Refractories

Global Outlook on Refractory Market

Market Overview

Global market size – $25.63 billion (2021E)

Expected to grow at the rate of 4-5 percent to $30.92 billion by 2025

• APAC region estimated for largest share(74%) of the global refractories market in FY-2021. The region is also anticipated to note highest CAGR of 5.60% in the forecast period(2022-2026)

• APAC region is also financing “refractories recycling plants” to reduce the carbon footprints. The increasing production of chemicals and infrastructure project are anticipated to generate opportunity for the growth of the refractories market in near future

• USA coupled with developing economies such as China, India, Brazil and South Africa are making huge investment in large-scale infrastructure projects. Also, power generation, cement, iron & steel, cement and non-metallic industries in such economies are growing at a high rate and thus are anticipated to further drive the refractories market

Global Refractories Drivers and Constraints

Downstream Demand

• Since Q1-2022, demand from major downstream industries, such as steel and pig iron remained weak due to cautious buying attitude from buyer side amid increasing energy/freight rates

Drivers

Infrastructure/Demand for Cement

• Demand for cement and lime is ever increasing, due to the infrastructure growth in emerging countries, which in turn drives the demand for refractories in cement processing.

• Most of this construction projects have resumed in China and is likely to gradually resume in other APAC countries after the COVID-19 pandemic is contained.

Mineral Processing Output

• Increasing steel, non-ferrous and mineral output processing, and beneficiation due to growing demand for the commodities, drives the demand for refractory usage.

• Rising commodity prices of steel, aluminium, gold, silver, and other non-ferrous minerals impact the global mineral production, which in turn would help in increasing the value of demand for refractories.

• Suppliers in emerging economies are rapidly adopting technologies, in order to improve efficiency and increase production capacity

Constraints

Supply Constraint/Reduced capacity utilization rates

• Supply has improved in Q1-2021 due to following COVID-19 protocols and adopting technologies such as digitization and automation, However, mills are still operating at reduced capacity utilization rates as compared to pre-covid scenario.

• Environmental regulation in China coupled with increasing feedstock price and looking for coal alternative to electricity by major refractories producers will increase the production cost.

Increasing Logistics Cost

• Increased logistics cost impacts the import of raw material and increases the domestic and landing cost of refractories, exporting nations

• At present, the freight rate of both short-distance and long-distance international ocean shipping is still high

• Chinese government continues taking measures in increasing the containers at ports to reduce the ongoing container shortages for export.

Cost Structure : Refractory Market

• The major cost factors involved are raw materials and labor costs, which account for about 80 percent of the total cost.

• In case of downstream sector, output of pig iron, cement, flat glass, ferroalloys, coke and zinc dropped in Aug-2022, but the output of crude steel increased marginally. The output of alumina, electrolytic aluminum and non-ferrous metals such as lead and copper increased significantly

• In addition, rising logistical bottlenecks amid new COVID-19 related lockdowns in China, feedstock supply shortages, increasing coal and fuel prices is expected to further support the prices of refractory products in near term

Procurement Best Practices : Refractories

This section provides key insights into refractory procurement and allied services. These facts and figures are vital to understanding the different nuances and technicalities of procurement in refractories. The report details the prevailing contract and bid practices. The report then analyses the pros and cons of these procurement practices. Some aspects of the contract favor suppliers while others are more advantageous to the buyers. The competitiveness also differs for the different contract types. An accurate estimation of the refractory requirements and procurement quantities prevents delays in the bid process as well as the operations of the refractory.

The different aspects that one must consider before selecting suppliers for refractory procurement are listed and analyzed in detail. The technical, as well as legal parameters of the components, are studied.

Technological Advancements

The industry has seen many great advances in technology that have optimized the refractories industry. Some of these advancements are used to improve the refractories process while others improve the end product. The latest technological advancements have minimized the adverse environmental impact of the industry. Certain advancements are common to the industry while others are proprietary solutions provided by companies.