China dominates global production
of refractory bauxite, accounting for 77% of the market share
in 2011. Other major producers are Russia, accounting for 9% of
refractory bauxite production in 2011, Guyana with 6% and India
with 7%. Brazil accounts for about 1% of market supply.
Most of the production of calcined
bauxite in China, which includes abrasive and refractory grade
bauxite, takes place in the Guizhou, Henan and Shanxi regions
through about 20 producers.
According to Lee Bray, bauxite and
alumina analyst for the US Geological Survey (USGS), the
biggest issue facing producers is the restricted supply of
refractory grade bauxite, and a strong dependence on China.
Probably the biggest issue is
availability because China is such a large source of refractory
grade bauxite and it has had export barriers in the past, such
as quotas on the volume and export taxes, which have been a
concern in the past, he told IM.
In January 2012, the World Trade
Organization (WTO) found China guilty of restricting trade of
certain key steelmaking minerals, including refractory grade
bauxite. The findings meant that the Chinese government had to
remove charges and restrictions, which the European Union (EU),
Mexico and the US were claiming had unfairly restricted the
flow of these industrial minerals onto world markets.
The restrictions inflated global prices, while reducing prices
in the Chinese market, giving Chinese companies consuming these
materials an unfair advantage against foreign competitors,
effectively violating Chinas commitments made upon
joining the WTO in 2001 on trade liberalisation.
While the cancellation was greeted
with relief from global bauxite consumers, many suspected that
the Chinese government would find alternatives to recoup its
lost revenues, and Bray questions whether a marked difference
has been made.
The ruling by the WTO
concerning those exports essentially forced the Chinese
government to lift those export barriers. Whether or not more
bauxite is going to make its way into the market in light of
those rulings from the WTO, I think is still yet to be
seen, he told IM.
My understanding is that
there is still some concern over availability. China is one of
the main suppliers but there really arent a lot of other
suppliers outside of China and Guyana for refractory grade
material, he added.
Chris Wragg, group supply chain manager for Capital
Refractories, adds that another difficulty for refractory
producers sourcing refractory grade bauxite, is the lack of
industry standards across materials.
In the world of refractory
materials supply, many materials are relatively specialised and
with no industry standards, there are often few suppliers of
the same products. One consequence of this is it makes the
world of refractory raw materials supply a rather smaller place
than might normally be expected, he told
He explained that unlike the supply
of some industrial minerals, where suppliers are located near
to each other providing a similar standard of material that is
fully interchangeable, many refractory materials are unique.
This, he says, forces consumers to source on a global scale to
satisfy their needs.
Russia accounted for around 9% of
refractory bauxite production in 2011, much of which was used
domestically for high alumina refractories in the iron and
The bulk of production comes from
JSC Severo-Onezhsky Bauxite Mine (SOBR) in Arkhangelsk, and new
production came on stream from UC Rusal in 2012.
With 6% of the refractory bauxite
market share in 2011, Guyana is another important source of
supply and the main competitor to Chinese material. Roskill
estimates that production levels were around 180,000 tonnes in
The countrys major refractory
bauxite producer is Chinese-owned Bosai Minerals. Future
production will potentially come through First Bauxite
Accounting for 1% of the refractory
bauxite market, Brazil produces a small amount mainly for use
in the domestic market.
Refractory grade bauxite from India
is mainly sourced from Gujarat State. The country accounted for
7% of market supply in 2011, with production of around 200,000
tonnes. Major producers include Ashapura Minechem, Bombay
Minerals Ltd, Gujarat Development Corp. and Orient
In recent years, refractory
production has shifted to emerging markets with an increased
production in China.
As the largest end market for
calcined aluminas, refractories accounted for just under 60% of
the market share last year. Ceramics accounted for around 24%
of the calcined alumina market in 2012, while abrasives
accounted for just over 10%.
Demand for refractory grade
bauxite is of course related to output in the steel industry,
which has been growing a little bit in the past couple of
years, Bray says.
Global crude steel production is
the largest end-market for refractory minerals such as alumina,
andalusite, bauxite, graphite, magnesia and zircon, accounting
for around 70% of world refractory consumption. Crude steel
production has been driven mainly by growth in Asia, which has
offset weak production in the CIS and EU.
Recent figures from the World Steel
Association (worldsteel) indicate that year-on-year (y-o-y)
global crude steel production has increased by almost 2% in
2013. As the largest producer, Chinas crude steel
production grew 6.2% to 65.5m tonnes. Asia accounted for over
half of world production with a total of 89.1m tonnes. India
saw similar growth to that of China, and a smaller increase was
seen from Japan.
