Refractories Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Refractories

• Though there is a decline in demand, due to reduction of specific consumption of refractories in steel sector, steel demand is expected to dominate the market with 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

Raw Material Share of Refractories (2016)

• Mineral processing refractories either fall under the category of clay based acidic refractories or non clay based basic or neutral refractories, such as fire clays, alumina, mullite, magnesia, chromite, and dolomite
• 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 refractories produced globally

Market Overview

Global Refractories End-use by Industries (2016)

• Falling steel production and prices in 2016 have reduced consumption of refractory materials and reduced the margins of steel manufacturers prices of refractory minerals even lower.
• However, over the long term, increased spending on infrastructure in developing countries to sustain the economy's transition from export oriented growth to domestic consumption based growth will drive opportunities for growth
• Refractory consumption in other major end-use industries including cement/lime, non-ferrous metals, glass and ceramics has also been impacted by falling demand and pricing since late 2016

Refractories - Global Demand

• Demand is expected to grow at a CAGR of 3–3.5 percent in the upcoming years to reach 51.5 MMT by 2019
• 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 the future demand
• On the positive side, the rapid growth in infrastructure projects across the globe is projecting exponential growth in the cement and glass industries that are aiding in minimizing the negative impact on refractory demand

Refractories Manufacture's Market Share(2016)

• Globally, the supply market of refractories is fragmented with major suppliers, such as Vesuvius, RHI, Magnesita, Imerys, Krosaki, and Shingawa accounting for a combined market share of 18 percent
• Various Chinese refractory manufacturers have entered the refractory market with their own technology. While they may have performance issues, the low prices might lead to a competitive cost-per-ton values in future
• Production of refractories requires highly specialized expertise along with high R&D expenses and years of field research and data. This is where the major tier-1 suppliers are well ahead of the new entrants to the market

Global Refractories Drivers and Constraints 

Drivers

Non-mining Sectors

Glass, cement, energy, and chemical sectors drive the demand for refractories. In 2016, these sectors contributed to 40 percent of the refractory demand. Growth in these sectors is expected to increase their net market share by 4–6 percent in 2018.

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.

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, 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 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 46 MMT, the supply market is fragmented with 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.