Japan, along with South Korea,
Taiwan, and more recently China, has been one of the great
refractory markets of recent times. One of its key
characteristics is that it has always been at the cutting edge
of refractory development and refractory raw material
usage - driven in large part by its pioneering steel and
metals industries.
Another characteristic has been the
market’s reliance on imported refractory minerals, the
country being poor in natural resources for this key industrial
mineral market.
Despite its “ahead of the
pack” badge of honour in refractory development, like most
developed countries, Japan’s refractory market is also
hostage to the peaks and troughs of the national economy as
well increasing efficiencies in steelmaking technology.
Since 2001, Japanese refractories
production has dropped by about 117,000 tonnes, despite an
overall increase in the country’s steel production
(see charts).
From 2003 until 2007, refractories
production was maintained at just under 1.2m, peaking at 1.2m
in 2007 matching the peak in steel output at 121m. in the same
year.
Although industrial refractory
markets (eg. glass, cement, lime etc.) play an important part,
the industry is driven by demand for steel refractories, which
usually accounts for 70-75% of Japan’s refractories
production.
The two most noticeable trends have
been the increase in refractory monolithics use at the expense
of shaped refractories, and the overall decrease in specific
refractory consumption in end product manufacture (ie. steel,
glass, cement etc.).
Shaped production declined from
478,300 tonnes in 2001 to 379,000 tonnes in 2010, while that of
monolithics has been more or less maintained at around the
750,000 tonne level. The ratio at present is around 66%
monolithics to 34% shaped refractories produced in Japan.
As is the lot of the refractory
business worldwide, its principal customers demand higher
quality products in order to reduce their overall refractory
consumption.
During the last few decades, Japan
has seen an overall declining specific refractory consumption
per tonne of steel produced, which now stands around 7.4kg/t
steel overall (see chart).
In contrast, the consumption rate
in 1980 for Japan was 15kg/tonne steel. For perspective, in
China it was 55kg/tonne steel in 1980 and is now around
20kg/tonne steel, although this is expected to drop further and
more quickly as modern technologies are implemented.
It is in the shaped refractories
sector where the more significant decline in Japan’s
refractory consumption rate has occurred, from 3.1kg/tonne
steel in 2001 to just 2.2kg/tonne steel in 2010.
Consumption of monolithics dropped
from 5.6kg/tonne steel in 2001 to 5.2kg/tonne steel in 2002,
but has remained more or less at that level since.
Steel is by far Japan’s top
market for refractories, accounting for 80% of monolithics and
just over 70% of shaped refractories.
However, with steel demand on the
wane at present, the industrial markets of cement and in
incinerators are showing encouraging signs of growth in demand
for refractories (see below).
Regarding production of refractory
type by composition the main workhorse products remain based on
refractory clays, aluminas, and magnesia.
In recent years there have been
notable decreases in Japanese refractories based on fireclay,
silica, chromite, dolomite (actually ceased in 2010), spinel,
zircon, and graphite.
The main influencing factor here
has been scarcity in certain raw materials combined with
changing mineral requirements as new refractories are
developed.
Steel setback
Japan’s steel industry is experiencing a setback at
present, which is not expected to be revived, at least
significantly, in the near future.
According to the World Steel
Association (WSA), world crude steel production for November
2011 was recorded at 116m tonnes, just 1.1% higher than
November 2010.
Japan produced 8.7m tonnes of crude
steel in November 2011, a decrease of 3.2% compared to the same
month in 2010.
Elsewhere in Asia in comparison for
that month: China’s production was 49.9m tonnes, a slight
decrease of 0.2%; South Korea’s was 5.8m tonnes, up
12.4%.
During 2011, Japan’s monthly
crude steel output fluctuated between 8.4-9.8m tonnes, and for
the eleven months to November 2011, was down 1.2% over
2010.
Owing mainly to disruptions caused
by the Tohoku earthquake in Japan in March 2011, in its short
term outlook for 2012-13, the WSA expected Japan’s steel
use to decline by 2.7% to 61.8m tonnes in 2011, while apparent
steel use in Japan for 2012 is forecast to show a growth of
just 0.8%, to 62.3m tonnes. This represents just 77% of
Japan’s 2007 level.
Leading Japanese steel producers
recently announced their production forecast for 2012 as 6-7%
down on 2011.
Dr Masanori Ueki, secretary general
of the UNITECR 2011 organising committee and of Krosaki Harima
Corp., told IM: “Since the demand of
refractories in Japan is proportional to the production of
steel, refractories demand will be decreased 5% or
6%.”
Although little at this stage can
be ascertained for 2013, Ueki pointed to the impending merger
of Nippon Steel Corp. and Sumitomo Metals Industry as creating
some potential new demand for refractories for anticipated
overseas operations.
