Current Situation and Prospects of Global Refractory Materials in 2024

In 2018, the world's production of refractory materials reached 36 million tons, reflecting the upward trend of global steel production since 2016. However, this improvement is expected to be short-lived, with refractory material production expected to decline again from 2020, as the global steel market remains relatively weak until 2024. In the past decade, the world's crude steel production has increased from 1.469 billion tons to 1.812 billion tons, with a compound annual growth rate of 3%. Driven by urbanization and industrialization, China, which accounts for about 50% of global crude steel production, has grown at a compound annual growth rate of 6.1%, while the compound annual growth rate in other regions of the world is only 0.6%, with mature economies in Europe, America, and Japan experiencing a decline in crude steel production during this period. In 2015, global steel production decreased for the first time, with a slight rebound in 2016, 2017, and 2018. However, it is expected that the annual growth rate will be less than 1% by 2024. Due to steel manufacturers minimizing the unit consumption of refractory products, the total production of refractory materials continues to decline. In mature markets, the consumption of refractory materials per unit product has almost stabilized, but the consumption of refractory materials per ton of steel in steel mills in China and other countries continues to decline. New steel mills in these countries have adopted more efficient modern technologies in steel production and refractory material use. Between 2008 and 2013, global refractory material production increased by 1.5% year-on-year, but decreased by 2.2% between 2013 and 2018. In 1960, the global average consumption of refractory materials per ton of steel was 50-60 kg, but by 2000 it had dropped to 20-25 kg. Afterwards, the rate of decline slowed down. At present, the average consumption of refractory materials per ton of steel worldwide is around 15-20 kg, while the consumption of refractory materials per ton of steel in China is still relatively large, but only about 5 kg higher than the global average. With the slowdown in demand in the steel market, refractory material manufacturers are facing pressure from steel customers to lower prices, having to absorb higher raw material costs and cope with the crisis of raw material shortage. This is because China has implemented strict environmental protection measures in recent years, and some factories have closed. Affected refractory raw material supply includes Bauxite, alumina, magnesia, graphite, etc. Refractory materials are mainly used for steel (Ferrous); Non metallic minerals (cement, flat glass, container glass, ceramics, and lime); Non ferrous metals (mainly aluminum, copper, lead, nickel, silver, titanium and zinc) and other applications (including chemical manufacturing, petroleum refining, casting, Incineration, etc.). The market share of refractory consumption in various industries worldwide in 2018 is shown in Figure 1. So far, the steel industry is the largest consumer of refractory materials, and the global market share of refractory materials for steel has decreased from around 57% in 2007 to 51% in 2018. Although the steel industry will continue to grow, the slow recovery of the global steel market and the increasing use of electric furnaces instead of converters in China are expected to further reduce the share of refractory material consumption in the industry. Overall, it is expected that by 2023, the demand for refractory materials in the steel industry will account for 49% of the total refractory material market. Figure 1: Global refractory user market share in 2018 (estimated) The integration of the entire refractory industry is still ongoing, and the market leader RHI Magnesita was formed by the merger of RHI and Magnesita Refractarios in 2017, achieving revenue of 3.1 billion euros (approximately 3.5 billion US dollars) in 2018. Vesuvius, another global conglomerate, reported a revenue of £ 1.8 billion (approximately $2.3 billion) in 2018. The merger between large companies makes it more difficult for small and medium-sized manufacturers to compete, especially in an environment with low profit margins; During the shortage of raw materials, their purchasing power is limited. Due to the very limited growth in global steel production and the continuous decline in refractory material consumption, it is expected that global refractory material production will continue to show a downward trend by 2024. The production of refractory materials may reach a low point of slightly over 35 million tons. (Compiled by Zhao Rui from China Refractory Materials Network)