The China Association of Refractories has released a figure of 4.8Mt for Chinese production in Q3 2019. This is slightly below the Q2 figure of 4.9Mt but well above the 4.21Mt reported for Q1. A total of 13.91Mt for the first three quarters of 2019 equates to a decline of 5.2% on the same period in 2018, when Chinese output totalled 14.68Mt. Much of the decline is a result of environmental inspections which led to closures of capacity in the main production centres of Liaoning, Shandong and Henan, where output dropped by more than 26%, 18% and 3% respectively over the first nine months of 2019.
While the current downward trend in Chinese refractory production is a direct result of strengthening Chinese pollution controls, the refractories industry has seen little growth for a number of years because of the on-going weakness in Chinese and global steel markets. Although Roskill’s latest estimates for crude steel production put Chinese output at 992Mt in 2019, a 6.9% increase on 2018, we expect a trend of small-scale, slowing growth in the coming years before Chinese output flattens and then begins to decline over the second half of the decade.
Crude steel production climbed slightly in the USA in 2019 but fell in the other major producing regions of Europe and Japan. The focus for future growth is shifting to India, where crude steel production could rise by almost 6%py over the next decade.
Meanwhile, specific consumption of refractories in China continues to fall, a trend which has been underway for many years with the opening of more efficient steelmaking capacity. Specific consumption of refractories in mature markets is already low and expected to see little change. India’s consumption levels are currently much higher, although expected to fall quickly over the next 5-10 years, mirroring the trend that has already occurred in China.
While demand for refractories in China and the ROW remains weak overall, supply of refractory minerals has also tightened in recent years because of China’s strengthening pollution controls and closures to mining/processing capacity. China controls the vast majority of refractory-minerals production. Further closures and possible price rises are expected through 2019 and beyond, which will continue to affect refractories and the minerals used within them.
Roskill’s NEW report Non-metallurgical Bauxite & Alumina: Outlook to 2029, 10th edition was published in December 2019. Click here to download the brochure and sample pages for the report, or to access further information. Roskill also publishes a range of reports covering the graphite and magnesia markets.