Global refractory demand is projected to grow at a 3.4 percent annual rate through 2016 to 46.3 million metric tons, an improvement over the 2006-2011 period. Product sales will climb 5.3 percent per year in value terms to $46.5 billion in 2016, not as strong as gains registered in recent years because of a moderation in raw material costs and refractory prices.
There are three main factors that impact the world refractory market total: output levels in major end use markets, the manufacturing methods used in these industries, and the nature of the refractory products utilized. Increases in refractory demand through 2016 will be stimulated by an acceleration in construction and other fixed investment activity as economic conditions continue to improve, leading to stepped up output of steel, aluminum, cement, and other goods made using refractories. A pickup in personal consumption expenditures will also result in higher demand for everything from glass containers to motor vehicles, contributing to growth in refractory sales as industry production levels rise.
Increased use of refractories in chemicals manufacturing, incinerators, and a variety of other small volume markets will also help bolster overall product sales. However, the manufacturing methods utilized in key end use industries will continue to become more efficient, refractory technologies will improve further, and demand for longer lasting, higher end refractories will climb. This will lead to reduced intensity of usage and limit global market advances.
The iron and steel market will continue to dominate refractory sales worldwide, accounting for almost three-fifths of all 2016 product demand in volume terms. Gains will come primarily from a pickup in global steel output. The market for refractories used in nonferrous metals production will climb at about the same pace for similar reasons.
Refractory sales will expand most quickly in developing areas, reflecting an ongoing shift in metals and other heavy industry production to countries with low cost structures. The Asia/Pacific region, in particular, will post the largest tonnage increases, followed by the Africa/Mideast region, Central and South America, and Eastern Europe. China alone will account for 72 percent of all refractory volume gains between 2011 and 2016, due both to additional growth in its huge steel, cement, and other heavy manufacturing industries, and the use of less sophisticated production methods in steelmaking and other important markets than those used in economically advanced nations.
The volume of refractories consumed will also rise in the US, Western Europe, and Japan following an extended period of decline, as economic conditions grow stronger in these areas and output of ferrous metals and other refractory-using products rebounds. Output gains in these areas are more likely to result in higher refractory demand because the manufacturing techniques utilized are already so efficient that it will be much more difficult to reduce refractory consumption on a per unit output basis than in less developed countries. Due to their greater use of more costly, high quality products, the US, Western Europe, and Japan will account for a somewhat larger share of the world refractory market total in dollar terms (19 percent in 2016) than they will in tonnage (14 percent).
This upcoming Freedonia industry study, World Refractories, presents historical demand data (2001, 2006, 2011) plus forecasts for 2016 and 2021 by form, material, and market in six regions and 23 countries. The study also assesses key market environment factors, evaluates company market share and profiles 50 industry competitors worldwide.
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