Industry Outlook & Drivers
Global Outlook on Refractory Market
Refractories are materials resistant to decomposition by heat, pressure, or chemicals. The refractories industry uses non-metallic or ceramics materials that are inorganic, heterogenous, and porous. Refractories are oxides or non-oxides or silicon, aluminium, calcium, magnesium, and zirconium. The refractories industry also uses chromium, tungsten, rhenium, niobium, and tantalum. Fireclay refractories, silica brick, high alumina refractories, magnesite refractories, zirconia refractories, and other specialty refractories are the refractory materials used.
Refractories are used for furnace lining and acidic lining. They are used as kiln lining material and act as insulation to withstand high temperatures. Other refractory materials used include alpha-alumina, silicon dioxide bricks, aluminum oxide bricks, calcined alumina, white fused alumina, brown fused alumina, etc. Refractories like Silica bricks are used in glass melting furnaces, while Alumina Bricks are used in the Metals, minerals, and mining industry.
The refractories market is categorized based on form, composition, type, process, end-user, and region. In terms of form, the market is segmented as monolithic and bricks & shape. By type, the market is segmented as acidic, basic, and neutral. Segmentation by the manufacturing process is dry press process, fused cast, hand-molded, formed, and unformed. The refractories market demand is boosted by end-users like iron & steel, glass, cement, non-ferrous metals, and non-metallic materials. Region-wise it is segmented as North America, South America, Europe, Asia Pacific, and Middle East Africa.
- The global refractories market was estimated to be worth $31.1 billion in 2018. The refractories market forecast for 2025 is $41 billion. The CAGR is expected to be 4% during this period.
- The refractories market trends are expected to be positive thanks to the demand for refractories from the iron and steel industry. This industry is growing thanks to an increased infrastructure-spending by countries globally, especially in Asia-Pacific.
- The glass, cement, electrical, automotive, and aerospace industries also use refractories and the demand is likely to increase globally.
- Due to COVID-19, the demand had dropped in 2020. As the economic recovery progresses, the growth of industries will pick up and this would lead to an increased demand for refractories.
- The ongoing coronavirus outbreak globally has led to supply disruption of refractory raw materials globally. Logistics bottleneck offsets cautious market sentiment, resulting in pricing volatility. However, this outbreak will be controlled in the medium-term and the supply will bounce back to normal.
- Though there is a decline in demand, due to the reduction of specific consumption of refractories in the steel sector, steel demand is expected to dominate the global refractories market with a 60 percent share.
- In spite of the weakening demand in China for steel, Asia is expected to dominate the demand for refractories, due to the developing demand for steel in India.
- In APAC, the increasing production of chemicals is anticipated to generate opportunities for the growth of the refractories market in the near future.
- The demand is steady from end-users, due to increasing environmental awareness and environmental agencies globally regarding the usage and disposal of refractories. This is likely to have an impact on market growth.
- Developing countries, such as China, Russia, Mexico, and South Africa, are making a huge investment in large-scale infrastructure projects, which is anticipated to significantly boost the growth of the steel and iron industry.
- The key players in this market are Krosaki Harima Corp, RHI Magnesita, Vesuvius PLC, Saint-Gobain, Morgan Advanced Materials, CoorsTek Inc, and Shinagawa Refractories.
Raw Material Share of Refractories
- Mineral processing refractories either fall under the category of clay-based acidic refractories or non-clay-based basic or neutral refractories, such as fireclay refractories, magnesite refractories, zirconia refractories, mullite, magnesia, chromite, and dolomite.
- Specialty Refractories such as clay refractories are primarily used by the low-temperature zones of blast furnace in the manufacture of steel and in the smelters used for Aluminium processing.
- The basic oxygen Furnace uses close to 60 percent of the magnesia refractories produced and the electric arc furnace uses close to 25 percent of the alumina and alpha-alumina/high alumina refractories produced globally. This includes calcined alumina, white fused alumina, and brown fused alumina.
Market Overview
Global Refractories End-use by Industries
- Chinese refractory production is estimated to reach 27.46 MMT billion in 2022, with an average growth rate of 3.70 percent during 2019–2021, owing to new plant establishments or restart of existing plants.
