Increases in prices, poor
availability, refractory manufacturers constantly looking to
substitute lower-cost raw materials in their formulations, and
above all, supply concerns. These have contributed to the raw
material issue that has become a brain teaser for most
Among the most problematic,
bauxite, magnesia, graphite and zircon are unanimously
identified without hesitation.
The key common denominator in the
supply-demand dynamic is China, historically a significant
source of many leading refractory minerals such as bauxite,
fused alumina, silicon carbide, graphite, flint clay, and
Today every raw material is not so easy to get, the most
problematic one is graphite, due to the increase of use of
flake graphite in the battery industry, which is a booming
market. The main graphite producers are located in China and
they are facing several environmental problems, Giorgio
Cappelli, chief operating officer division steel and member of
the management board of RHI AG, told IM.
Magnesite mining at Haicheng, Liaoning in China. The
country dominates global magnesia markets, although
issues over quality continue to plague consumers.
Another critical raw material
is zirconia due to the incredible demand of the ceramic
industry in China and because some mines in other countries
have been closed, he added.
China remains one of the main
concerns when it comes to supply, the country being a leading
producer of key refractories material such as bauxite, magnesia
Supplies from China have been
drastically reduced in the past few years due to several
reasons such as the closure of shaft kilns, for environmental
and safety reasons, gradual exhaustion of the high-grade
deposits, and government imposed export restrictions as the
domestic industry is consuming more and more raw materials.
In addition, raw material
prices, in particular bauxite, are rising rapidly,
explained Shaowei Zhang, reader in structural ceramics &
refractories, department of Materials Science and Engineering,
Chinese demand has grown with a
subsequent shortage of raw materials for overseas refractory
manufacturers. In the case of fused materials, energy
consumption in the country has even increased imports of fused
As a result, the search for
alternatives to Chinese-based raw materials in the Western
world has emerged as a growing trend.
As underlined to
IM by Andus Buhr, global technical director
refractories, Almatis GmbH, availability and pricing of bauxite
and brown fused alumina have changed considerably over the past
Supply has become tight and prices
have increased dramatically driven by growing internal demand
in China and changes of Chinese policy with regard to raw
Alan Roughead, managing director at
Queensland Magnesia Pty Ltd (QMAG), confirms the trend to
IM. He believes China is becoming more
problematic in terms of reduced quality, poor delivery, and
increasing prices, resulting in Western suppliers with a good
history of consistent reliable supply being in great
As the refractories producers
fix long-term contracts with their customers, particularly in
steel which is a very important market for QMAG, reliability of
raw material supply and stability of price is becoming critical
for the refractories producer, Roughead said.
Chinese bauxite had been a low
price material since the mid-late 1980s, and had become a
standard for many high alumina refractories as refractory
manufacturers switched to this lower cost input from using
bauxite from Guyana and andalusite from France and South
During the last few years
availability has declined owing to Chinese government policies
to discourage mineral exports through various measures (export
licences, taxes, quotas, VAT rebate abolition) and some plant
closures due to environmental restrictions. Prices have also
increased remarkably, and quality has deteriorated. The same
has applied for brown fused alumina out of China.
In addition to the influence of China, there is a technical
trend to consider. This has been towards demand for higher
performing synthetic based alumina raw materials driven by
increasing demands on the refractories, for example in the
steel ladle lining. Here, bauxite has disappeared during
the past decade as a wear lining, pointed out Buhr.
alumina ingots cool at Treibacher Schleifmittel
AGs production site. BFA is dominated by Chinese
players but WFA supply is strong in Europe. Treibacher
In addition, the steel industry now
tends to shift to total cost of ownership (TCO), meaning
offering service contracts as cost/tonne of steel produced
(CPT) and full line supply (FLS), observed Cappelli.
