Japan's production of silicomanganese fell to a record low in September, with market sources attributing this largely to two of the three producers shifting their domestic operations to less power-intensive ferromanganese production and moving silicomanganese production to Malaysia.
According to data released Thursday by Japan's Ministry of Economy, Trade and Industry, the country produced just 252 mt of silicomanganese in September, a steep fall from output of 3,036 mt in the year-ago period and also down 67% from output of 756 mt in August.
An official at the Japan Ferroalloy Association told Platts Friday that Nippon Denko and Chuo Denki Kogyo had ceased silicomanganese output in Japan by December 2012. When contacted, Nippon Denko and Chuo Denki Kogyo declined to confirm this.
But Nippon Denko and Chuo Denki Kogyo have 20% and 5% stakes, respectively, in Malaysia's Pertama Ferroalloys, which is set to launch silicomanganese output next month, Platts reported previously.
Market sources say one key reason for the shift in silicomanganese operations could be access to cheaper hydropower in Malaysia, compared with Japan.
A source at Kobe Steel confirmed that the company was the sole remaining silicomanganese producer in Japan. Kobe Steel, which has a plant in Kakogawa, west Japan, produces mostly 65%-Mn 16%-Si silicomanganese for its own consumption, the source said, adding that the company's monthly output fluctuates widely depending on the type of steel produced and import levels.
Silicomanganese is a key feedstock in the production of steel.
According to the METI data, Japan's output of silicomanganese almost has almost halved to 18,717 mt over January-September this year, compared with 37,381 mt during the same months of 2012.
Imports, however, have increased. According to Japanese customs data, the country imported 213,045 mt of silicomanganese over January-September this year, up 14% from imports of 186,835 mt in the year-ago period.
But the fall in Japanese silicomanganese output has not affected country's manganese ore imports. Japan imported 835,960 mt of manganese ore over January-September this year, up 3.1% from 811,191 mt a year ago, according to customs data.
