Raw & Manufactured Materials: 2008 Overview
The ongoing slump in the U.S. housing market is causing widespread consequences for materials producers. The decreasing demand for tile and sanitaryware is affecting the feldspar and clay sectors, for example, while boron minerals are being impacted by reduced glass consumption. In comparison, the electronics industry is providing growth opportunities for other minerals, including quartz crystal.
Price increases seem to be having a favorable affect on U.S. market values for many materials, though persistent overseas competition, particularly from China, continues to be a concern. Following are some of the recent trends in a few specific materials consumed in the ceramic, glass and related industries.
AbrasivesBonded and coated abrasive products accounted for most abrasive uses of aluminum oxide and silicon carbide in 2006. U.S. and Canadian production of fused aluminum oxide (regular and high-purity grades) and silicon carbide was flat for the year. Regular-grade fused aluminum oxide production in 2006 was again 10,000 metric tons (t), while its estimated value dropped to $2.8 million from $3.57 million in 2005. The U.S. produced 5000 t of high-purity fused aluminum oxide with an estimated value of more than $4.63 million in 2006 (up from $4.14 million in 2005).
U.S. imports for consumption of fused aluminum oxide rose about 5% to 258,000 t, while exports increased by nearly 8% to 15,100 t. Import sources for crude fused aluminum carbide included China (77%), Canada (11%), Venezuela (11%) and other (1%).
U.S. and Canadian production of silicon carbide has remained nearly unchanged since 2003 at 35,000 t. However, the estimated value for 2006 production was $23.7 million, an increase of around 5% compared to 2005. U.S. silicon carbide imports for consumption decreased by 12% to 179,000 t, and exports rose by 26% to 21,100 t. Silicon carbide grain was imported from China (35%), Brazil (24%), Russia (10%), Venezuela (10%) and other (21%).
As in past years, imports and higher operating costs continued to challenge abrasives producers in the U.S. and Canada. Foreign competition, particularly from China, is expected to persist and further curtail production in North America.
Bauxite and AluminaWorld production of bauxite and alumina increased by close to 5% in 2006 to 177 Mt compared to 2005. Countries with the highest mine production in 2006 included Australia, 61.4 Mt (up 2% vs. the previous year); Brazil, 21 Mt (up 6%); and China, 20 Mt (up 10%). Total U.S. apparent consumption for bauxite and alumina was 2.5 Mt (aluminum equivalent) in 2006, down 18% from 2.94 Mt in 2005. Domestic bauxite was used in the production of nonmetallurgical products, such as abrasives, chemicals and refractories.
The U.S. relies almost 100% on imports for its bauxite supply. Total bauxite imports for consumption in 2006 were 9.5 Mt, a decrease of 9% from the previous year. Bauxite was imported from Jamaica (31%), Guinea (30%), Brazil (17%), Guyana (12%) and other (10%).
More than 90% of imported bauxite was converted to alumina, and of the total alumina used, about 90% went to primary aluminum smelters (the remainder went to nonmetallurgical uses). Annual alumina capacity was 5.75 Mt. U.S. imports of alumina declined by 9% in 2006, to 1.7 Mt. Sources of alumina imports included Australia (50%), Suriname (20%), Jamaica (9%) and other (12%).
Worldwide bauxite resources are estimated to be 55 to 75 billion tons, located in South America (33%), Africa (27%), Asia (17%), Oceania (13%) and elsewhere (10%). Bauxite is the only raw material used in the production of alumina on a commercial scale in the U.S. However, the vast U.S. resources of clay are technically feasible sources of alumina. Other domestic raw materials, such as anorthosite, alunite, coal wastes and oil shales, offer additional potential alumina sources. Although it would require new plants using new technology, alumina from these nonbauxitic materials could satisfy the demand for primary metal, refractories, aluminum chemicals and abrasives.
BoronThe estimated value of boric acid contained in minerals and compounds produced domestically in 2006 was $265 million. Boron minerals and chemicals were principally consumed in the North Central and Eastern U.S. The estimated consumption of boron compounds in the U.S. in 2005 (the most recent year for which the breakdown is available) was for glass and ceramics, 70%; soaps and detergents, 5%; fire retardants, 4%; agriculture, 2%; and other, 19%. Apparent U.S. consumption of boron minerals and chemicals in 2006 decreased by almost 10% to 400,000 t compared to 2005.
The U.S. was the world’s leading producer of refined boron compounds during 2006, though production was flat for the year. About one-half of domestic production was exported. U.S.-processed products had fewer impurities and were produced with lower emissions than in other countries. The U.S. industry also produced boron minerals with a higher productivity per worker hour than those produced in other countries. It was reported that a leading indicator for demand for refined borates was a strong housing market, which is cause for concern in light of the current U.S. housing slowdown.
