This year has brought new challenges to the magnesia market.
Chinese producers had already been going through a series of
production restrictions, while European counterparts tried to
deal with increased costs.
The war between Russia and Ukraine, which removed some
production from the market, has added further pressure. "The
market got tougher," a magnesia producer said, summarizing the
By early 2022, the European market in particular was
struggling with high energy and transportation costs, which had
been especially painful for energy-demanding grades such as
fused and dead-burned magnesia.
The war in Ukraine increased pressure on the market
because materials from Russia and Ukraine became hard to source
and ties between Russian producers and the rest of the world
were broken. After the war began on February 24, sanctions
imposed on Russia by the West have had a significant effect. "I
have been working for 15 years to develop a customer base in
Russia, and now it is all gone," one manager said.
The biggest Russian magnesia company, refractory
materials producer Magnezit, has not faced sanctions, and
exports of magnesia products from Russia have not been banned
at the time of writing. But European buyers have started
avoiding Russian material anyway.
"European refractories that used Russian material are
looking for a replacement, because shipments are difficult,"
another European producer said in late February.
The largest container-shipping companies stopped
delivering cargoes to and from Russia in early March. Logistics
to and from Russia remain problematic.
"There is definitely a tightness," a European producer
source said, whose customers are "buying what they can get" to
avoid production pauses. In his assessment, the situation is
much worse than last year, when logistics had been the only
A European consumer said that he now avoided any
Russian material because of potential reputational risks. "We
are not doing anything with Russian material, and we do not
know who does," this source said, adding that an overall
tightness of supply is continuing. "It is impossible to make
long-term forecasts," he said.
Chinese deliveries slow
Magnesia products from China have remained available
on the global market, despite the logistical
In early 2022, consumers of Chinese material stocked
up, preparing for a pause in production during the Olympic
Games in February. In the first two months of 2022,
China’s exports of fused magnesia reached 121,831
tonnes, up by 25% year-on-year. For the same period, exports of
dead-burned magnesia were 236,907 tonnes, up by 38%
Later, the market felt extra tightness from surging
numbers of Covid-19 cases in China, which caused production
restrictions and challenging logistics. Since mid-March, the
province of Liaoning, the main production hub for magnesia, saw
reduced output, lockdowns and logistics restrictions, which
resulted in shipment delays.
Nevertheless, prices for Chinese material remained
stable or have edged a bit lower since late 2021, driven by
good availability of material, one European consumer said.
Fastmarkets assessed the price of magnesia, fused, 97% MgO,
Ca:Si 2:1, lump, fob China, at $750-850 per tonne on March 22,
unchanged since March 1.
Similarly, Fastmarkets’ assessment of the
spot price for magnesia, dead burned, 90% MgO, lump, fob China,
was $270-300 per tonne on March 29, unchanged since March
Increased recycling rates
It remains to be seen if the supply tightness will
contribute to increased demand for recycled refractory
materials, but the beginning of the year saw a new refractory
recycling joint venture. Refractory material producer RHI
Magnesita announced its partnership with recycling company Horn
& Co to form a new joint venture with recycling facilities
in Germany and Austria.
RHI Magnesita plans to increase the recycling rate to
"more than 10% in 2025," saving 1.8 tonnes of carbon dioxide
for every tonne of recycled material used.
Nearly all used refractory materials formerly went to
landfill, but now most used refractory materials are re-used in
applications such as aggregates for infrastructure
A spokesperson for RHI Magnesita said that from the
supplied new refractories, on average 40% is consumed in the
process, meaning that only around 60% is remaining after
application in products. After that, about half of this
remaining volume is land-filled.
The challenging logistics and increased prices for
virgin raw materials now prevalent encourage further
development and usage of local recycled material sources, RHI