Raw materials trends in refractories

Published: Wednesday, 03 September 2014

Over the last two years IM has reported on the shifting trends in the refractories industry, with China looking to reduce wastage and increase energy efficiency. Ted Dickson* explores these various trends and asks – how will this shift impact raw material supply?

By Ted Dickson

While refractories manufacturers have developed a whole range of solutions for the requirements of the steel industry, and other consumers, they are still constrained by the raw materials available to them. With ever increasing demands on refractories it has sometimes been difficult to match the availability of even the highest quality mineral raw materials with the operational requirements of the industry.

Not surprisingly, the refractory requirements for different types of heating operations in manufacturing scenarios vary widely, with a correspondingly wide range of refractory materials and products on offer to meet these various requirements. Nevertheless, the refractories family is based on a limited number of elements; aluminium (Al), magnesium (Mg), chromium (Cr), calcium (Ca), silicon (Si), carbon (C) and zirconium (Zr). Except for carbon, which is used in its elemental form, it is the oxides of these elements that provide the most important refractory compounds. Carbides, nitrides and borides are exceptions to this rule, though their share of the overall market for refractories is at present very small and, apart from silicon carbide, they are still regarded as essentially either highly specialised niche materials or experimental advanced ceramics with future potential.

The main refractory compounds are based on either a single oxide, such as silica (SiO2), alumina (Al2O3), magnesia (MgO) or zirconia (ZrO2), or on combinations of these. It should be noted that the oxides of chromium and calcium are generally unsuitable on their own as refractories because of their instability, but in combinations, particularly with magnesium oxide, they form stable refractory compounds of significant value. Combinations of magnesia with alumina chromia, or even iron, have also been developed and zircon can be used in its naturally occurring silicate form or as an oxide, either alone or with other elements such as alumina and silica.

The need to plan ahead

Refractories companies and consumers of refractories, most notably the steel industry, but also cement and lime, glass, non-ferrous metals, ceramics and various other industries where elevated heat is required, do not like to change tried and tested formulations. The consequences of premature refractory failure are far greater than just the cost of relining the vessel. Loss of production from increased downtime, as well as potentially dangerous breakouts from failure of refractories, are of even greater importance. Because consumers are risk averse, they tend not to change refractories suppliers easily, nor do they readily accept reformulation of refractory products. If they do, they are always looking for either lower cost or improved operating performance, preferably both, although lower cost does not necessarily mean lower priced refractories but lower total cost for the lifespan of the product.

Reformulation and acceptance of new products can take years of testing and in many cases involve close co-operation between a refractories company and the consumer. In some cases that can result in a refractories company taking over total control of refractory practice in the consumer’s plant and being paid on the basis of, for example, the amount of steel produced.

Incentives for change involve a range of factors; escalating or rapidly fluctuating prices of raw materials, disruption of supply or a general decline in availability or quality as well as changes in the technology of the consumers. Short term disruption of supply can be one of the most difficult to handle. Generally there is some time to adjust to supply issues, although it needs constant monitoring and attempts at forecasting to look at either developing alternative supply sources or different formulations that will be more economical or perform to a higher standard.

There has been a long term trend towards the use of lower volumes of higher performance materials that increase the working life of refractories, although changes in technology, for example in the steel industry, have also contributed to the extension of the operating lifespan of vessels. This is also a significant factor in the production of higher quality steel.

The demise of the open hearth furnace (although there are still a few in operation) resulted in a substantial decline from 50 or 60kg of refractories per tonne of steel to as little as 7kg in the very best performing steel mills. Average consumption of refractories per tonne of steel is of the order of 10kg per tonne in Europe and North America, somewhat less in Japan but still at high levels in China, with as much as 22 or 23kg per tonne in recent years.

The development of steel making technology required higher performance refractories in some parts of the modern casting steel mill, technologies that would not have been viable without advanced refractory products. These included higher grades of magnesia alumina based refractories and even some parts requiring advanced carbides or nitrides. There are still improvements in steelmaking and refractory practice being made, although these tend to be more evolutionary rather than revolutionary, with less impact on overall demand than the change from open hearth steelmaking to BOF or EAF furnaces or the advent of continuous casting.

