Volume growth in refractories production in India was in
positive figures for the first time in three years in the
financial year ending March 31, 2019, with output rising to 1.2
million tonnes, a 9% increase on the previous year, making it
one of the sector’s strongest years on record.
The data showed a welcome rebound for an industry that had
been struggling against tough foreign competition and wider
Buoyed by the turnaround, major domestic and international
refractory producers operating in the country were optimistic
about demand growth in the years ahead, led by an expected
expansion in steelmaking and other refractory-consuming
Dipankar Banerjee, marketing and technology director at
Vesuvius India, said that although India has seen growth in
non-ferrous, non-metallic and niche applications for
refractories over the past decade, ferrous metal production
continued to underpin India’s consumption of
"The iron and steel industry is our biggest market in India,
but a few years ago we made a move into the
country’s cement sector," he said, adding that the
company was "trying to enhance our presence in these markets,
with a specific focus on new and state-of-the-art
Market participants reported improvements in capacity
utilization last year, albeit only by a few percentage points,
which helped to raise profitability after several years of
flat-to-weak utilization rates, which dragged margins down.
India’s refractory industry is served by around
a dozen large-scale, 30 medium-sized and about 200 small-scale
producers, so it continues to be crowded and competitive.
Despite India’s large and generally healthy
steel market, which is the main consumer of refractories, the
pricing power of Indian refractory producers is limited by the
industry’s fragmented structure.
This is compounded by surplus capacity and competition from
imported refractories, which offer an easy and often
cost-effective option for many refractory consumers, due partly
to the low import duties imposed by India’s
Refractories manufacturers also complain of persistent
problems with the availability of domestic raw materials, with
relatively few refractory minerals produced in significant
volumes in India.
This is one factor which, if it were addressed, many in the
industry believe could revolutionize India’s
|Major construction and infrastructure modernization
is driving steel and cement demand in India.
Ninara, via Flickr
A revival in Indian steel production was the main driver of
stronger refractories consumption in the country in 2018.
India replaced Japan as the world’s
second-largest steel producer in 2018, registering crude steel
output of 106.5 million tonnes, up by nearly 5% from the 101.5
million tonnes it produced in 2017, data from the World Steel
Association (Worldsteel) showed.
In contrast, Japan produced 104.3 million tonnes in 2018,
down by 0.3% from the year before.
After steel, India’s second-largest consumer of
refractories is the cement sector, and it also grew strongly
last year, by almost 70%, to 502 million tonnes in 2018-19 from
297.6 million tonnes in 2017-18. This new volume ranked India
as the second-largest cement producer globally after China,
with capacity expected to hit 550 million tonnes per year in
Competition from imports
India’s refractories imports in 2017-18 jumped
by 40% to 25.3 billion rupees ($351 million*) from 18 billion
rupees the year before.
Hakim Uddin Ali, a former chairman of Indian Refractory
Makers Association (IRMA), said that the lack of domestic raw
materials for Indian refractories companies was one of the main
reasons for rising import volumes.
"Domestic refractory producers have to import raw
materials," he said. "Even finished refractory products are
being imported because, at times, importing is cheaper than
manufacturing in India."
Indian refractory producers were highly dependent on imports
of key raw materials such as high-grade alumina, bauxite,
magnesite and silicon carbide, with the majority coming from
Kamal Sarda is chief executive officer of Kolkata-based IFGL
Refractories, which has manufacturing facilities in Odisha
state and various locations globally, including the UK, China,
the United States and Germany. He said that his company imports
close to 40% of its raw material needs from China.
"Raw material availability is not currently a challenge, but
price fluctuations can be," he said. "Prices have more or less
stabilized, bar a couple of raw materials which have gone up
and a few which have come down, so things are more or l
|Ambivalence towards the development of domestic
in India is regarded by some as a barrier to industrial
Environmental Change and Security, via Flickr
New market entrants
Responding to the gap in India’s refractory raw
materials supply chain, some companies have moved in to
capitalize on the opportunity.
In 2018, Germany’s Almatis, a world leader in
alumina-based products, started constructing a new tabular
alumina facility in Falta, West Bengal, to serve the Indian
The company is betting on rising demand for tabular alumina
in India because companies are increasingly opting for
longer-life products, which use premium alumina.
Even more companies have moved in to take advantage of
downstream opportunities, and the past two years have witnessed
the largest ever expansion in Indian refractories capacity.
In May 2019, Dalmia Seven, a joint venture between the
Dalmia Bharat Group and Slovenia-based Seven Refractories,
began commercial production on a monolithics production line at
its facility in Madhya Pradesh.
According to Dalmia Seven, the plant is the first of its
kind in India, with a high level of automation, which enables
precision dosing of raw materials for efficient high-grade
The plant takes Dalmia Seven’s refractories
capacity in India to 45,000 tpy, making it a significant local
Sameer Nagpal, CEO of Dalmia Bharat’s
refractory business, said that investing in state-of-the-art
technology was an important statement for the company while it
seeks to capture an increasing share of India’s
"Our approach addresses the increasing demand for clean
steel production in India," he said, pointing to government
aspirations to reduce emissions from Indian industry, while
simultaneously ramping up infrastructure development.