The Middle East also saw large
increases, with the region growing by 23.4% to almost 2m tonnes
crude steel, a figure buoyed by a 64.5% increase y-o-y from
Saudi Arabia, which produced 464,000 tonnes in July.
Negative trends continue in the EU,
Turkey and Russia however as these were all regions to record
declines yet again.
Crude steel production for the US
increased by 3.3% y-o-y to 7.6m tonnes, though the overall
increase for North America was just 0.1% due to declines from
both Canada and Mexico.
Whether or not demand in the
US is enough to justify further capacity, I'm not sure, and of
course theres the cost issue, Bray told
It might be still cheaper to
import material from China than it is to mine it here in the
US, so there are various factors playing into whether or not
domestic output will increase, he added.
The refractories industry is
forecast to grow out to 2017, and Roskill predicts that it will
stabilise towards the end of 2013, with recovery beginning from
2014. This will offer some opportunities for growth in
refractory bauxite grades, particularly in China.
A new report by Materials
Technology Publications forecasts that world refractories
production will increase from 41.5m tonnes to 46m tonnes with
much of this driven by China.
However, the unit consumption of
refractories per tonne has fallen and total consumption of
refractory grade bauxite has been declining globally over the
last few years.
Disappointing growth in the steel
industry aside, changes in technology - such as a shift from
shaped bricks to monolithic and a move from bauxite-based
refractory bricks in larger applications, like steel ladels, to
the use of basic refractories such as magnesia and dolomite -
have also contributed to lower consumption.
Steel industries within developing
countries are adopting more sophisticated technologies and
replacing old refractory plants. All of this means that
although there will continue to be growth in demand for
refractories, and so creating opportunities for refractory
grade bauxite, this is likely to be at a slower rate than
Prices of non-metallurgical bauxite
depend on the composition of the material, which determines the
end use, and the country of origin.
Refractory grade is a higher
price, and it depends on the source. The material in the other
grade has a wide range of composition in terms of its silica
content and alumina content so if you look at figures from
2011, the imports into the US from Greece were probably the
lowest price per tonne, you'll find theres a wide
range, Bray told IM.
As the lowest purity material,
cement grades have the lower price in terms of non-metallic
At the end of 2012 and early 2013,
prices for calcined bauxite out of China increased by around
$8-15/tonne due to the tightening of raw material supply.
Pressure from the WTO, which led to the cancelling of bauxite
licences for 2013, stimulated higher demand for bauxite
exports. This is turn led to price increases.
The alumina refractory market is
expected to grow at a rate of 2.8% CAGR between 2012 and 2017,
however the refractories industry has still faced difficulties
due to rising energy costs, increased raw materials and poor
steel industry demand.
As high alumina refractories used
in the steel industry are the main end market for refractory
grade bauxite, demand and growth will remain closely linked to
the steel industry. Future demand is expected to come from Asia
- specifically from China and India - Brazil, and the Middle
Much of the production of
refractory grade bauxite in India is consumed domestically
however, and increased demand in the country means that
domestic consumption is likely to continue.
I have heard talk that India
may have some deposits that are suitable for use as refractory
grade material and I would expect that those would be
developed, Bray told IM.
The problem that occurs with
India is that it sometimes has regulatory hurdles to new
developments, its a very complicated bureaucracy with the
Indian government, so developments of new projects in India are
possible in the future but its a matter of the political
climate, he added.
In terms of other potential future
production, with increasing demand increased production in
Brazil is also a possibility.
There are some other regions
of the world that might have potential for refractory grade
bauxite. Brazil for instance - theyve produced in the
past and its my understanding that they are not producing
anymore, but they may have some reserves of refractory grade
bauxite that have not been developed yet, Bray told
Bray added that increased
production of refractory grade bauxite in the US is
As for the deposits in the
US, I dont know if they really have the capability of
increasing their output. My understanding is that they probably
wouldnt have a lot more production in the future,
Bauxite is a good example of
where too much of the global supply is controlled from too few
places. Im sure that many users would welcome a new
source of good quality refractory grade bauxite, Wragg
There are a number of expansion projects planned in India,
Brazil and Russia but much of this new capacity is likely to be
consumed domestically due to increased internal demand.
Therefore, though new refractory grade bauxite supply would be
welcome to decrease reliance on China, consumption is likely to
remain dependent on output from China and Guyana.