The China effect

Over many years China has had a major influence on the supply, and more recently, the demand for refractory raw materials. It is well known as a major producer and exporter of magnesia, refractory bauxite, brown fused alumina, flint clay, silicon carbide and graphite. It also has some production and intermittent exports of white fused alumina and has become a significant producer of tabular alumina as well as dolomite based refractories. There are also considerable amounts of refractory clays produced, mainly for local consumption, as well as some relatively recent development of andalusite production.

In the 1980s and 1990s, China had developed as a large supplier of low cost refractory raw materials, especially refractory bauxite and magnesia. Prices were low, and while there were at times concerns about absolute or consistent quality of products out of China, the quality improved over time and, in most cases, consumers in the export markets either found the grades available more than acceptable or managed to adapt to control the quality. Many of the western magnesia producers found it hard to compete and Guyana lost its significant lead in the refractory bauxite market, one where it was considered to be a premium product but at a considerably higher price.

All of that has changed in the last decade. Chinese demand for refractories grew strongly in its steel and other industries while government policy changed significantly with regard to exports. Selling raw materials cheaply in world markets was replaced with a drive to sell added value products and exports of many raw materials including bauxite magnesia and graphite were restricted by the introduction of an export licencing and taxing policies. This, along with increasing costs of production, primarily for fuel as oil prices escalated, resulted in substantial increases in pricing.

To a large extent prices have become more stable, but there were opportunities for producers outside of China to compete more effectively, resulting in greater production from new or revived operations. Guyana regained a larger share of the bauxite market, with the price differential between Chinese and Guyanese grade virtually disappearing, although by that time the Guyanese producer had been purchased by Bosai Minerals of China.

Restrictions on exports of many materials from China, including refractory raw materials, have been ruled to be in violation of World Trade Organization (WTO) rules and some, but by no means all, have been removed. However, demand in China is still high and costs are increasing. Chinese environmental laws are becoming more demanding and, perhaps more importantly, local authorities are policing and enforcing the laws more stringently, including greater efforts to eliminate illegal mining and processing operations that were frequently the most polluting.

It is also expected that sourcing some of the higher grades of raw materials from China may be more difficult in the future. There has been a degree of high grading of deposits in the past, especially from the smaller inefficient, often illegal and environmentally unsound operations, resulting in a decline in the overall quality of the remaining reserves. In the case of bauxite there has been considerable competition for raw material from the rapidly expanded alumina and aluminium industry in China.

Unlike refractory raw materials, products derived from these have not been subject to export controls. There has been notable development of magnesia carbon bricks production based on the large local production of comparatively low cost magnesia and graphite, both for domestic and export markets. This has grown to such an extent that trade in magnesia carbon bricks, at very competitive prices, has been virtually commoditised, to the dismay of some Western producers.

It should be noted that many refractories producers have set up operations in China, both to serve domestic markets and export finished products. These include all of the top five producers in the world in terms of sales; RHI-AG, Vesuvius, Shinagawa Refractories, Krosaki-Harima Corp. and Magnesita. However, a number of other refractories manufacturers, including the Imerys subsidiary Calderys, Orind of India and Allied Mineral Products of the US, also have plants in China.

Another factor in the availability of high quality refractory raw materials from China has been moves to modernise refractory practice. This is likely to result in greater domestic consumption of high performance materials and could well lead to less of the highest grade material being available for export.

Continuing increases in steel capacity, using best practice technology, combined with a move to production of cleaner steel, tends to require the use of high performance refractories. An example of recent developments has been a surge in new local producers of tabular alumina in addition to the long established Chinese production by Almatis, with demand tending to be in high performance refractories in applications such as steel ladles or flow control materials.