U.S. imports for consumption of boric acid increased by 13% to 60,000 t (gross weight) in 2006. Import sources included Turkey (57%), Chile (31%), Peru (5%), Russia (3%) and other (4%). Exported U.S. borate materials competed with borax, boric acid, colemanite and ulexite primarily from Turkey (the leading producer of boron ore in the world). U.S. exports of boric acid rose by 8% to 200,000 t (gross weight) for the year.
ClaysIn 2006, clay and shale production was reported in 42 states. While about 220 companies operated approximately 800 clay pits or quarries, the leading 20 firms supplied about 50% of the tonnage and 80% of the value for all types of clay sold or used in the U.S. Domestic producers estimated that 2006 sales or use were 41.3 Mt valued at $1.62 billion (excluding attapulgite-type fuller’s earth), a slight decrease from 2005’s 41.6 Mt.
Apparent U.S. consumption decreased slightly to 35.7 Mt. Major uses for specific clays were estimated as follows: ball clay-40% floor and wall tile, 31% sanitaryware and 29% other uses; bentonite-26% absorbents, 23% foundry sand bond, 22% drilling mud, 13% iron ore palletizing and 16% other uses; common clay-61% brick, 16% lightweight aggregate, 15% cement and 8% other uses; fire clay-46% refractories and 54% heavy clay products; fuller’s earth-86% absorbent uses and 14% other uses; and kaolin-61% paper and 39% other uses.
Total imports for consumption were 330,000 t, a 9% increase over 2005. Import sources included Brazil (74%), Mexico (6%), United Kingdom (6%) Canada (4%) and other (10%). Exports increased by about 4% to 5.89 Mt for 2006. Major markets for exported clays (by descending order of tonnage) were Canada, Japan, Mexico, Republic of Korea, France, India and Germany.
FeldsparU.S. feldspar production in 2006 had an estimated value of about $43 million. The three leading producers accounted for about two-thirds of the production, with six other companies supplying the remainder. Apparent U.S. feldspar consumption dipped slightly to 755,000 t in 2006 (down from 761,000 t in 2005). The estimated 2006 end-use distribution of domestic feldspar was glass (64%) and pottery and other (36%).
Marketable U.S. production of feldspar rose by a mere 1% in 2006 to 760,000 t, and imports for consumption decreased by 420% to 5000 t from 26,000 t in 2005. Imports came mainly from Turkey (61%) and Mexico (38%). Exports decreased as well, to 10,000 t from 15,000 t in 2005.
Worldwide feldspar mine production rose to 13.3 Mt in 2006, a 3% increase over 2005. Italy’s feldspar production remained flat at 2.5 Mt, while production in Turkey increased by 12% to 2.5 Mt. Other leading producers included Japan and Thailand, each remaining flat with 1 Mt.
Glass, including beverage containers and insulation for housing and building construction, continued to be the leading end-use of feldspar in the U.S. Domestic shipments of glass containers for the first eight months were flat in relation to the comparable period in 2005, according to the U.S. Census Bureau. Feldspar use in tile and vitreous sanitaryware was reflected in housing construction, which could prove problematic for feldspar producers unless the U.S. housing market rebounds.
SilicaOften called silica, silica sand and quartz sand, industrial sand and gravel valued at about $767 million was produced by 73 U.S. companies from 151 operations in 2006. Domestic sales of industrial sand and gravel increased by about 4% compared with those of 2005, owing to a robust construction sector of the U.S. economy and worldwide demand.
U.S. apparent consumption was 29.7 Mt in 2006, a 4% increase from that of the previous year. About 35% of U.S. tonnage was used as glassmaking sand, 18% as foundry sand, 14% as well-packing and cementing sand, 8% as building products, 3% as abrasives sand and 22% for other uses.
Imports increased by about 11% compared with 2005. Mexico's share of imports increased to 49%, and Canadian imports rose to 44%. Exports of industrial sand and gravel in 2006 increased by about 3% over 2005 levels.
Quartz crystal (a form of crystalline silica) has been increasingly produced overseas in the past several years. Electronic applications accounted for most industrial uses of quartz crystal (other uses included special optical applications). Virtually all quartz crystal used for electronics was cultured rather than natural crystal. Electronic-grade quartz crystal was essential for making filters, frequency controls and timers in electronic circuits employed for a wide range of products, including communications equipment, computers and many consumer goods.
Trends indicate that demand for quartz crystal devices should continue to grow, and quartz crystal production should remain strong well into the future. Growth of the consumer electronics market will continue to promote global production, and the growing global electronics market may require additional production capacity worldwide.