In other words, steel plant
managers appear to now concentrate more and more efforts on
their core business and everything that has to do with
refractory is given into the hand of the refractory
That means that the whole
refractory industry has to move from a straight supply to an
industry offering additional value with service, installation,
consulting as a must, if it wants to stay competitive in the
market. This kind of business has a great side effect: it
allows the refractory companies to have direct access to
secondary raw material that is used to produce new products for
the industrial business - e.g. cement/lime, non ferrous
metal, environment and chemistry, and some times also in
glass, Cappelli explained.
Cappelli added that customers are
looking in the same direction as the steel plant - a tendency
that seems to increase dramatically worldwide, with the
exception of China.
The financial crisis also had an
impact on mentalities in the industry. In the few years leading
up to the financial crisis, suppliers and traders operated in
an environment of rapidly increasing prices and a declining
supply of quality raw materials, resulting in a surge to find
Bauxite - full
Refractory grade bauxite remains one of the most problematic
refractory raw materials for the industry regarding its supply.
Low priced bauxite from China, the worlds leading
producer for refractory grade, twenty years ago was substituted
in some applications for other alumina materials, such as
mullite and andalusite, and in some cases even chamotte-based
Paseks dunite mine in Galicia, northern Spain.
Dunite, which contains olivine, is an emerging source
of magnesia in refractories. Pasek Espana SA
It was then relatively easy for
refractory suppliers to sell new refractories with higher
alumina content (using lower cost bauxite from China) to their
customers, because the general perception was that higher
alumina content automatically meant higher performance.
That is when the global refractory
industry became very dependent on Chinese bauxite and brown
fused alumina (BFA).
However, the scenario dramatically
changed during the 2000s with the steady development of China,
followed by the growth of its steel and therefore refractories
industries. China then shifted its supportive attitude over raw
material exports to controlling quotas, limiting volumes by
export licences, taxes and fees.
The overall trend resulted in a
steep price increase in the market. From cheap prices flirting
with $70/tonne some years ago, bauxite has now crossed the
$500/tonne threshold, prompting the industry to find
Who could have predicted
that? a source from the industry told
IM. The situation would have seemed
One of the main problems of
[refractory] non-metallurgical bauxite is that China is and
will always be the main producer, commented another
source. This is supported by the fact that the only producer
outside of China of refractory grade bauxite is Chinese owned
Bosai Minerals Group (Guyana) Inc., in Guyana.
As a consequence, the industry has
to step back where it was some twenty years ago as alternative
aluminosilicate high alumina materials could face a revival in
applications where they had previously been replaced by
Hence the intense interest from
producers of andalusite and mullite in investing in capacity
expansions, as reported recently in IM, many
of which are expected to come on stream in the next two to
three years, not to mention new sources of supply of these
minerals looking to emerge.
Buhr believes that a partial
replacement will for sure take place and has started
already even though a complete replacement seems
rather unlikely with regard to high volumes.
It will also depend on
Chinese policies to what extent further new alternatives will
be developed, he added.
It is very likely that most
refractory producers in mature regions such as Europe will
pursue alternatives to Chinese raw materials in order to at
least reduce their dependency from Chinese supply.
This strategic aspect has
become important during the past years and it is not expected
that this general situation will change, commented
At present, alternatives for
bauxite are andalusite, sillimanite, Mulcoa 60 and 70.
These alternatives often show better thermo-mechanical
properties, explained Andus Buhr to IM,
however, pointing out that lower alumina content when
compared to bauxite can be a disadvantage when slag basicity is
Brown fused alumina can be replaced
by synthetic alumina based materials in addition to tabular
alumina or white fused alumina as synthetic alumina based
materials provide higher chemical purity and very often a
When the pricing gap between
brown fused and synthetic materials narrows tabular alumina
becomes an even more economical solution, commented
The density difference
between fused and sintered aggregates of about 7% results in a
lower material demand with sintered aggregates which also
contributes to the economic result. Such replacement of brown
fused alumina by tabular alumina is already taking place eg. in
blast furnace runner mixes and AluMagCarbon bricks, he
Among new products, Almatis has
recently launched BSA 96, a new sinter aggregate with 96%
Al2O3 produced in Ludwigshafen, Germany,
which is independent from Chinese raw
Buhr explained that the manufacture
of BSA 96 is identical to the production of tabular alumina and
sintered spinels, providing a homogeneous sintered product with
the same chemical composition across all size fractions.
