The global zirconium market was estimated at USD 1,820 million in 2020, and it is projected to register a CAGR of over 8% in terms of revenue during the forecast period (2021-2026).
A sharp increase in the COVID-19 cases led to numerous countries resorting to lockdowns, which significantly affected the global economy. The economic and industrial activities came to a temporary halt, which led the zirconium market to witness repercussions in terms of both production and the demand from end-user industries such as iron and steel, cement, energy and chemicals, and ceramics. The World Steel Association predicts a decline of about 6.4% in the global crude steel demand, to 1,654 million metric ton, during 2020. However, it is anticipated to recover to around 1,717 million metric ton in 2021, which will be a little lower than the demand observed during 2019. The growth of the cement industry is significantly influenced by the performance of the construction industry. With the construction sector expected to witness a decline in the residential, commercial, and industrial segments, the demand for cement and refractories is likely to remain affected until the recovery of investments in these segments.
- Over the medium term, the major factors driving the growth of the market studied are the growth in foundries and refractories, the rising nuclear power stations in Asia-Pacific, and the accelerating usage in surface coatings. The greatest growth in nuclear generation in Asia-Pacific is expected in China (11 stations are under construction, and 43 are being planned) and India (7 stations are under construction, and 21 reactors are expected to be brought online by 2031).
- The reducing dependence on zircon and the impact of COVID-19 are expected to hinder the growth of the market studied.
- The zircon segment accounted for the largest share of about 70% of the total volume of the market studied.
- China dominated the market studied, with about 50% of the total revenue, and it is expected to witness the fastest CAGR over the forecast period.
Key Market Trends
Increasing Demand from Zircon Flour/Sand
- Zircon is widely used in ceramics and foundry, mostly in the form of sand and flour (milled sand), due to its various properties, such as the ability to bind with all organic and inorganic sand binders, low acidity, low thermal expansion coefficient, and high spatial stability at increased temperatures, chemical stability at high temperatures, and good recyclability.
- In ceramics, zircon sand is used for its highly valuable properties such as a high refractive index for opacification and inducing white color. Its ancillary benefits, including its ability to impart greater mechanical strength, toughness, and durability to ceramic bodies and glass matrices, are established attributes and valued by specific segments in the ceramic industry, thereby catering to the markets with a preference for these attributes.
- Zircon is mostly used in the form of flour to introduce zirconium to frit compositions, or as micronized zircon, to produce glazes, engobes, and ceramic body compositions. Zircon sand is employed to improve the abrasion resistance of glazed surfaces, particularly for floor tiles.
- The adoption of modern tile manufacturing technologies (mainly the double charging process) for porcelain tiles had the most significant impact on the reduction of zircon use in ceramics, constituting approximately 90% of the assessed decline in zircon use in Chinese ceramics. The European and Chinese segments are expected to dominate the demand growth, with China leading the way till 2020.
- In foundry applications, zirconium is used widely as a molding base material for sand casting, investment casting, and Cosworth casting (aluminum). It is also used as mold coatings in die casting and in refractory paints and washes, as it reduces the wettability of other foundry sands.
- Asia-Pacific recorded the highest demand from the ceramics and foundry industry, followed by North America and Europe. Most of the demand is expected from China and India, enhancing the demand for zircon flour and sand.
- However, substitutes of zircon sand, such as silica sand, olivine sand, and chromite sand, are likely to hinder the market growth rate, as zircon sand is sold at a higher price than the substitutes.
China to Dominate the Market
- In Asia-Pacific, China is the largest economy in terms of GDP. In 2019, China witnessed a 6.1% growth in its GDP, which is the country's slowest rate of economic growth since 1990, due to its trade war with the United States. The IMF estimated a growth rate of 1.9% for China in 2020, and the growth is expected to witness a growth rate of 8.2% in 2021, subject to the post COVID-19 economic recovery.
- China is one of the fastest-growing economies, globally, and almost all the end-user industries in the country have been growing, owing to the rising population, living standards, and per capita income. However, owing to the international trade turbulences and unfavorable geopolitical affairs, the growth rate is expected to slow down during the initial years of the forecast period.
- China is gaining popularity as the fastest-growing consumer of nuclear energy in the present scenario. The increasing focus on the development of nuclear power resources is expected to increase the demand for zirconium.
- China has been a major consumer and exporter of ceramics globally. According to the China Building Ceramics and Sanitaryware Association, there were more than 1,450 ceramic tile manufacturers in the country, operating more than 3,600 production lines.
- China is the largest consumer and producer of ceramic tiles, accounting for more than 50% of the total global consumption. The three largest exporter countries of ceramic tiles include China, Spain, and Italy.
- The iron and steel industry consumes the largest portion of refractories, globally, and in China as well. The quantity of steel produced during FY'19 was 996.3 million metric ton compared to 920 million metric ton in 2018. This simply projects the demand for steel in the country, creating a market opportunity for refractories. The steady growth in the production of iron and steel in the country has been driving the growth of the refractories market in recent times. However, currently, due to the COVID-19 outbreak, the economic activities and industrial manufacturing activities were affected significantly in the country.
- The growth in industries, such as foundry, refractories, and ceramics, is expected to drive the market studied in the forecast period.
The global zirconium market is consolidated, with the top five companies accounting for around 70% of the global consumption. A majority of the consumption of zirconium is based in Asia-Pacific and Europe. Major players in the market include Iluka Resources Limited, Rio Tinto, Tronox Holdings PLC, and Eramet.
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