Relying on the advantages of raw materials such as bauxite and magnesite, China has been ranked the world’s largest refractory production country for many years. As of 2019, China’s refractory production accounted for 64% of global refractory production. Europe is the second largest production area in the world, accounting for about 10% of global production. The United States ranks third, accounting for about 9% of global production, Japan’s production accounts for about 4%, and the total output of the top five production areas accounts for 87%.
From 2013 to 2017, under supply-side reform, downstream steel and other industries continued to cut production capacity, superimposed on the extension of refractory material life. This led to decreased unit consumption, and the demand for refractory materials continued to adjust. The output dropped from 29.2825 million tons to 22.9254 million tons… From 2018 to 2020, benefiting from the development of downstream industries, output stabilized and rebounded slightly. As of 2021, the output of refractory materials will reach 24.0267 million tons, a year-on-year decrease of 3.04%. In the first half of 2022, the output decline will further expand, with a year-on-year decrease of 5.17% to 11.3958 million tons. The annualized output is expected to remain above 20 million tons.
China exports many refractory raw materials and products and imports relatively little. As a significant exporter of refractory materials, China’s total export trade of raw materials and products will be 4.554 billion US dollars in 2021, a year-on-year increase of 54.39%, benefiting from the recovery of overseas economies and rising prices in the context of inflation. Historically, the export trade volume has fluctuated dramatically, mainly due to the large fluctuations in the price and export volume of refractory raw materials.
Regarding export volume, China’s refractory exports are dominated by refractory raw materials, accounting for more than 70% of the total refractory exports. In 2021, the export of refractory raw materials will be 5.6023 million tons, a year-on-year increase of 41.24%; the export volume of refractory products will be 1.7669 million tons, a year-on-year increase of 26.02%, and the growth rate has rebounded significantly. In the first half of 2022, the growth will continue. The total export trade and volume will reach 2.617 billion US dollars and 3.6005 million tons, respectively, a 30.72% and 3.47% yearly increase.
The difference in the distribution of mineral resources in China makes refractory materials have regional attributes. Natural bauxite is mainly produced in Henan and Shanxi provinces, while magnesite is mainly in Liaoning province. In regions, Henan Province is far ahead in refractory production capacity and output, followed by Liaoning, Shandong, and Zhejiang.
As of 2021, the output of refractory materials in Henan Province will reach 9.1626 million tons, a year-on-year decrease of 10.20%, but it still accounts for 38.14% of the country’s total output. In 2021, the output of refractory materials in Shandong Province will increase by 7.72% year-on-year to 2.8179 million tons. Zhejiang Province will increase by 0.19% year-on-year to 1.6508 million tons, and Beijing will increase by 6.80% year-on-year to 734,500 tons. The most significant increase in production, a year-on-year increase of 22.42% to 1.6023 million tons.
Regarding product structure, China’s output of dense-shaped refractory products in 2021 will be 13.2051 million tons, accounting for 54.96% of all refractory products. She was followed by unshaped refractory products, accounting for 42.50%. Thermal insulation and refractory products accounted for 609,800 tons, accounting for a year-on-year increase of 0.03 percentage points to 2.54%. Under the background of the dual-carbon policy, the importance of energy conservation and thermal insulation is highlighted, and the proportion of this part of the output is expected to increase further.
The demand for refractory materials largely depends on developing downstream high-temperature fields such as steel, building materials (cement, glass, ceramics, etc.), nonferrous metals, chemistry, electricity, environmental protection, and the military industry. From the perspective of China’s refractory demand structure, the iron and steel industry accounts for about 65% of the total, and the refractory materials in the cement, glass, ceramics, chemical, and nonferrous metal industries account for 10%, 7%, 5%, 4%, and 3% respectively. About.
