LONDON, September 18, 2013 /PRNewswire/ --
World magnesia trade and consumption patterns are heading into new territory. The Chinese magnesia market is on the cusp of maturity as government policies shape the future of the industry. Chinese magnesite and magnesia producers - by far the largest in the world - are under government orders to phase out old and inefficient production technologies, undertake mergers and acquisitions, and improve resource management.
These changes are occurring against a backdrop of renewed magnesia investment in the rest of the world. New projects and capacity expansions in countries such as Brazil (Magnesita Refratários), Norway (RHI AG), Russia (Magnezit Group) and Turkey (RHI, Kümaş and others) have been encouraged by tightening export supplies and higher prices from China, which also leads world magnesia trade. Companies in the rest of the world have outlined plans to develop 1.8Mtpy of additional magnesia capacity between 2011 and 2015. As much as 500,000tpy of this has already come online.
The new Roskill report analyses the likely effects of these new capacities on global magnesia supply and demand, providing forecasts to 2018 for each region by main market. Roskill believes these capacity expansions will be able to meet forecast demand, although supply/demand scenarios will differ depending on grade.
Steady growth from traditional magnesia applications
Consumption of caustic calcined magnesia (CCM) is mainly driven by the industrial sector in its role in water, waste and flue gas treatment chemicals. CCM is an important additive in animal feed and is also experiencing strong demand in Asian palm oil cultivation. High-value speciality CCM is expected to benefit from its use in hydrometallurgy, a metal extraction method that is gaining popularity in nickel/cobalt operations. CCM and magnesium hydroxide will also see strong growth in the flame retardant market as an additive in plastics.
Consumption of dead burned (DBM) and fused magnesia (FM), which constitutes more than 70% of the total magnesia market, is almost exclusively in the production of refractories. Refractories are used in a diverse range of industries, but their consumption is dominated by iron and crude steel (73%) and cement and lime (13%). Roskill forecasts world crude steel output will grow by 3.5%py between 2012 and 2020, consequently driving demand for refractories and refractory magnesia.
Integrated refractories producers are responsible for many of the magnesia capacity expansions that are underway or completed. A key concern for these producers is stability of supply to meet forecast demand; for many consumers, this means independence from Chinese magnesia exports.
Magnesium chemicals boosted by agriculture, de-icing uses
Magnesium chemicals constitute a smaller sector than magnesia but have several key markets in dust control, de-icing, agriculture, oil drilling and as a feedstock for a host of other downstream magnesium-containing products.
Magnesium chloride will see stable growth in developed markets such as Europe and North America in de-icing and oil drilling applications. Magnesium chloride could also see additional demand from magnesium metal operations, where it can be used as feedstock. Fertiliser uses are the main driver of magnesium sulphate consumption and will see high growth in demand, notably from China and India.
Outlook positive but risks of price volatility
Roskill forecasts the total magnesia market will grow by 3.2%py to 2018; the highest growth is expected to be in the CCM sector at 3.6%py while the lowest is forecast to be FM at 2.6%py. Refractories will continue to be the single largest consumer of magnesia.
As additional magnesia capacity is installed in the rest of the world, export dependence on China is expected to decrease. Chinese magnesium is subject to various export controls including a restrictive quota; thus changes in Chinese policy may affect magnesia supply and prices, independent of market conditions. As a base case, CCM prices in 2013 are expected to be stable while refractory magnesia (DBM/FM) prices will dip slightly. Prices for all grades are forecast to grow slightly in 2014 before returning to historical growth rates in 2015.
Magnesium Compounds and Chemicals: Global Industry & Markets 2013 is available, until the 30th September, at an introductory price of £3,230 / US$5,185 / €4,080 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44-20-8417-0087. Fax +44-20-8417-1308. Email: firstname.lastname@example.org. Web: http://www.roskill.com/magnesium-compounds
Note to editors
Roskill Information Services Ltd. of London, UK is a leading provider of multi-client and bespoke market research services to the minerals and metals industry.
The new Magnesium Compounds and Chemicals report contains 498 pages, 310 tables and 102 figures plus an appendix of international trade statistics. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.
For further information on this report, please contact Alison Saxby, email@example.com or +44-20-8417-0087.
SOURCE Roskill Information Services