In January 2019, Dalmia Bharat Group acquired the refractory
business of Germany’s GSB Group, a speciality
refractory manufacturer, for €15 million ($16.7
Mark Runge, managing director of GSB, said that becoming
part of an Indian company would enable it to bring German
production standards to a receptive and growing market.
"We built the GSB Group with a vision to service its
customers with world-class efficiencies and best-in-class
talent. I am confident that, with the experience and legacy of
Dalmia, we can take this vision to the next level," he
Local companies were also investing in organic capacity
IFGL was in the process of setting up a new greenfield
manufacturing facility in Visakhapatnam in the eastern coastal
state of Andhra Pradesh, and expanding a manufacturing facility
at the Kandla Special Economic Zone in the northwestern state
Another major local market participant, Orient Refractories,
expanded its installed capacity of isostatic pressed products
at its facility in Bhiwadi, Rajasthan, by 2,400 tpy last year,
to 11,700 tpy.
|Indian steel companies are investing in capacity
but have had problems with low utilization rates
Ken, via Flickr
Growing EAF capacity
India’s steel industry consumes around 75% of
the country’s domestic refractories output
– 10% higher than the global average, illustrating the
dominance of steel as a market for Indian refractories
In the past five years, India has surpassed other large
steelmaking countries such as the US, Russia and South Korea in
terms of capacity and output. This growth has been partly
facilitated by the expanding use of scrap-fed electric-arc
furnaces (EAFs) in place of traditional basic oxygen furnaces
(BOFs) which produce steel from iron ore and coking coal and
other raw mineral inputs.
Around 60% of India’s installed steelmaking
capacity is electrical – meaning, EAF- or induction
furnace (IF)-based, although output from these mills only makes
up around 35-40% of the country’s total steel
production due to utilization problems and shortages of scrap
Globally, EAFs account for around 25% steel output and
induction furnaces about 28%, according to Worldsteel
India overtook South Korea as the world’s
second-largest ferrous scrap importer in the first half of
2019, trade data showed, placing the country behind Turkey, the
world’s leading scrap consumer and EAF
Indian scrap imports surged by 35% on-year to 3.9 million
tonnes between January and the end of June 2019, sourced mainly
from the UAE, the UK and the US, while the
country’s crude steel production for the period
rose by 5% to 56.96 million tonnes, Worldsteel data showed.
Indian steel output was expected to increase by 7.1%
year-on-year in 2019 and by a similar amount next year,
supported by higher government spending on infrastructure,
robust manufacturing and rapid urbanization.
The country’s National Steel Policy, published
in May 2017, has a target for domestic installed steel capacity
of 300 million tpy by 2030, with EAF capacity expected to make
up the majority of this, although the exact proportion was
EAFs are favored by the Indian government because they are
cheaper to build and considered to be more efficient and less
polluting than BOFs, although some still favor the quality of
steel which can be produced using traditional methods as
opposed to recycling scrap.
In June this year, India published its draft Steel Scrap
Policy intended to promote scrap processing, to supply the
projected shift toward EAF- and IF-based steelmaking, amid
predictions of a widening shortage of domestic scrap
|India’s railways industry is one of the
consumers of steel.
Navaneeth Kishor, via Flickr
Effect on refractories
The drive toward increased EAF capacity has implications for
India’s refractories industry.
According to Anirbandip Dasgupta, executive secretary at
IRMA, the increase in EAF numbers will not significantly alter
overall demand for refractories in the Indian steel industry,
but the nature of the products required will change.
"The refractory needs for EAFs are slightly different from
blast furnaces, but the overall the dynamics of the market
should not change significantly," he said.
RK Pradhan, senior manager at the refractory unit (IFICO) of
Indian state-run steel producer Steel Authority of India Ltd
(Sail), believes that increased EAF capacity will drive greater
consumption of refractory products.
"Both refractory production and consumption in India will
see a further boost, as a result of these smaller units," he
IFICO is one of Sail’s four integrated
refractory-producing units. Located at Ramgarh, in the state of
Jharkhand, IFICO has an installed capacity of 42,000 tpy,
producing alumino-silicate refractories and various other
"EAF utilization in India’s steel industry is
expected to rise to nearly 40% by 2030," Arjun Jain, executive
director of the Delhi-based Steel Furnace Industry Association
of India, said.
"This will probably result in higher overall consumption of
refractories by the domestic steel industry. Consumption of
high value-added products in EAFs is far higher compared with
conventional BOF-route steel production," he added.
Jain said that changes in refractory demand would be driven
more by the kind of steel Indian consumers want to use, rather
than the methods employed to produce it.
The increasing preference for high-grade steels was
generating more demand for better-quality refractory products,
although this was being balanced to an extent by more efficient
furnace designs which require fewer refractories for a given
volume of steel.
"Total average consumption of refractories, in furnaces and
secondary metallurgy vessels, depends significantly on the type
of steel produced. Our experience is that, for carbon steels,
approximately 12kg of refractory is needed for per tonne of
steel produced," Jain said.