- Steel, being the major end-user industry for refractories, is anticipated to grow at a CAGR of 2–3 percent until 2021, due to rising demand from construction, infrastructure development, transportation, and energy sectors.
- Also, glass, cement, energy, and chemical sectors will drive the refractories market until the forecasted period, as it is expected to grow at a CAGR of 2–5 percent until 2021.
- Raw material supply disruptions, owing to environmental inspections in 2017 and 2018, have impacted the overall production of refractories.
Refractories - Global Demand
- Demand was expected to grow at a CAGR of 3–3.5 percent in the upcoming years to reach 53.11 MMT by 2020, owing to increasing demand from steel, iron, non-ferrous, power, and glass industries.
- Constant cost pressure has been pushing the steel manufacturers to reduce the specific consumption of refractories in the processing of steel and this is projecting a negative impact on future demand.
- On the positive side, the rapid growth in infrastructure projects across the globe, especially the APAC region, is projecting exponential growth in the global cement and glass industries, which accounted for about 67.92 percent of the total demand and is anticipated to grow at a CAGR of 3.83 percent in the forecasted period.
- Refractories also drive the demand for furnace lining, acidic lining, kiln lining material, silicon dioxide bricks, aluminum oxide bricks, alumina bricks, and silica bricks.
Refractories Manufacture's Market Share
- The global market of refractories was fragmented with major accounting for a combined market share of less than 25 percent (2019).
- There were more than 2,000 refractory manufacturers each with annual revenue of RMB20 million in China. The Chinese market is in perfect competition due to low entry barriers and in consequence with low concentration.
- China is the largest refractory market in APAC due to the local availability of raw materials such as alumina and magnesite. The Chinese refractory market is expected to grow at a CAGR of 3 - 3.5 percent during the forecast period.
- The refractory consumption per tonne of steel continued to remain at 10-12.
Regional Market Snapshot
This section of the refractory market report analyses each regional market individually. The regional market analysis includes information on the refractories market size, market share, growth rate, and demand. It also includes a demand forecast. The regional report divides the global market into Australia, Europe, APAC, and North America.
Global Refractories Drivers and Constraints
Drivers
Non-mining Sectors
Glass, ceramics, cement, silica brick, energy, and chemical sectors drive the demand for refractories. These sectors contributed to 40 per cent of the refractory demand. Growth in these sectors was expected to increase their net market share by 2–5 percent in 2020
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.
Metals, Minerals and Mining Processing Output
Increasing steel, non-ferrous and mineral output processing, and beneficiation due to a growing demand for the commodities and mining consumables, drives the demand for refractory usage. Rising commodity prices of steel, aluminium, and other non-ferrous minerals impact the global mineral production, which in turn would help in increasing the value of demand for refractories.
Constraints
Reduction in Specific Consumption
The specific consumption of refractory was close to 15–20 kg to produce 1 ton of steel. With increasing cost pressure and the development of thermally-resistant refractories, the specific consumption is expected to reduce to as low as 5kg to produce 1 ton of steel.
Fragmented Market
Though the refractory market is close to 49.86 MMT, the supply market is fragmented with the top 15 players having close to 20 percent market share. The marginal differences in annual revenues of these suppliers increase the competition among them and may result in normalizing the price of refractories. Suppliers having a stable research and development facility are expected to be ahead of the competition.
Cost Structure
The major cost factors involved are raw materials and labor costs, which account for about 80 percent of the total cost. The cost structure analysis studies the impact of each of the cost components on the prices. This includes raw materials as well as labor and consumables. The report also details the cost structures for alumina, magnesia, and fire clay refractories in China and globally. It lists the break up of the costs and gives insights into the prevailing cost trends.
The major cost factors involved are raw materials and labor costs, which account for about 80 per cent of the total cost.The cost structure analysis studies the impact of each of the cost components on the prices. This includes raw materials as well as labor and consumables. The report also details the cost structures for alumina, magnesia, and fire clay refractories in China and globally. It lists the break up of the costs and gives insights into the prevailing cost trends.
The cost and pricing section of the refractory market report also describes the different engagement models in the industry. The regional practices and variations in the contract structures and payment practices are described.
Procurement Best Practices
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.
