Rising competition and falling demand in the European
ceramics industry is testing the ability of raw materials
suppliers and manufacturers to maintain both margins and market
Ceramic materials form the basis of everything from roof
tiles and wash basins, to proppants for fracking, to technical
ceramics for high temperature industrial processes, and
represent a major segment of the global industrial minerals
Although overall global consumption of ceramics is growing
at a modest pace – supported particularly by demand
for white ware and sanitary ware in emerging Asian economies
– the level of market expansion has not been enough to
sustain production capacity in all parts of the world, or
prevent prices from weakening.
"In China, we have definitely seen a decline," said Harry
Li, a marketing representative of Zhengzhou Zhengzhong Fuzed
New Materials Co. Li was speaking to IM at
Ceramitec 2015 – a trade fair for the ceramics
industry held every three years in Munich, Germany.
Many exhibitors at the 2015 meeting noted how the event had
shrunk over the last decade, filling just four halls at the
Munich Messe this year, when earlier shows had covered eight or
more of the Messe’s sprawling exhibition spaces.
This, attendees said was a reflection on both the weak
condition of the ceramics industry and the fact that much of
its business is now done online.
While e-commerce is cheaper than physical exhibitions and
allows suppliers and customers to connect at the click of a
button, the former trend is more worrying.
Li, whose company mainly produces fused zirconia powders for
refractories, said that while there may be some pockets of
growth, broadly speaking, Chinese ceramics demand was cooling
He added that Europe was still an important market for
Zhengzhong as Chinese raw materials still have a strong
position in the international supply chain because of their
For traders of the minerals, the situation is also becoming
increasingly tight. "Margins are down to single digits," one
Germany-based representative of a major minerals supplier told
IM. He said that, in some cases, real prices
for ceramic minerals were up to $50/tonne lower than publicly
quoted values, owing to heavy discounting and aggressive
bargaining by buyers under pressure.
"The refractory ceramics market is very difficult,
particularly with the steel industry the way it is," one
source, who buys ceramic minerals in China and supplies them to
European customers, said. The source dismissed suggestions that
consumption of refractory ceramics would rebound next year.
"We don’t see a recovery in the steel industry
on the horizon; I think it will be tough for some time," they
Higher and wider
In order to bolster revenues, many ceramic materials
producers are focusing on higher purity premium products and on
broadening their offering.
Miriam Niedenhof-Ducker, sales and marketing manager for
speciality products at Japan-based Ube Group, said that the
company’s business was doing well.
Ube’s speciality products arm makes silicon
nitride and silicon carbide powders, which it produces to high
purities for end markets including precision machinery parts,
semiconductors, aircraft and automotive parts.
"Our material is very high purity, so people choose it for
the performance," she told IM. In such cases,
where the functionality of the end products depends on the
quality of the constituent materials, market share is safer
than for lower quality, more widely available materials.
Ube uses a patented production process to produce powders
with particles of uniform size – "this is very unique
in our industry," Niedenhof-Ducker said.
Graham Lewis, managing director of chemicals distributor
Norkem, also said that value addition to raw materials was an
important way of protecting revenues.
The company, which has offices in the UK, Belgium and
Australia, said that the market picture was mixed across the
world, but that the UK was doing well, thanks to an active
housebuilding market. "But the rest of Europe is struggling,"
he said. "In Belgium and the Netherlands, we have seen some
signs of improvement, but generally it’s quite
Although there are localised recoveries in ceramics demand,
particularly sore points in Europe were identified as tile
demand in France and consumer ceramics in Eastern Europe.
According to Marton Pap, a Hungary-based sales manager
of ceramic kiln furniture for French industrial minerals
group, Imerys SA, the expansion of the Swedish homeware store,
IKEA, into Eastern Europe can create strong demand hubs. "If a
new IKEA opens up, then this can support whole new ceramics
manufacturing operations nearby," he said.
As well as increasing the purity and variety of products on
offer, companies are also investing in new production processes
– a trend that is benefitting equipment and technology
suppliers, which are otherwise struggling with the general
downturn in manufacturing volumes.
"Customers are looking for more automation, precision, speed
and accuracy in their manufacturing processes," one R&D
expert at a German technology business told
IM. "If you can show people the technology you
have, what went into designing it and educate people a little
about why it will help them, then you have a good opportunity
to get your products into that industry."
"This year has been very good for us," Henrik Molleken, head
of marketing for processing technology specialist, Eirich
Eirich, told IM. "People are looking at ways
of energy saving especially," he said, adding that companies
were willing to pay to upgrade their systems because of the
amortisation benefit. "If a technology has paid for itself in
three years and starts to save you money, then it was worth
it," he said.
3D printing is another innovative production process that is
becoming increasingly prevalent in the ceramics industry.
Although Ceramitec 2015 was markedly smaller than the last
event three years ago, industry participants said that this was
to do with consolidation in the ceramic materials sector, as
much as the weaker market conditions.
"We are seeing more mergers and fewer new companies entering
the market," one seasoned industry professional told
IM. "The problem is, the customers are also
getting fewer. So there is more competition from bigger players
with smaller companies trying to match them on prices, but even
less people to sell to."