While China is expected to remain an important source of refractory raw material for the world, the availability of higher quality materials may be stretched, possibly with an upward pressure on prices. While export taxes and licences may be eliminated or moderated because of WTO rulings, cost of labour, energy, environmental compliance and resource taxes are also likely to add to local production costs resulting in higher prices for raw materials to domestic consumers and replacing the current costs of export compliance. Because of this, exploration and development of resources has been growing elsewhere in the world.

Raw material trends

The chart below shows rough estimates of consumption of some of the main refractory raw materials. It is difficult to reconcile the amount of raw material used with refractory consumption as the total represented in the chart only comes to about 35m tonnes, whereas total consumption of refractories is currently estimated to be over 40m tonnes. However, the chart excludes material used as binders (with the exception of CAC), insulating refractories such as ceramic fibres, and some specialty refractory materials. An estimate is included for recycled refractories, which tend to be limited to non-critical applications, but this is a growing trend. At least part of the discrepancy will likely come from incomplete figures for both refractories and raw materials in the domestic Chinese market, which represents more than half of all refractories consumption, as high as 65% by some estimates.

Each of these raw materials has its own issues, some of which are discussed in more detail below.


In its broadest sense, the alumino-silicates, incorporating everything from silica to alumina, are the largest group of refractory raw materials. Refractory clays are estimated to be the largest single group of minerals used in the refractories industry, amounting to a total of as much as 16m tonnes, although that is very difficult to estimate as there are many small operations still producing relatively low grade clays.

Total usage of refractory clays is considerably below historical levels when low alumina fireclays were extensively used, as much as 6m tpa in the US alone in the 1950s, and current world usage, while still high, is a fraction of what it was at its peak. While some of these were low alumina clays still used in less demanding applications, much of the production now is high purity kaolin with alumina contents of about 47%, or bauxitic clays, such as the Mulcoa range from Imerys that have elevated alumina contents with up to as much as 70%. There are also a number of ball clays used as binders for refractories as well as some bentonite clays.

Availability of clays is not seen as a major long term issue for refractories manufacturers. There has been some short term disruption in supply of some grades of high alumina calcines from Imerys, but the company explained that an overrun in planned maintenance on a kiln at its plant, combined with an unusually harsh winter weather for a southern US state, was the cause of this temporary issue. There may however be some issues with supplies of some calcined clays for refractory applications and ball clays for binders from operations in Ukraine due to the continuing conflict in the region. Ukraine is a large producer of these clays, much of it for the ceramics industry, but with a portion destined for refractory applications. Should there be longer term disruption, there are other world sources of such clays, although it may take some time to increase production and there may be a period during which availability will be tight and costs may increase.

Production of the sillimanite group of minerals is concentrated in few countries, and in the hands of very few companies, but the supply has tended to be very stable and able to meet supply requirements. While there are few sources of kyanite, with a large portion of world production from a single operation in Virginia, US, there are no major supply concerns.

Andalusite supply has been increasing with expanded supply from Imerys at its South African and Chinese operations and stable supply from its French operations as well as from Andalusite Resources of South Africa and the relatively new supplier, Andalucita in Peru, which has already doubled its initial production capacity to 30,000 tpa.

Calcined bauxite has been a concern to many consumers for some time. While supply has been adequate in the recent past, part of that has been due to decreased demand during the recession. China is the dominant influence on the market, both from China itself and Chinese ownership of the operations of other major suppliers to world markets in Guyana. In 2008, there were considerable concerns about availability of supply out of China and declining or variable quality of supplies.

It was not just the export restrictions that were causing supply problems and higher prices. Many operations in China had been closed due to environmental concerns. There was also strong competition for suitable raw bauxite for calcining due to high demand from the Chinese alumina industry. This, along with high fuel and other inputs resulted in raised domestic costs, leaving little or no room for profit margins, even though prices of bauxite had increased substantially, they have since moderated.

There has been increasing supply out of Guyana, although still well below levels at its peak in the late 1970s and First Bauxite has plans to open a new 100,000 tpa refractory bauxite unit in Guyana. In Brazil, Imerys has purchased assets from which a refractory grade calcined bauxite was previously produced by MSL Minerais. The company apparently plans to redevelop the operation as a supply of refractory grade bauxite for the future.

