The past year brought increased prices across the range of
raw materials, triggered by increased costs for logistics and
production while the global economy was recovering from the
By early 2021, global magnesia prices had been under
sustained pressure from oversupply and heavy stock
accumulation, which have weighed on prices since 2018, with
falling demand in 2019 and 2020 extending the
Later through the year, inventory stocks depleted.
From the summer of 2021, the market slipped into tightness.
Fastmarkets’ price assessment for magnesia, fused,
97% MgO, cif Europe, jumped to $1,200-1,500 per tonne on
The magnesia industry in China went through
environmental checks and consolidation in the first half of
2021, reducing supply. In October, electricity rationing in
major Chinese production hubs such as Liaoning province added
further pressure on the supply.
China accounted for the majority of global magnesia
production and 60% of special magnesia grades (CCM, FM, DBM)
imported to the US in 2015-18, with the trends staying similar
in subsequent years.
Production in China resumed in early November and
brought local prices down. But market participants expect
further closures during the Winter Olympic Games in Beijing in
February 2022, while the Chinese government tries to improve
the ecological situation during the event. Local governments
have instructed China’s magnesia producers to
limit production during the Olympic Games but the scope of
closures is unclear, according to sources.
A European market participant told Fastmarkets that,
across the industry, people are "fed up with
China’s unpredictability." Another European source
said: "It is risky to depend on China 100%."
In 2021, overseas buyers started looking for more
material from magnesia suppliers outside China to guarantee
supply. One trader told about requests for non-Chinese
synthetic magnesia and recycled magnesia bricks. Mostly, these
requests brought increased demands for non-Chinese
"The demand is insane; the market is overheated," a
European producer source said.
Martin Marietta, a US-based construction materials
group, reported 30% increased revenues year-on-year for its
magnesia specialties division in the third quarter of 2021,
"driven by improving domestic steel production and global
demand for magnesia chemicals products."
Kümaş Manyezit, a part of Turkish steel and
refractory material group Kümaş, said that its
pellet, iron and magnesite ore products output reached 1,947
kilotonnes over the first nine months of 2021, a 26% increase
"We see customers coming to us who we have not seen
for 10 years, because they cannot find anything from China," a
European producer source told Fastmarkets in October, calling
the situation "crazy".
Magnezit, a Russian producer, reported increased
production capacity for magnesia fireproof materials in
December 2021. A source familiar with Magnezit production said
that they were seeing demand exceed pre-pandemic levels by
"It was a good year for us," another European
production source said, adding that by August their production
was sold out for the rest of the year, and in December they
were fully booked for the first half of 2022. But the benefits
were offset by fuel costs, including gas prices, the source
Natural gas and oil prices showed rises throughout the
Transportation costs and unpredictability of
deliveries were among the key factors affecting the industry at
the end of 2021, and are likely to continue into the first half
of 2022, three magnesia market participants said.
Since January 2021, the shipping industry has been
facing a lack of containers and available vessels, due to
reduced production during 2020. This resulted in increased
delivery times and shipping costs. "Delivery takes around seven
months instead of three," a European buyer complained at the
end of the year.
In early December, price indicator the Drewry World
Container Index – a composite of 40-foot ocean
container freight rates on eight major routes to/from the
United States, Europe and Asia – remained 196% higher
than a year before. Logistics costs, as well as raw materials
costs, have driven major refractory materials producers to
After the third quarter of 2021, global materials
makers RHI Magnesita, Imerys and Vesuvius announced price
increases for their production. In October, Imerys said it
would pursue the implementation of price increases "ranging
from 5% to 15% - and in a few unique situations, greater than
15%" for its Performance Minerals materials.
A European producer source told Fastmarkets in
December that they had implemented a 15-25% rise for their
production toward the end of the year.
During 2021, supply disruptions, which have hit
commodity markets, were among the "structural" factors that
have prompted the recent Eurozone inflation, the European
Central Bank (ECB) said in October.
In November, inflation in the Eurozone reached 4.9%,
the highest since the euro was introduced, and 6.8% in the
United States, the highest rate since 1991.
A European magnesia buyer said: "2022 is going to be
another interesting year."