity plummeted by 63.8%, from 115,261 tonnes (2015) to 41,729 tonnes (2025). Production value fell by an even more staggering 78.0%, from €168.3 million to €37.0 million. This suggests a significant loss of production capacity and competitiveness within the EU, likely driven by high energy costs and global competition.

2. A Shifting Landscape: Market Structure and Concentration

Despite the overall volume decline, the structure of the EU's trade relationships evolved. Import sources became more diversified, while export markets became more concentrated. Within the EU, production specialized geographically.

2.1 Diversification of Import Sources

The concentration of imports, as measured by the Herfindahl-Hirschman Index (HHI) for value, fell by 39.5% from 6,851 in 2015 to 4,143 in 2025. This indicates a meaningful diversification away from a single dominant supplier. Norway remained the largest supplier but saw its share fall dramatically from €86.1 million to €43.2 million (-49.9%). Simultaneously, suppliers like Brazil (+1256.0%) and India (+139.6%) grew their presence in the EU market.

2.2 Concentration of Export Markets

In contrast to imports, the EU's export market became more concentrated. The export HHI for value rose by 55.3% from 1,618 to 2,513. Türkiye solidified its position as the premier destination, growing its share from €11.6 million to €12.2 million. Notably, exports to the United Kingdom collapsed by 79.9%, a likely consequence of Brexit-related trade barriers.

2.3 Internal Specialization and Concentration

Production within the EU became more geographically specialized. In 2025, Slovenia (RSCA: 0.80), Sweden (0.70), and Denmark (0.49) were the most specialized producers. Meanwhile, large economies like Austria and Belgium were strongly unspecialized in this product. The Netherlands, despite its large port role, had a notable production share of 40.3%.

3. Turbulent Prices: External Shocks and Volatility

The decade saw a sustained rise in unit values, culminating in a major price shock in 2022. This price inflation, coupled with high volatility from specific suppliers, increased the EU's strategic trade exposure.

3.1 A Structural Rise in Unit Values

Despite falling volumes, average prices for both imports and exports increased significantly. The average import price rose by 3.6% to €1,228 per tonne, while the average export price surged by 31.4% to €2,101 per tonne. This divergence suggests EU exporters were able to command a premium, potentially reflecting quality or specialization advantages.

3.2 The 2022 Price Shock

The most dramatic market event was a severe price shock in 2022, detected for exports to key partners. The abnormality index for prices to India was 113.4, to Türkiye 90.9, and to Mexico 42.3, indicating extreme deviations from normal patterns. This was likely a result of the global energy crisis following Russia's invasion of Ukraine, which spiked production costs for energy-intensive ferro-alloys.

3.3 Increased Trade Intensity and Export Propensity

Paradoxically, the EU's net import reliance increased from 27.4% in 2015 to 44.7% in 2025, due to the collapse in domestic production. However, the trade intensity (imports + exports as a share of domestic production) more than doubled to 104.2%, and export propensity (exports as a share of production) soared by 446% to 112.4%. This indicates that what remains of the EU industry is now overwhelmingly oriented towards exporting, making it highly sensitive to global demand and logistics disruptions.

Conclusion

The EU market for low-silicon ferro-silicon (CN 720229) contracted significantly in volume between 2015 and 2025, driven by a severe decline in domestic production. This structural shift led to a paradoxical situation: while the EU became more reliant on imports in aggregate terms, its remaining domestic industry became almost entirely export-oriented. The market structure evolved, with import sources diversifying but export destinations becoming more concentrated. The period was punctuated by a major price shock in 2022, highlighting the sector's vulnerability to external energy and geopolitical crises. Overall, the data points to a smaller, more specialized, and internationally exposed EU ferro-silicon industry at the end of the decade.