Steel: mainly consumable refractory materials, 1 billion tons of crude steel supports the market of tens of millions of tons
As the largest downstream application field of refractory materials, the iron and steel industry has the most apparent impact on the demand for refractory materials. On the whole, since 2016, the output growth rate of the iron and steel industry has shown a gradual recovery trend, and the reduction of production capacity and environmental protection policies have gradually adjusted the production capacity structure.
In 2021, affected by factors such as the decline in the growth rate of infrastructure real estate investment and dual control of energy consumption, crude steel production will drop by 3% year-on-year to 1.033 billion tons; in the first half of 2022, crude steel production will drop by 6.46% year-on-year to 527 million tons. The growth rate of the iron and steel industry is slowing down, and the corresponding demand for refractory materials will face certain adjustments; however, considering that 1 ton of steel uses more than 13 kilograms of refractory materials, it will still maintain a market of tens of millions of tons for a long time.
Steel refractories are mainly consumable refractories with a fast turnover and ample space. Taking the spoon as an example, the outermost layer is a steel shell, which can be divided into an insulation layer, permanent layer, and working layer from outside to inside. Among them, the insulation layer is mainly made of ceramic fiber material, the same engineering refractory material as the permanent layer, and has a long service life.
The working layer directly interacts with molten steel and steel slag, primarily refractory materials such as magnesium and aluminum. The service life is calculated according to the furnace. For example, the turnover of rebar is 80-100 furnaces, and stainless steel may only be 20 furnaces. The molten steel in the working area on the top of the spoon is in direct contact with the air, and the erosion is faster, so more special refractory materials such as magnesia carbon are used as slag line bricks.
The replacement frequency of consumable refractory materials ranges from once in tens of minutes to once in several months; silica bricks with a long service life are mainly used in coke ovens, hot blast stoves, and engineering refractory materials in some areas of blast furnaces. They are acid-resistant and generally can be used for More than 10 years. According to empirical data, after several rounds of refractory price cuts, 1 ton of steel currently uses 60-70 yuan of refractory materials, of which engineering refractories are less than 10 yuan; the threshold and value of refractory materials in high-end fields such as stainless steel are also higher, and 1 ton of steel uses Refractory materials can reach 300-400 yuan. According to comprehensive estimates, the current annual 1 billion tons of crude steel contributes nearly 70 billion yuan to the refractory market.
Cement: Rotary kiln refractories are replaced every 1-2 years, with a market space of nearly 15 billion yuan
The cement industry is the second largest application field of refractory materials, and the refractory materials of the rotary kiln are replaced every 1-2 years. Since 2014, China’s cement industry has entered a five-year decline in output. In 2019, it increased by 7.06% against the trend to 2.330 billion tons and then stabilized at 2.3-2.4 billion tons in 2020-2021. In the first half of 2022, cement production fell by 14.84% year-on-year to 977 million tons, a significant increase in decline. The cement rotary kiln uses various refractory materials such as magnesia-aluminum spinel bricks and spray coatings. The overall replacement is about once every 1-2 years. On average, 1 ton of cement uses 0.6-0.8 kg of refractory materials. Ruitai Technology’s average price of cement kiln refractories of about 8,000 yuan/ton in the past two years corresponds to a market of close to 15 billion yuan.
Glass: The life of the kiln increases, the industry shrinks, and the “fine” market can break the situation
From 2015 to 2021, China’s flat glass production will grow steadily, with a CAGR of 6.6%, which coincides with the GDP growth rate. In 2021, the output of flat glass will increase by 7.50% year-on-year to 1.017 billion weight boxes, or about 50.85 million tons. The glass kiln mainly uses high-grade refractory materials such as fused-cast zirconia corundum and fused-cast alumina, and about 1 ton of glass uses 12-13 kg.
Daily-use glass refractory materials wear out quickly, and the service life of float glass furnaces is generally more than 8 years. High-quality refractory materials can be replaced every 10-12 years. Therefore, with the upgrading of refractory glass materials, the demand in the industry is shrinking day by day. It has become the development direction of the industry to refine the market and increase the added value of products.
