Graphite, magnesium compounds: Chinese refractories see year-to-date fall but Q3 recovery

Refractory brick refractories

The Association of China Refractories Industry (ACRI) has reported a 7.3% decline in refractory materials production for January to June 2020, with output falling to 17.45Mt from 18.83Mt during the same period in 2019. Of this year’s total, shaped products accounted for 9.79Mt (down 6.38% on 2019).

Meanwhile, ACRI reported an uptick in Chinese production in Q3. Output between July and September was 6.97Mt, a 9.2% increase from 6.38Mt in Q2 2020 and a 70% increase from 4.1Mt in Q1. However, it was noted that overcapacity continues to hang over the industry.

Roskill View

2020 has proved a tough year for industrial minerals that feed the refractories market, as COVID-19 devastated demand for steel in what was already a challenging environment with slowing growth in China. As the largest producer and consumer of refractories, news of recovery in China is very welcome across the sector. Refractories are an important application for graphite, magnesia and alumina, much of which is focussed on consumption in shaped brick products.

Meanwhile, concerns are rising in the refractory raw material supply chain with reports of new environmental inspections and closures in China over the winter months that are likely to affect numerous commodities industries. Timed with recovery on the demand-side, this could be a catalyst for rising prices into early 2021.

In the long-term, Roskill remains cautious in its refractory forecasts to 2030, with its in-house steel expectations for Chinese crude steel output limited to just 0.5%py, as the country’s growth slows and transitions to decline.

Roskill’s NEW Natural & Synthetic Graphite: Outlook to 2030, 13th Edition was published in October 2020 and includes analysis of industry trends in supply, demand, trade and prices, as well as providing forecasts to 2030, profiles of the main producers, and an industry cost curve for spherical graphite. Click here to download the brochure and sample pages for the report, or to access further information.

Roskill’s NEW Magnesium Compounds: Outlook to 2030, 14th Edition will also be published soon. Click here for more information.

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This article was written by Suzanne Shaw. Please get in touch below if you wish to discuss further:

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