US demand for refractories is forecast to increase 3.3 percent per year through 2019 to $3.1 billion. This will represent a deceleration from robust 2009-2014 gains, as crude steel production in the US slows. Sales will also be limited by moderating output in a number of other durable goods manufacturing industries, many of which utilize refractories to at least some extent. Furthermore, a shift in demand toward better performing refractories, while providing an initial boost to sales based on their premium prices, will cause market growth to slow in the long run as replacement cycles are extended. However, continued increases in the price of raw refractory materials will support value gains. Additionally, the nonmetallic minerals market, which is expected to grow the fastest, utilizes some of the highest cost refractories, boosting overall dollar growth.
When measured in volume terms, demand increases will be much more sluggish, averaging under one percent per year through 2019, when sales will total 2.3 million tons. Improvements in refractory designs have enabled end users to utilize less weight per ton of output, adversely affecting demand. Among specific markets, nonmetallic minerals will record the fastest demand advances through 2019, supported by an acceleration in shipments of cement and mineral, and ceramic products. Overall refractory market advances will be limited by the modest increases in iron and steel production in the US. The health of the iron and steel industry, which comprises the largest share of refractory demand by volume, has a major impact on overall refractory demand.
Growth opportunities for suppliers of nonclay refractories will be greater than those for clay refractories in dollar terms. Nonclay refractories typically present a number of performance advantages that boost their usage in more demanding applications, and nonclay refractory prices will rise faster than those for clay products, boosting value gains. However, the lower cost of clay refractories ensures their continued usage, especially when the performance advantages of nonclay refractories are not required.
Although the US has a small trade surplus in refractories in dollar terms, the country is both a large importer and exporter of refractories. The US typically imports lower cost commodity type products, while exporting higher value, advanced refractories. As a result, the nation is a small net importer of refractories in volume terms; the US had a trade deficit of 22,000 tons in 2014, equivalent to one percent of domestic demand. Shipments of refractories are expected to rise 2.7 percent yearly in value terms to $3.1 billion, while in volume terms shipments will grow less than one percent per year to 2.3 million tons in 2019. As is the case with demand, domestic production gains will be limited by the modest gains expected for iron and steel production in the US. Domestic producers of refractories will continue to see competition from low cost sources of supply, notably China and Mexico. Despite this, the technological advantage that US refractory producers have will continue to pose opportunities for growth, as the global trend toward usage of better performing refractories will favor output by US manufacturers.
This Freedonia industry study, Refractories, presents historical demand data (2004, 2009 and 2014) plus forecasts (2019 and 2024) by refractory form, material and market. The study also considers market environment factors, assesses the industry structure, evaluates company market share and profiles 25 competitors in the US industry.
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