It is free of carbide or
metallic contaminants which can disturb the performance of
fused high alumina aggregates in monolithic and brick
applications, he said. Almatis has invested in an
additional crushing and sizing line in Ludwigshafen to support
the high growth of tabular, spinel, and the new aggregate BSA
Another trend in the coming
years is to produce homogenous bauxite using lower-quality
bauxite deposits, commented another source, adding that a
few plants are working on using a different process to produce
homogenous bauxite high quality (85-92% alumina).
The worlds total resource of magnesite, the main source
of magnesia (MgO), is about 13bn tonnes. Six countries host 92%
of this, led by China (26%), North Korea (23%), Russia (21%),
Slovakia (10%), Australia (7%), and Brazil (5%).
Andalusite extraction at Andalusite Resources
operations in Limpopo province South Africa. The
mineral is an alternative, if not a returning, source
of alumina. Andalusite Resources
Magnesia faces some of the same
issues of supply and quality as bauxite. The 8m. tpa world
production (derived from magnesite) is dominated by China
(49%), leading to similar concerns of raw material supply,
exports controls, taxes and fees. Other leading producers
include Austria, Brazil, Greece, Russia, Slovakia, Spain, and
World synthetic magnesia
production - derived from seawater and brines - is
about 925,000 tpa, from Brazil, Japan, Mexico, the Netherlands,
Norway, the Republic of Ireland, Russia, South Korea, and the
USA. Refractories is the main market for magnesia (dead burned
and fused grades) with 52% share of the market.
Australian magnesia producer
Queensland Magnesia Pty Ltd (QMAG) reported that refractory
companies are constantly looking to substitute lower-cost raw
materials in their formulations.
Whereas previously many would
use high levels of electrofused magnesia in a formulation, now
they will look to substitute as much dead burned magnesia as
possible to try and reduce cost whilst not compromising
performance, Alan Roughead, QMAGs managing
director, commented to IM .
According to QMAG, high grade dead
burned magnesia (DBM) 97% MgO plus with a CaO:SiO2
ratio greater than 2.5 appears to be increasingly
problematic in the long-term given the scarcity of natural
Synthetic producers, which can
produce this material, face continuing increases in energy
costs and environmental challenges. The same can be said for
high grade fused magnesia (FM).
The difference stands with Chinese
producers that are constrained by poor availability of
suitable feed material explained Roughead, managing
director. As a consequence, increasing energy prices continue
to impact quality, availability and pricing. Not to
mention the issue with export quota availability, added
While bauxite can find
alternatives, magnesia remains more problematic. There
are no new alternatives for magnesia. These could potentially
be reduced but elimination is not likely, underlined
Fused magnesia can, however, be
substituted with high quality DBM in certain application areas,
as long as the silicate phases are of high refractoriness and
grain density is high.
A potential alternative to
magnesia in steelmaking applications is doloma [calcined
dolomite] but this is in quite limited steelmaking application
areas where the slag chemistry is compatible with the dolomitic
system, commented Roughead.
World graphite production is 1.13m.
tonnes, the main producing countries being China, India,
Brazil, and Canada.
The largest market for graphite is
the refractories industry with 24% of the market share. But it
is expected that demand from the lithium ion (Li-ion) battery
market could create the need for additional supply sources in
the long term, although the debate continues over natural
versus synthetic grades (see Market Monitor p.29).
At present, it is difficult to
quantify the amount of raw material which will be needed within
the next decade to supply this promising sector. Graphite is
the second largest input material by volume used in Li-ion
batteries, and it has been estimated that an additional 1m.
tonnes graphite will be needed by 2020 , a figure -
although controversial - which remains a source of concern
for the refractories industry as the battery market would be
more lucrative for graphite suppliers compared to the
As reported by IM,
it is estimated that whereas flake graphite,
the starting product for spherical used in refractories to
boost performance, trades for an average of $2,500/tonne, a
battery material manufacturer can pay between
$8,000-10,000/tonne for spherical grades.