"For high-grade steels, such as alloyed and stainless
steels, refractory consumption is in the range of 22-32kg per
tonne. Average refractory consumption in the furnace itself
amounts to 8kg per tonne of this," he added.
According to Sudipta Patra, senior executive with Jindal
Stainless, a unit of India-based multinational Jindal Steel
& Power, the development and use of high-performance EAFs
in India will force shifts in the composition of refractory
products required by steelmakers.
"There is a high degree of correlation between EAF life and
the life of the furnace roof," Patra says. "With the rapid
expansion of EAF steelmaking in India, larger capacities and
the increase of unit power, the working conditions of the
furnace roof become more demanding, which has resulted in a
drastic change in the kinds of refractories used in EAFs."
Patra explained that the roofs of EAFs typically use
high-alumina bricks with aluminium oxide (Al2O3) content
ranging between 75% and 85%.
"Compared with silica refractory bricks, alumina bricks have
high refractoriness, better slag resistance, thermal shock
resistance and high compressive strength. Also, the life of
high-alumina bricks is two to three times that of silica
bricks," he added.
Given the lack of domestically produced refractory minerals
supply in India, industry observers warned that this shift in
demand was likely to drive an even greater reliance on imports,
particularly for high-grade alumina from China, unless
India’s government decided to link its steel
policy to a more focused raw materials policy over the next
In March this year, the Indian government published its
updated National Mineral Policy, pledging greater support for
exploration and development of domestic mineral resources with
the aim of reducing the need for imports, while at the same
time proposing stricter regulation of India’s
"Minerals are a major resource for the core sectors of the
economy. There is a huge demand for minerals in view of the
rapid urbanization and the projected growth in the
manufacturing sector," the policy stated.
"With the thrust on the Make in India initiative, the demand
for minerals is likely to grow at a rapid pace. Extraction and
management of minerals has to be guided by long-term national
goals and perspectives, and integrated into the overall
strategy of the country’s economic development,"
Some have expressed dismay about the general terms of the
policy, and particularly its failure to highlight plans for
specific mineral segments.
None of the core refractory minerals, such as alumina,
magnesite or clays, were mentioned specifically, raising doubts
that mining for these products will be made a priority in the
*Conversions made August 2019
India’s cement industry
Cement production is the second-largest consumer of
refractories in India after steel, and the market is growing
A total of 210 large cement plants (77 of which are located
in the states of Andhra Pradesh, Rajasthan and Tamil Nadu)
together account for 410 million tonnes per year of installed
capacity in the country, while 350 mini cement plants make up
Cement production in India increased from 230.49 million
tonnes in 2011-12 to 297.56 million tonnes in 2017-18.
India’s leading refractories
TRL Krosaki Refractories
A subsidiary of Japan’s Krosaki Harima Corp
(KHC), TRL Krosaki is the largest refractories producer in
It was established as Tata Refractories in 1958 as a joint
venture between India’s largest steel producer,
Tata Steel, and Germany’s Didier Werke, but the
German partner exited in the 1960s.
In May 2011, Tata sold two-thirds (51%) of its majority
stake in the company to KHC, followed by its remaining 27%
share in 2018, giving KHC control of the business in India to
add to its existing refractories operation in China, which
mainly produces magnesite bricks.
TRL Krosaki has five manufacturing plants in India, at
Belpahar (Orissa), Salem (Tamil Nadu), Jamshedpur (Jharkhand),
Maya Pradesh and a site in Gujarat. Total installed capacity at
the five plants is nearly 400,000 tonnes per year.
Besides producing refractory products for the steel, copper,
cement, aluminium, glass, petrochemicals and other non-ferrous
industries, TRL Krosaki offers refractory management and
engineering services, is one of the largest manufacturers of
dolomite refractories in the world, and is the leading global
supplier of silica refractories for coke ovens and glass
Established as Orient Abrasives in 1974, in 2010 this
company underwent a demerger to spin out its refractories
division into a separate business as Orient Refractories.
The leading global refractories manufacturer,
Austria’s RHI, holds a 69.6% stake in Orient
Orient’s manufacturing facility is located in
Bhiwadi, south of Delhi, in Rajasthan, and is divided into
three independent sub-divisions – one each for the
production of slide gate plates, continuous casting
refractories, and castables and pre-cast shapes.
The company has installed monthly capacity to produce 70,000
pieces of slide gate plate, 30,000 pieces of continuous casting
refractories, and more than 2,000 tonnes of castables and
mortars. It also has an allied plant in Salem, Tamil Nadu,
which produces monolithics.
A subsidiary of UK-based Vesuvius plc, Vesuvius India
currently operates four production facilities: at Kolkata in
West Bengal, producing continuous casting refractories; Mehsana
in Gujarat, making crucibles for the non-ferrous industry; and
two at Visakhapatnam in Andhra Pradesh producing monolithics,
along with a monolithics assembly facility at Salem.
The company is also contemplating further expansion in India
to serve the country’s growing needs, and is
evaluating the feasibility of a new manufacturing unit at