Friday, September 13, 2019
Refractories are an important market, often flying under the radar of the more visible or prominent markets. Refractories are of several types. The first type is mineral processing refractories, which further falls under two categories primarily. The first category is clay-based acidic refractories, while the second includes basic or neutral refractories, which are not clay-based. The latter type includes within its domain materials such as fire clays, magnesia, mullite, dolomite, alumina, and chromite. Many clay-based refractories are used singularly by the low-temperature zones of blast furnaces, as they are invaluable in the manufacture of steel, as well as in the smelters employed for aluminium processing.
Take a look at our analysis of the global refractory market.
Global Market Outlook
Even though the market is seeing an overall reduction in demand - due to a decrease in the specific consumption of refractories in the steel sector - the demand for steel itself is expected to dominate the market. In this regard, steel is expected to account for 60% of the total market share. Moreover, although the demand for steel has weakened in China, the overall Asia region is still expected to dominate the global demand, due to the rise in steel demand in India.
The decreasing steel production as well as its related prices, has led to a reduction of the consumption of refractory materials. This, in turn, has reduced the margins of steel manufacturers and has pushed prices of refractory minerals even lower.
Over the longer term, however, the hike in infrastructure spending in developing countries is projected to be a big boost to the refractories market. This is due to the fact that, in order to sustain the economic transition from an export-oriented hub to local production, as well as domestic-consumption based growth, a steady refractories market is required overall.
Most of the major end-user industries, which include non-ferrous metals, ceramics, and glass, as well as cement and lime, have been impacted by the recent falling demands.
Global Demand for Refractories
- The refractories market is estimated to grow at a compound annual growth rate (CAGR) of 3–3.5 percent in the near future.
- There has been a negative impact, as far as future demand is concerned, owing to tireless cost pressure, which has pushed steel manufacturers to reduce their specific consumption of refractories during the processing of steel.
- However, other industries, such as infrastructure in particular, have shown promise across the globe. Due to these industries, there are predictions of exponential growth in the glass and cement industries, which are significantly increasing the demand for refractories worldwide.
Key Players in the Refractories Market
- The supply market of refractories stands monopolized and fragmented. Major suppliers, like Magnesita, Imerys, Vesuvius, Krosaki, RHI, and Shingawa account for a total market share of roughly 18 percent.
- Multiple Chinese refractories’ manufacturers have now entered the refractory market using their own technology. Their low prices, although they may signal quality issues, may still lead to highly competitive cost-per-ton figures in the near future.
Refractory Market Industry Trends
At a compound annual growth rate (CAGR) of 2.5%, the refractories market is projected to reach a value of $23.3 billion by 2020 and $26.3 billion by 2023.
Several industries are contributing to this trend, including, but not limited to, the power generation industries, non-ferrous metals, glass and ceramics, and iron and steel. Moreover, the ever-increasing demand from the APAC region, owing in part to the growth of the automotive and construction industries, has also led to a significant rise in demand for the refractories market overall. However, the shortage of demand from the iron and steel industry is also likely to impact the refractories market negatively.
1. Glass is projected to grow the fastest, while iron and steel will be the largest end-use industry for refractories.
Given that refractories find so many applications in multiple end-user industries, including glass, iron & steel, and cement, these industries carry forward the demand for refractories overall. They are used in the linings of reactors, high-temperature furnaces, and other processing units. They also act as a thermal barrier between the wall of a containing vessel and a hot medium, while also providing a barrier against corrosion due to any chemicals.
These drivers for the refractories market play a major role in the increasing infrastructural development in developing countries, as well as in the high growth of the non-metallic mineral industry.
2. Unshaped refractories are estimated to be the largest and projected to be the fastest-growing type by form.
The largest type of refractories by form is expected to be unshaped refractories. Within the next half-decade, this segment is also expected to witness its highest growth. There are multiple properties within these types of refractories - such as their mechanical integrity, chemical inertness, abrasion and thermal shock resistance at high temperatures, and their ease of use, which make them highly suitable for use within multiple industries. These industries include but are not limited to cement, glass, iron and steel, and non-ferrous metals industries.
3. By alkalinity, the largest type of refractories will be acidic & neutral refractories.
Mainly employed in the glass and ceramic industries, acidic refractories have generous deposits of silica and alumina content. This is definitely expected to drive the refractories market. On the other hand, neutral refractories, which are resistant to both basic slags as well as acid, are rich in chromite and graphite. These refractories find extensive use in metallurgical furnaces.
Beginning with the abundance of raw materials, the increasing favor given to refractories in the power generation, iron & steel, non-ferrous metals, and glass and ceramics industries, as well as multiple developmental strategies adopted by the manufacturers, the refractory market is expected to witness steady growth in the coming years.
Owing to multiple reasons - including, but not limited to, rising foreign investments, the presence of many large refractory manufacturers, and growing demand from the glass, iron, and steel, and non-ferrous metals industries - APAC is likely to be the largest market for refractories.