At the beginning of 2017, the magnesia market was on shaky
ground. Prices slipped lower due to the cancellation of the
export quota system at the end of 2016, leaving some to be
openly bearish about the year ahead.
This sentiment did not last long, however. As the year
marched on it became apparent that the environmental
legislation which was announced in 2016 was going to be more
far reaching and stricter than previously thought.
China is the world’s biggest magnesia producer
and production is focused in Liaoning province.
China’s main magnesia-producing region is
currently split between two places – Dashiqiao in
Yingkou, and Haicheng in Anshan.
Dashiqiao has less magnesite resources but more
processing companies, while Haicheng has larger magnesite
resources and primary processing companies.
Inspections started in Liaoning province, Anshan city, in
January. A total of 64 local companies were covered and four
inspection teams from the Anshan municipal government announced
a number of irregularities found at Youyan Wanyou Mining
Company, Shuangli Mining Company and Wanning Mining
The officials said similar issues related to environmental
practices and pollution levels were found in several other
companies that were inspected, leading to fines being issued on
site and operations being immediately shut.
Haicheng city, under the municipal management of Anshan,
completed inspections of all local magnesia companies,
according to Anshan Bureau of Environmental Protection. There
are 95 companies operating 1,700 magnesia kilns in Haicheng. Of
these, 142 kilns were shut in January.
Then, in March, the Haicheng government announced that
production would stop at all major magnesia companies, because
their environmental objectives had not been met on time and
they were now operating without permission, greatly damaging
The ban affected 527 kilns in 34 companies —
including 383 caustic calcined magnesia (CCM) kilns, 42 dead
burned magnesia (DBM) kilns, seven fused magnesia (FM) kilns,
52 middle-class magnesia kilns, 37 high-purity magnesia kilns
and six tunnel kilns.
In a double blow, and adding to the problems resulting from
the environmental inspections, Haicheng was also reportedly
considering restrictions on magnesite mining activities,
contacts in Haicheng told Industrial Minerals in March.
Producers were understood to be facing restrictions on selling
material outside their local area – even to nearby
By May, almost all magnesia producers in Haicheng and
Dashiqiao were shut amid ongoing environmental controls; and
while European magnesia prices were stable market participants
are wary of impact to the market should the situation in China
As expected, magnesite mining was also severely restricted
because no dynamite was being sold.
Fused magnesia (FM) was, by May, no longer available in
In Deyang, three refractories manufacturers based in the
city carried out an upgrading process of local operations to
comply with the stricter environmental norms.
One refractory company was forced to shut down while 12
others were asked to rectify their operations in Deyang city
in China’s Sichuan Province.
Elsewhere in the world
Brazil and the European Commission meanwhile approved the
proposed acquisition of Brazilian refractory maker Magnesita
Refratários by Austria’s RHI, but on
condition that the latter divest its dolomite business, the
authority said in June (See pp31-32).
In Europe, prices of European fused magnesia (FM) surged to
exceed the $1,000 per tonne mark in June, following repeated
upticks in Chinese prices and extremely tight availability of
material reflecting on international demand flows.
While the European magnesia market as a whole somehow
managed to stave off the rapid price uptrend that was seen in
China since the second quarter, the widespread shortage of
fused magnesia has now taken the price of the commodity up by
over 50% against earlier levels.
By September and at the UNITECR conference held in Santiago,
Chile, delegates heard that the supply tightness affecting
magnesia markets is expected to persist for the foreseeable
Sources were adamant the issues of supply shortage and price
volatility that have been seen in China over 2017 will continue
to bite, they told Industrial Minerals at the event.
Customs officials at Huangpu Port in southern China
announced the discovery of a magnesia smuggling case involving
some 15,000 tonnes of material at the start of the year.
It is alleged that the material was smuggled through Huangpu
port and Nansha port in Guangzhou, and Shanghai port, between
June 2014 and October 2016.
The magnesia cargo was being exported under other product
labels, including calcium carbonate, barite and flatting
agent. In this way, the sellers bypassed the required export
certificate for magnesia products, keeping prices lower than
they would otherwise be.
R&D in Yingkou
Yingkou’s municipal government, in
China’s Liaoning province, announced a
wide-ranging plan to promote supplier-side structural reforms
for seven local industries including magnesia, aiming to cut
overcapacity, pollution and to foster R&D in new
Yingkou plans to boost the new materials sector for magnesia
with the aim of developing new refractory products based on
To deal with the overcapacity problem, Yingkou plans to
speed up the process of closing backward capacities that have
high pollution and high energy consumption levels.
Additionally, the city wants to impose output control on all
magnesium production. As such, the annual mining volume of
magnesite will be limited to 5 million tonnes.
The number of magnesite companies will be consolidated to 20
in 2017 and further reduced to 17 by 2020. The proportion of
non-refractory use of magnesium products in China is expected
to increase to over 20% by 2020.
New capacity will be strictly controlled, especially for
steel, cement, flat glass and electrolytic aluminium.
As regards pollution controls, an online monitoring system
will be installed to assess pollution levels and energy
consumption of the local magnesia industry.
By 2020, the target is to reach a 60% recycling rate of
industrial solid waste.