KUCHING: OM Materials (Sarawak) Sdn Bhd’s (OM Sarawak) ferroalloy smelting plant in Samalaju Industrial Park, Bintulu is expected to produce between 320,000 to 370,000 tonnes of ferrosilicon (FeSi) and manganese alloy products in 2023. In 2022, the plant’s estimated production output was around 360,000 tonnes.
“Eight furnaces to undergo major maintenance works in phases throughout 2023. Production base case at similar levels to FY22, 11 out of 16 furnaces expected to be fully operational.
Upside to production as China borders re-open,” said OM Holdings Ltd (OMH), which owns OM Sarawak, in a recent investors’ presentation update.
The plant is expected to produce between 110,000 to 130,000 tonnes of FeSi and between 200,000 to 220,000 tonnes of manganese alloys in 2023.
OM Sarawak has recently successfully carried out modification and conversion of two metallic silicon (MetSi) furnaces.
The first MetSi furnace is currently undergoing jot commissioning and performance testing.
The MetSi furnances are expected to produce between 11,000 and 24,000 tonnes of metallic silicon in 2023.
OM Sarawak is prioritising diversification to silicon metal.
OMH increased its equity interest in OM Sarawak to 100 per cent from 75 per cent following the completion of the acquisition of 25 per cent stake owned by Cahya Mata Sarawak Bhd (CMS) group in December 2022.
In reviewing the ferrosilicon market, OMH said to-date.
FeSi prices have remained flat for over four months supported by higher Chinese costs and the strengthening of the yuan. Chinese exports of FeSi plunged 36 per cent in second half 2022 (2H2022) from 1H2022.
In 2022, the Russian-Ukraine conflict supported prices briefly as Russia is the world’s second largest exporter. In Q12022, FeSi price rose from US$2,110 to US$2,225 per tonne CIF Japan while Siliconmanganese (SiMn) price jumped from US$1,535 to US$1,775 per tonne CIF Japan.
Ukriane was the second largest exporting country of manganese alloys in 2021.
“Asian prices largely determined by Chinese export prices, albeit at higher cost.
Prices corrected and stabilised from Q32022 due to low demand,” said the company. In 2021, higher power prices around the world, notably in China, led to a massive price spike in FeSi.
According to OMH, manganese alloy prices fell in 2H2022 due to weakened global demand and oversupply of alloys as Ukraine maintained output.
Concurrently, manganese ore prices fell sharply, re-establishing a healthy smelting spread.
SiMn prices have been in steady decline over the past four months, and show signs of nascent recovery.
“Destocking may be near end but not out of the woods,” said OMH.
