Growing stronger: vermiculite and perlite

By IM Staff
Published: Tuesday, 09 July 2019

Driven by demand from multiple sectors - from construction and horticulture to fire protection and steelmaking - the global vermiculite and perlite market remains in growth mode, underscored by a healthy supply-demand balance, reports Ross Davies.

Vermiculite is a versatile industrial mineral, whose range of applications covers everything from car brake linings to roof-insulating concretes and a wide range of agricultural products.

It is this diversity of end-user applications, says long-time vermiculite consultant Andrew Baylay, that continues to stand the industry in good stead.

"Vermiculite holds its position well in its global market sectors," he says. "It has so much to offer; the industry’s in a good place."

Baylay is a member of The Vermiculite Association (TVA) - a US-based, non-profit, trade association promoting the vermiculite industry - which held its latest annual meeting at the end of May in Edinburgh.

The spirit of the event in the Scottish capital was one of optimism, confirms Michelle Keyser, a TVA spokeswoman, who describes the current state of the global vermiculite market as "balanced", based on a sound equilibrium between supply and demand.

"The mines are attending to the present demand," says Keyser.

"Some analysts will tell you that, overall, the industry is shrinking in [terms of] actual tonnages produced and sold," adds Baylay. "However, while volumes have remained in steady demand in recent years, more niche, and higher-value [uses] have been added to the more traditional bulk applications."

Verm1  
The US steel industry is consuming more vermiculite as operations
grow and revitalize, according to Michael Dunlavey, PVP Industries.
iStock 

Horticulture

One such high-value area is horticulture, especially the subset of hydroponics – in which plants grow using mineral nutrient solutions, as opposed to soil. Due to its ability to retain water and moisture, vermiculite is able to maintain a hydrated environment while preserving plant nutrient levels. 

According to recent estimates, the overall 'grow-light’ market is projected to expand at a compound annual growth rate of 11.68% by 2022, as green-fingered consumers with limited space aim to grow their own plants without the need for a garden. And hydroponics is particularly popular in cities where space is at a premium.

The growing trend for 'green’ roofing among today’s more environmentally-friendly consumers is also to vermiculite’s advantage, says John Rose, manager of lightweight roof insulation systems at Siplast, who outlined why at a seminar on the subject at the May TVA summit. 

"Green roofing and the incorporation of vegetative systems - both extensive and intensive - into building designs is increasing," Rose says. "Vermiculite-based products beyond just soil-growing mediums are being used in these green roof systems."

That said, the horticultural market is not the sole preserve of vermiculite - or perlite, for that matter - with competition coming from other aggregate minerals. 

"More could be done within the horticulture system," Baylay says.

Verm2  
Dark clouds on the horizon? Perlite is shown stockpiled here, but the
Perlite Institute believes that there is growth potential.
iStock 

Construction

However, according to Ned Gumble, president of Virginia Vermiculite in the United States, the use of vermiculite in construction products trumps its use in horticulture. 

As a result of its slight bulk density, exfoliated vermiculite is well suited to the manufacture of lightweight concretes and plasterboards. Such concretes can be applied to roof and floor screeds, as well as in the fabrication of precast products. 

Michael Dunlavey, vice-president of sales for Ohio, US-based group PVP (Perlite Vermiculite Packaging) Industries, takes a different view, believing the performance of his country’s steel manufacturing is a key driver for vermiculite supply. According to the World Steel Association (Worldsteel), US crude steel output in 2018 was up 6.2%, year-on-year. 

"We don’t actually see large growth in the construction sector, which has been rather stagnant for some time," he says. "Instead, we are seeing more growth in the steel manufacturing industry [and] steel mills in the US are consuming more and more vermiculite as their operations expand and revitalize," Dunlavey says.

"There are also other industrial applications growing to a smaller degree for higher-value, higher grades of vermiculite, particularly for environmental and speciality applications – although with the US-imposed tariffs on Chinese imports [imposed by president Trump last March], there is some uncertainty on the cost-value ratio for these products.

"This could and should give other countries a window of opportunity to supply higher grades of ore to a [wider] market base," he says.

"Overall, we see growth potential for vermiculite as fair-to-positive over the coming years, so we are looking to diversify our raw material supply."

The main regions of consumption for vermiculite are North America, Asia Pacific and Europe. TVA was asked whether 'Brexit’ - the United Kingdom’s potential exit from the European Union - has had an impact on European consumption levels, but chose not to comment. 

"Our understanding is that there is positive growth in the European and Asian markets, which is helping US-based innovation, too," says Dunlavey. "Here in North America, vermiculite is sometimes, wrongly, viewed upon as old news, but with technology and the ability to share innovations worldwide, people and companies are experimenting regularly."

Verm3  
The rapid urbanization in Asia has meant a growth trajectory for perlite.
iStock 

Fireproofing

TVA also lists the introduction of more stringent fireproofing regulations in several parts of the world as another key driver for the mineral, whose low density and strong insulation properties make its ideal in the production of gypsum wallboards. 

"Fireproofing and manufactured building materials for fire resistance have vast potential that could be [further] explored and utilized," says Baylay. 

In recent years, both miners and ore purchasers have ramped up their efforts to always consumer concerns over vermiculite’s asbestos content (a quick Google search indicates the general misconception that vermiculite and asbestos are from the same silicate mineral). 

Consequently, in 2017, TVA launched a best practices program for asbestos detection and control protocol for vermiculite mining and milling. According to Keyser, the program has a gone some way to allaying end-user fears.