Natural graphite presents a
huge demand from hybrid car batteries so the refractory market
has been moved to a second level, said Roberto Caballero
from Pasek Espaa SA.
In the near term, a graphite
shortage is expected as demand, which cautiously increased
during H2 2009, started to pick up quickly at the beginning of
2010. As a result, graphite prices keep growing steadily,
particularly in China.
Price increases from China
are driving refractory producers to buy from sources in other
areas of the world and to focus R&D on looking for
alternatives to this mineral, a source from the industry
underlined to IM.
But as Giorgio Cappelli, COO
division steel and member of the management board of RHI AG
told IM, at the moment there is no
alternative to graphite. For now, refractory producers
are discreetly working on finding replacement materials for the
Cappelli remains confident,
believing that it will be possible to replace graphite in
some years. Several research projects are focussing on
that, he added.
Meanwhile, the more immediate
options are to use less, and possibly consider the use of
nanotechnology to support this, according to another source
from the industry.
Typical data of high alumina raw materials for
||Brown Fused Alumina
||White Fused Alumina
||Sinter Spinels AR78/AR90
||85 - 90
||94 - 97
||> 99 (Al2O3+MgO)
||0.8 - 1.5
||1.5 - 2.5
||0.15 - 0.5
||0.4 - 0.8
||0.4 - 0.6
||0.2 - 0.8
|| 0.2 - 0.4
||3.1 - 3.4
||3.8 - 3.9
||0 - 9
||0 - 3
As reported by IM,
the future forecast shortage in zircon supply has been brought
forward owing to strong demand in China. The question now is,
across all applications worldwide, how to allocate
approximately 1.3m. tpa of zircon produced when demand exceeds
supply by more than 100,000 tpa in 2011.
Zircon was one of the key
refractory raw materials used in steelmaking until the end of
the 1980s when it was replaced by superior alumina-spinel
As consultant Alister MacDonald
explained, zircon refractories have today been mostly replaced
by fused zirconia refractory materials produced from zircon
owing to their low cost compared to chemical zirconia
materials. They are used extensively for glassmaking and
It is estimated that approximately
100,000 tpa of zircon is used to produce fused zirconia
However, it is expected that
increased zircon prices will allow zirconia derived from
polymetallic ores to be competitive as an alternative to fused
zirconia when new sources of production are available,
According to TZ Minerals
International, the share of zircon usage for refractory
applications has decreased from 17% in 2000 to 13% in 2008 with
a forecast 11% for 2012.
In glassmaking refractories,
monoclinic fused zirconia is added with zircon to form
alumina-zirconia-silica (AZS) refractories used to line glass
tanks for flat glass manufacture.
Most liquid crystal display
(LCD) and plasma display panels (PDP) use high zirconia
refractory blocks in the furnace linings where minimal
impurities are desirable, commented MacDonald.
Steelmaking refractories also use
monoclinic fused zirconia as the main raw material for
producing stabilised zirconia refractory materials.
According to the industry, there is
no readily available substitute for zircon in over 80% of
Where substitution is
possible, this is mainly due to the use of other
zirconium-derived raw materials, such as naturally occurring
zirconium dioxide, baddeleyite, or zirconium from complex
polymetallic ores, explained MacDonald.
At the moment there is no
alternative to zirconia, confirmed to IM
Giorgio Cappelli, COO division steel the member of the
management board of RHI AG.
There is an alternative using
a synthetic grade but only for few application in the steel
industries, but up to now there is no alternative for the
production of fused alumina zirconia blocks for the glass
furnace, he added.
Recycling is among the new trends
to try to find a solution to these raw materials issues. As
explained by president of Belgium-based Federation Europeenne
des Fabricants de Produits Refractaires (PRE), Robin
Schmidt-Whitley, the proportion of recycled material has
increased slightly over the last decade.