Brown fused alumina (BFA) is derived from calcined abrasive grade bauxite, with generally a lower specification than that of refractory grades, with greater tolerance for iron and some other impurities. A large portion of the production is in China and there are some of the same concerns about availability of the locally produced diasporic bauxite in competition with alumina producers that have a great deal of influence given the much larger volumes they buy. There have also been some concerns about the cost and availability of electrical power in China, which could influence both supply and price of BFA in the future.

White fused alumina (WFA) production is much less reliant on China with significant production in a number of other countries including Russia, the EU, the Americas and Japan. As the raw material is calcined alumina there are many available sources, although production tends to be in regions where electrical power is relatively low cost. There has been some recent production and exports from China though Chinese production has historically been variable with many consumers preferring to stay with long term stable suppliers to ensure that they receive consistent quality material.

Tabular alumina production is well established with few producers and in the longer term supply matching demand. Almatis as the largest with production in Europe, North America and China, plus Alteo in Germany, Silkem in Slovenia and the recently enlarged production from Aluchem in the US. However, there has also been a surge of new producers in China, with reported new production capacity of over 200,000 tonnes in addition to the existing 50,000 tpa capacity at the Chinese plant of Almatis. Production levels may not be as high as that and to date there has been little indication of any exports. It is a further indication of a growing sophistication of the Chinese refractories market as tabular alumina tends to be used in high performance refractories, although it may take some time for the market to be able to absorb all of the newly available capacity.

Calcined alumina is used directly in refractories (the figure shown in the table) but is also the feedstock for tabular and white fused alumina, as well as one of the components of high alumina CAC, and fused and sintered spinel and mullite. The raw material is derived from Bayer alumina refineries, although in at least some cases specifications tend to require lower soda contents than metallurgical alumina and a higher degree of calcining.

While there were concerns that all new Bayer alumina plants, and most of the existing ones, were being fitted with fluidised bed calciners that did not have high enough temperatures, or long enough residence times to result in optimum specification for refractory grades, that does not seem to have caused problems in the sector as speciality producers can still accommodate this feedstock. In the longer term, supply of alumina for refractory purposes is reliant on the supply/demand balance for metallurgical grades. There does not seem to be any problems with supplies through to about 2017 on current projections and prices have been relatively stable.


There had been many concerns about the availability and pricing of high quality supply of both deadburned magnesia (DBM) and electric fused magnesia (EFM), particularly because of export restrictions from China, as well as high local demand in China, both for the domestic refractories industry and for magnesia carbon bricks for export. Because of this, there have been increases in capacity outside of China and some companies, most notably RHI, have pursued a policy of becoming totally, or virtually, self-sufficient in magnesia supply. Through acquisition and construction of new capacity that process is essentially complete in the case of RHI.

Magnesita in Brazil was already essentially self-sufficient as a seller of magnesia and has also developed graphite capacity to improve supply security. Other large refractories companies that are vertically integrated for magnesia include Magnezit of Russia and Kumas of Turkey. With the drive to self-sufficiency, at a time when demand has been subdued, there would appear to be more than sufficient capacity for high grade DBM and EFM for the medium term at least, and there is likely to be a degree of stability until growth in major economies outside of China picks up. Pricing has come down considerably from the peak and there seems to be little pricing pressure until the steel and cement industries throughout the world show significant recovery in growth.


Dolomite refractory production tends to be in the hands of a few vertically integrated producers. Because of a tendency for hydration of calcined dolomite, these tend to be specialised companies with expertise in handling the material and producing products from it at, or near, the site where the dolomite is calcined. The largest producer is LWB, now part of Magnesita, although others such as RHI, Kumas, and Resco Products are also producers. Because all of these companies have their own mines for dolomite, or long term supply agreements with more than adequate reserves, there is not seen to be any issues with raw material supply.