"The program specifically looks at quality control systems; management and technical training; asbestos control procedures; analytical test procedures; microscope set-up; and pre-shipment quality assurance," explains Keyser. 

"These protocols help miners establish credibility with vermiculite ore purchasers. Ultimately, end users of vermiculite can be confident that the ore purchased from mines, following TVA’s best practices protocol, has been properly processed and tested," he adds.

Baylay agrees that it is up to the miners to demonstrate their credentials.

"It is beholden of miners that they raise their quality game to meet new market demands. End users have become more discerning regarding the qualities, types and sources of vermiculite," he says.

"Technical developments and higher end-user specifications - often driven by new legislation – will… hasten the demand for higher-specification ores."

The global vermiculite industry is forecast to grow in the coming years, but it has not all been plain sailing. While broadly optimistic about "an exciting future", Baylay really wants to see "greater market awareness".

Verm4  
The booming medical marijuana market has also provided a growth
opportunity for perlite.
iStock 

Supply headwinds

According to Dunlavey, North America - which holds a large regional share of vermiculite consumption - has also been hit by minor supply chain interruptions of late. 

Transportation has been "an issue", he says, because of changes to the US National Motor Freight Classification system - the standard that provides a comparison of commodities moving in commerce - as well as a hike in fuel taxes in certain US states. Lawmakers in Dunlavey’s home state of Ohio, for instance, recently approved a 147% increase in the diesel fuel levy, which increased from 19 cents to 47 cents per gallon. 

Dunlavey believes that such developments have had a bigger impact on prices than any increases in manufacturing and raw materials costs.

"It’s been nothing in the sense of not being able to fulfil orders, but I would say that extended lead times and increased costs are imminent," he says. "With the overall cost of vermiculite being higher than some of its competitive products already, any increased costs could undermine the growth potential.

"We will stay positive and continue to market these products, holding our prices until the effects of transportation and duties exceed their value at current market rates."

Perlite calling 

As for perlite, according to a report by research provider MarketsandMarkets, its global market size is expected to hit $2.20 billion by 2022 and growth will be mainly driven by the construction sector, due to increasing rates of urbanization and industrialization – particularly in the Asia Pacific region. 

"Asia Pacific contributes a major market share in the global perlite market," the report says.

"Due to the increasing industrialization as well as the large population in China, Japan, and India, these countries are experiencing high demand for building and construction. The rapid urbanization in these countries demands faster and cheaper construction of buildings and facilities without compromising on quality. 

"Additionally, the increasing government investments in infrastructural constructions provide the potential for the growth of the perlite market in these countries."

Dunlavey also cites an increase in the number of new discoveries for ore sources, as well greater momentum in research & development, as evidence of a market in rude health. 

This bullishness comes in spite of recent fluctuations in the commercial horticultural market, in which perlite - similar to vermiculite - is commonly found. 

"Traditionally, stateside perlite, manufactured by some of the smaller US companies primarily went into the horticultural market," Dunlavey says. "But, with competitive products establishing a hold on some of this market share, there has been less volume going in."

Instead, Dunlavey - who also sits on the board of directors of the Perlite Institute - believes more potential can be found in the construction industry, in which perlite is widely used due to its high insulating properties. 

Perlite is also castable, making it ideal for use in high-temperature applications in steel and foundry industries. 

"There are more opportunities in the construction, environmental and industrial sectors - in which, coincidentally, many of us involved in the perlite industry started out," says Dunlavey. 

"It’s a case of history repeating itself. With more regional sources of the raw material, compared to vermiculite, perlite can compete better in all of the markets, with no issues of supply and demand in sight."

North America’s burgeoning legalized cannabis industry is also playing into the hands of perlite players. 

As boutique investment banking firm Northland Capital Partners said in a research note from last November: "The perlite market in North America continues to be strong as industrial-scale cannabis growers build-out major new capacity following Canadian legalization and the relaxation of legislation within a growing number of US states."

Earlier this year, Sunrise Resources, a UK-based company operating out of the US state of Nevada, revealed it had been given the green light by the US Bureau of Land Management to expand its exploration of the mineral in the state. 

The new permits allow Sunrise to drill up to eight holes, as well as bulk sampling of up to 1,000 tonnes, for the project, known as NewPerl. 

"Based on these future projections for perlite, manufacturers are building new facilities and updating their equipment and technology," says Dunlavey. 

"At PVP we even recently replaced our vintage 1984 furnace with a new Incon. For a small company like us, that’s a really big deal. There’s a new generation of manufacturers who are actively involved from production to operations. It has its challenges, but this is an exciting time."

Turkey’s Bergama Mining Perlite, another of the industry’s main players, is also believed to be lining up new investments. Two new production plants, "equipped with the latest technologies" are scheduled to open in Izmir and Aliağa on the country’s Aegean coast, the company says.
However, Bergama alludes to no timeline as to when the facilities are expected to open. 

The group could not be reached for further comment.

Others are less equivocal. In April, EP Minerals, a US-based group that produces perlite for filtration, announced a price increase across its minerals range to offset "inflationary pressure with the raise in costs related to ore, packaging, labour and energy". 

The perlite increase was part of "our standard yearly increase," spokeswoman Julie Brown told Industrial Minerals. "It’s nothing out of the ordinary, although I would say perlite trends are staying flat for us at this current time. Growth markets are in our other minerals, such as clays and diatomaceous earth."