A further increase would be
possible if the user industries were more willing to accept
recycled products, Schmidt-Whitley commented to
According to PRE data, less than
20% of refractories placed in furnaces have to be dumped at
present, and more than 80% are either recycled as raw materials
for refractory or non-refractory re-use, or dissolved in the
slags of the user industries.
Damien Caby, vice president &
general manager, Minerals for Refractories &
Oilfields - Global, Imerys, explained in an interview to
IM that while recycling is of real
interest for managing the refractory products life cycle
and can provide cost savings - especially in the
environment described above where primary raw material prices
are increasing - it also poses its technical challenges,
related to raw material consistency and the importance of
sorting out all material that has had direct contact with
steel (see p.33).
In concrete terms, two thirds
of the refractory lining is worn down by use. The remaining one
third is removed and can be recycled. Only materials that
have not had direct contact with the steel can be recycled back
into refractory applications, he added.
As reported by IM,
RVA is an example of recycling refractories materials. The
France-based company, which is working on developing its new
product Valoxy, takes slags from aluminium smelters and
recycles them into three value-added outputs, including an
unconventional source of alumina for non-metallurgical
applications (see p. 70).
Over the last two decades, the
challenges faced by the world of refractories have multiplied.
With no surprise, issues about raw materials supply and
increase in prices remain the main concern.
Price of raw materials
coupled with non-availability has been a matter of great
concern, said V.V. Rajgopalan president marketing at
Indias IFGL Refractories Ltd. In the Indian
context, developing an indigenous source is the biggest
challenge, he added.
As a consequence, the challenges
for refractories producers are to close long-term contracts, in
a win-to-win approach with the customers. Our focus lies
in using the appropriate refractory materials to improve their
productivity, to reduce the refractory costs per tonne of
steel, use and improve our know-how of their production
processes. This will allow us to improve the supply chain from
the raw materials to the finished products and to have a better
planning of our production capacities, underlined Giorgio
Cappelli, COO division steel and member of the management board
of RHI AG.
This works either way, for both
refractories manufacturers as well as raw material suppliers.
From a raw materials supply perspective the challenge is
to restore stable long-term supplier/customer
relationships, confirmed Alan Roughead, QMAGs
managing director, so that suppliers can secure a price
sufficient to allow them to reinvest in the industry in order
to maintain continuity of supply.
From a buyers perspective,
the idea is to ensure continuity and security of supply in
addition to minimising costs and inventory holding.
Unfortunately far too many buyers only ever focus on
todays price with no regard to value in use, total cost
or the long-term viability of the material, regrets
The energy consumption for the
production of raw materials is another aspect which is gaining
As Andus Buhr, Almatis global
technical director refractories, underlined to
IM, apart from andalusite, all high alumina
raw materials require firing at high temperatures to produce a
dense and shrinkage resistant refractory aggregate, and the
energy input is quite high due to the high refractoriness of
the material. This results in higher energy costs for
Considering the overall
impact of high energy consumption and the corresponding impact
on greenhouse gas emissions, it becomes obvious that the sinter
process is the more sustainable process route for the
manufacturing of high alumina aggregates, Andus Buhr
said, as sinter processes run at lower energy levels when
compared to the fusion process.
The financial crisis also had an
important impact on the refractories industry. Refractories
companies were becoming increasingly concerned about security
of supply and consequently built significant inventories of raw
As Roughead underlined, during the
crisis many buyers stayed out of the market altogether and the
previous orderly supply chain broke down somewhat. Now
buyers try and operate a just-in-time type scenario
which has put extraordinary pressure on the supply chain,
Roughead commented, explaining that it is extremely difficult
to operate a just-in-time system for bulk
industrial minerals unless local warehousing is invested in, as
QMAG do in the European and African markets.
An alternative to this is the
move to refractories companies preferring to purchase on
consignment stock basis in order to minimise the effect of
strategic raw material stocks on cash flow and working
capital, he said.
While most suppliers and buyers
previously held reasonable volumes of material in inventory
which allowed optimum logistics solutions, moving large volumes
cost effectively, such large inventories are almost nonexistent
today, and shipment sizes are smaller.