There have been long term supply issues with zircon for many years, and indeed decades. The supply of zircon is inelastic because it is intimately associated with the production of titanium mineral sands, from which it is a by-product. There is also the factor that consumption of zircon in refractories is only a small proportion of the total demand, with the ceramics industry driving much of the market, especially Chinese ceramics production. As a result there have been cycles with, at times, large shortages of material and escalating prices, the most recent with its peak in 2012, and while prices have more than halved from the peak, they are still well above the levels of 2010.

Each time there is a problem with supply and pricing there are efforts to substitute zircon. To a certain extent this has been successful in the foundry industry, with alumina, sillimanite minerals, chromite and olivine able to substitute in some applications. However, substitution has been less pronounced in some of the more demanding applications, such as in fused cast refractories for the glass industry, which is seen as very conservative and can take two years or more to test and approve the use of alternative refractories in their vessels.

There were also problems with supply of coarser grained material preferred for some refractory applications, a significant portion of which was derived from the Eneabba deposit of Iluka, which was closed but then re-opened. No real solution to the inelastic nature of zircon supply, resulting in some extreme pricing and availability cycles, is seen, although each time it happens there are great efforts to find suitable replacements. In some applications zircon is simply the best refractory for the job, but should there be long term supply problems, solutions will be developed that will suffice.


Graphite is another market that has seen considerable fluctuation. Historically, much of the supply of flake graphite used in the refractories industry has come from China. However, with predicted high growth in demand from other applications, such as batteries, there have been a large number of companies either exploring for, or developing, new deposits outside of China. This activity was further spurred by widely fluctuating prices in 2010/11. It is common in these circumstances for excess supply to develop.

Despite forecasts of rapid growth in battery demand for flake graphite that would be in direct competition with refractory requirements, the refractories industry is still the largest consumer of flake graphite. While the level of competition from the battery industry is still less than many have predicted, there is a strong possibility that in the longer term this could pose a serious competitive threat to supplies for refractories and potentially significant increases in pricing.

Refractories manufacturers outside of China have already had to face strong competition from China for magnesia carbon bricks, as domestic supplies in China are not subject to export taxes or licences, giving a significant cost advantage. Refractories companies, most notably Magnesita in Brazil, have looked at securing supply by developing their own production, although this has not been to the same level of self-sufficiency in the industry that has been achieved with magnesia.

There is still a considerable threat to future supplies of good quality flake graphite should the battery industry develop at a faster pace and Tesla’s proposed huge battery plant in the US (see p10) is projected to need a very large quantity. However, developments in the battery industry have tended to be slower than predicted. It would seem that in the medium term there will still be sufficient supply of graphite for the refractories industry.

Looking further ahead, refractories producers must be concerned about securing supplies, though there may be moves towards tie ups with existing or potential producers or the development of a degree of self-sufficiency.

General raw material issues

With the exception of zircon, and to a certain extent high grades of graphite, there are few short term problems with refractory raw material supplies at the moment. Recovery in demand for refractories is still not strong resulting in a moderate demand for raw materials. Should the recovery gather momentum there is likely to be a period of adjustment where supply will be tight for many materials.

Companies were caught with large stocks of many materials when the recession hit and since that time they have tended to purchase on a short term basis and hold stock at below traditional levels. Short term problems could arise as a result of this, until the market rebalances at appropriate levels.

In the longer term, most concerns involve reliable supply of calcined bauxite, zircon and graphite. Either new resources of these will need to be developed or the companies in the industry will have to find alternative solutions. Ultimate consumers, such as the steel industry, tend to be concerned more with the performance of the refractory products they use than the raw materials that go into them, although these are intimately related.

The consumer is looking to receive overall solutions to their requirements rather than simply buying product. As a result, it generally falls on the refractories manufacturer to come up with those solutions, although it can be a slow process and concerns about raw material supply tend to drive research into those solutions.

* Ted Dickson is a UK-based consultant, specialising in the markets for industrial minerals. He has extensive experience in the markets for refractory raw materials including publication of multi-client studies on non-metallurgical bauxite and alumina as well as a study of the world refractories industry