Cement for post-earthquake construction
Japan’s cement industry has been somewhat stagnant in
recent years and thus not a particularly healthy outlet for
refractories, but the reconstruction programme in response to
the March 2011 earthquake is expected to galvanise the Japanese
cement business for 2012.
Construction work that had been
suspended across Japan because of the disaster has now resumed,
leading to a spike in cement demand.
The Japanese government has decided
on a JPY12 trillion reconstruction budget in the earthquake
disaster area. This will be used for the reconstruction of
large infrastructures such as rivers, seashore, roads,
railroads, airports, and ports.
Sales have also been strong for
cement used in concrete blocks for breakwaters, and with
nuclear reactors closed, cement was used in construction to
boost output at fossil- fuel-burning power plants.
The Japan Cement Association
estimates that 10m tonnes of cement will be used for such
reconstruction projects.
As a result, post-earthquake
reconstruction demand is expected to boost pre-tax profits for
leading Japanese cement producers - Taiheiyo Cement Corp.,
Sumitomo Osaka Cement Co., Mitsubishi Materials Corp., and Ube
Industries Ltd - by a combined $411m until 2016.
Taiheiyo Cement accounts for almost
40% of the market in Japan’s north-eastern Tohoku region.
Reconstruction demand is expected to increase its cement sales
by nearly 4m tonnes, translating to a $37.4m contribution to
pre-tax profit annually for the next five years.
Of course the other silver lining,
or rather cement rotary kiln lining, from this reconstruction
programme is the anticipated demand for cement kiln
refractories during 2012 as cement producers raise kiln
utilisation rates to meet the projected demand boost.
This will see increased demand for
magnesia-spinel and dolomite refractory bricks in
particular.
Dr Ueki commented: “Demand for
cement producers will increase by up to 10% owing mainly to
reconstruction from the disaster in March last
year.”
“Eco-Refractories” on the horizon
The evolution of a new generation of industrial furnaces driven
by new and emerging energy sources is envisaged as an important
new application area for future refractories development and
consumption.
The subject was well presented by
Dr Kiyoshi Sugita in his paper, “An introduction to the
‘Age of Eco-Refractories’”, at last
November’s UNITECR 2011 Congress in Kyoto, Japan.
Essentially, greener-types of
energy sources such as solar, wind, tidal, geothermal,
hydrogen, nuclear, and biomass will demand new furnace
technologies including furnace design, control systems,
refractories, and insulating materials.
Also increased utilisation of
alternative fuels, such as waste and recycled materials, will
also change furnace design concepts.
The move to larger and more
continuously operated blast furnaces, where Japan has always
led, will also continue its trend in raising energy
efficiencies and reducing CO2 emissions.
There is expected to be more
electrically powered furnaces in operation in the future with
more elaborate heating patterns and more precisely controlled
atmospheres.
The development of hybrid or
combined heating systems for furnaces, ie. a shift away from
single heating system furnaces, is also likely in the future
according to Dr Sugita.
In summary, future refractories
will be expected to address:
- energy
conservation
- lowering
CO2 emissions
- material
design utilising abundant natural raw materials and recycled
waste
- higher
performance and more suitable refractories to meet demands of
more diversified furnaces
- multi-functional intelligent
refractories by utilising functional materials
- restructuring refractories technology
and R&D methodology
Raw materials in short supply sought outside
China
The accompanying table and chart show the variety and volume of
refractory raw materials that are consumed by Japan’s
refractories market.
Of note is the reliance on imported
materials. Japan only has significant domestic sources of
calcined aluminas, synthetic dead burned magnesia, spinel, and
some refractory clays.
In 2010, of the total 943,000
tonnes of refractory raw materials consumed in Japanese
refractories, about 40% (373,200 tonnes) was derived from
imports.
Another 40% (361,000 tonnes) was
derived from processed raw material, of which it is considered
at least 50% is imported as well.
Therefore, the total import
reliance of Japanese refractory raw materials could be as much
as 60% of total consumption.
China has historically been an
important source of certain refractory minerals for Japan.
Japan has had a high dependency ratio from China for brown
fused alumina (95%), bauxite (95%), graphite (90%), sintered
mullite (85%), dead burned magnesia (85%), fused magnesia
(70%), chamotte (45%), spinel (35%), silicon carbide (25%), and
white fused alumina (25%).
Like other consumers, Japan is
having to seek alternative sources elsewhere as Chinese supply
becomes constrained, unreliable, and unpredictable in both
pricing and supply consistency.
Dr Ueki told IM:
“Sourcing graphite, especially, is quite a serious
difficulty, as it is with magnesia. Purchasing divisions of
refractory producers are struggling every day to seek any
cheaper sources other than China. Battery use of graphite is
making demand tight for refractories.”
Other key refractory minerals imported from outside China,
include zircon, zirconia, and chromite.