It is likely that there will be
continuing fluctuations in price as buyers are frequently
forced to pay above market levels to secure material at short
Unfortunately it goes the
other way as well with some suppliers having an abundance of
material in the wrong place at the wrong time, or an abundance
of export licenses at the wrong time of the year, or then again
no licenses available when required. So the orderly marketing
previously seen in the industry has broken down a little,
During the next decade, it is very
likely that supply will affect the sustainability of the
industry and the properties and performance of the refractory
products, owing to the use of low grade materials.
Although the refractories sector is
not close to fixing its raw materials issue, the focus is on
finding solutions to adapt to the new constraints of the
Among the priorities, the race to
find new sources of raw material is more than ever the main
concern at every level of the industry as refractories
producers now tend to acquire their own mineral sources
(exemplified by the enhanced vertical integration priorities of
RHI and Magnesitas Refratarios - see p.36).
As a result, it is expected that
more large refractories producers will become more vertically
integrated through acquisition of magnesia, graphite, and
bauxite production facilities in order to ensure stability of
supply for their customers and to try and ensure a controllable
It is a must to refractory
producers to increase the self-supply with raw materials.
Without having 70-80 % of your own MgO sources it will be
difficult to survive, told IM Cappelli
Alan Roughead, QMAG, believes
refractory raw material buyers will have to support
production and investment in raw materials from sources other
than China and to enter into long-term supply
contracts with various suppliers that provide sufficient return
on investment to ensure security and continuity.
Unless the industry moves
towards this type of market (or something similar) the
availability in the long term is going to be compromised,
he warned, pointing out that improved collaboration between
refractories and raw material producers is a must for the
future of the industry.
Andus Buhr from Almatis said to
IM that the strategic sourcing of raw
materials will be an important factor for Western refractory
Cheap supply of raw materials
from China to Western refractory producers will never come
back, he commented, underlining that Western
producers are facing competition from Chinese refractory
exports where Chinese producers are not suffering from
licenses, taxes, and fees for their raw material
On the other hand, refractory
producers will have to keep focusing on R&D, optimising
industrial process and investing. A service previously
considered as secondary level will become a
The refractories industry
will do a new effort of imagination developing new
solutions, Roberto Caballero from Pasek commented to
IM while Rajgopalan from Indias IFGL
warned that price is going to be the deciding
Shaowei Zhang from Sheffield
University believes that partial replacements might be
possible although in most cases a complete replacement
without compromising properties and performance would be
Developing existing and new
alternatives, maximising recycling, increasing technology to
upgrade lower-grade raw materials, combining purer materials
with lower grade materials, investigating alternative
materials, chemical beneficiation, and reinforcing
R&D are among the main trends to answer the raw material
But this comes at a price.
The challenge is to balance the increasing production
costs by passing it on to the customer, believes Cappelli
from RHI, underlining that the effort that all big
refractory players have to make is to increase R&D to find
alternatives/substitutes to these raw materials.
Cappelli expects in the next five to ten years a strong
consolidation process of the refractory industry especially in
China. Today there are more than 3,000 producers, and as
already said, the service component of the refractory business
will increase and TCO (total cost of ownership), CPT
(cost/tonnes of steel produced), and FLS (Full Line supply)
will be the standard business in the refractory industry,
What are refractories?
Refractories materials have resistance to extreme conditions of
heat and corrosion during the containment of hot and molten
substances and gases. In essence, refractories act as heat
In general, products which are
applied at temperatures >600¡C are referred to as
refractories. The standard DIN 51060/ISO/R 836 defines the
Fireproof <1,500 ºC
Refractory >1,500 ºC
Highly refractory >1,800
Refractory products &
Refractory products are
manufactured as either shapes (bricks) or dry granular or
cohesive plastic materials (monolithics).
They can be classified broadly into
four main categories: acidic, basic, special, and insulating.
The following table illustrates a classification of key
refractory minerals and selected refractory application
Main end user sectors