According to a report from The Freedonia Group, U.S. specialty silica demand is forecast to grow 5.4% annually to $1.65 billion in 2011.1 Specialty silicas, also known as synthetic amorphous silicas or synthetically produced nanocrystalline silicon dioxide, include precipitated, fumed, gel, sol and fused types. Precipitated silica constitutes the largest silica type, both in volume and value.
Fumed silica will experience the fastest advances, according to the report, spurred by growth in the electronics markets, which primarily utilize fumed silica in slurries. Despite being the smallest silica type by volume, fumed silica constitutes an important segment of the specialty silica market in value terms due to its high price relative to other silica types.
Soda AshU.S. 2006 soda ash production was estimated at 10.9 Mt, valued at about $928 million, essentially flat in comparison to 2005's 11 Mt production. Apparent consumption decreased 6% to 6 Mt. Based on final 2005 reported data, the estimated 2006 distribution of soda ash by end use was glass, 49%; chemicals, 27%; soap and detergents, 10%; distributors, 5%; misc-ellaneous uses, 4%; flue gas desulfurization and pulp/paper, 2% each; and water treatment, 1%.
Imports for consumption of soda ash decreased by 33% to 6000 t in 2006, while exports increased by almost 3% to 4.8 Mt. Canada provided the majority of imports (98%).
Although the U.S. soda ash industry posted higher average annual values in 2005, most of the increases included energy and transportation surcharges. Because of China's increased soda ash production posing a barrier to U.S. export sales in the Far East markets, the U.S. Congress passed legislation to aid the Wyoming soda ash industry's global competitiveness by reducing the federal royalty rate from 6 to 2% for a five-year period.
In May 2006, a major domestic soda ash producer announced a $15 per short ton increase in the list and off-list price of soda ash, effective July 1 or as contracts permitted. Other producers soon followed this price move. The same company made a second price announcement in September that would raise the off-list price another $10 per short ton. One other company followed this move, but other companies remained uncommitted by the year's end.
The economic slowdowns in the domestic automobile construction and building construction industries affected soda ash consumption in 2006. Notwithstanding the continuing economic and energy problems in certain areas of the world, overall global demand for soda ash is expected to grow from 1.5 to 2% annually for the next several years. If the domestic economy improves, U.S. demand may be slightly higher in 2007.
Talc and PyrophylliteThe total estimate crude ore value of 2006 domestic talc production was $24.9 million. Domestically produced ground talc was used in ceramics, 32%; paint, 20%; paper, 16%, roofing, 8%; plastics, 5%; rubber, 3%; cosmetics, 1%; and other, 15%. Production of pyrophyllite increased slightly from that of 2005. Consumption (in decreasing order by tonnage) was in refractory products, ceramics and paint.
U.S. mine production of talc and phyrophyllite rose to 880,000 t, an almost 3% increase over 2005 levels. U.S. imports of talc increased by an estimated 14% compared with those of 2005, and Canada and China combined supplied approximately 65% of all imported talc in 2006. Exports decreased by 7% in comparison to 2005. Canada remained the major destination for U.S. talc exports, accounting for about 45% of the tonnage.
Overall sales into the U.S. talc markets have declined during the past 20 years. Apparent consumption reached a high of 1.05 Mt in 1990 and declined to 857,000 t in 2004. There has been a mild rebound in U.S. apparent consumption during the past two years. Based on current markets, U.S. consumption will probably be in the range of 875,000 to 925,000 t for the next several years. No major changes in market trends are evident in world markets, so world production is also expected to remain relatively stable.
ZirconiumThe zirconium-silicate mineral zircon is produced as a co-product from the mining and processing of heavy minerals. Ceramics, foundry applications, opacifiers and refractories are the leading end uses for zircon. The leading consumers of zirconium and hafnium metal are the nuclear energy and chemical process industries.
Global production of zirconium concentrates increased to 920,000 t in 2006, a moderate increase over 2005 levels. Global demand for zircon by the ceramic and chemicals industries helped to increase the demand by 3% compared to 2005. Meanwhile, prices for zircon concentrate increased to record-high levels. In 2006, imports of zirconium ores and concentrates decreased by about 18%, while exports increased by 3%.
According to a report from Roskill Information Services, zircon demand exceeded supply between 2002 and 2005.2 The shortage of zircon in the market would have continued into 2006 had it not been for the emergence of Indonesia as a major new supplier of zircon, resulting in the market entering a period of oversupply in 2006.
World consumption of zircon was about 1.25 Mt in 2006, according to Roskill, and overall growth in demand is likely to continue at around 3.8% per year to reach just over 1.5 Mt by 2011. Several new zircon-producing mineral sands projects have come online during the first half of 2007, and several more are anticipated for 2008 and 2009. Despite overall growth in production of only around 4% per year to 2011, the impact of these new projects is that the oversupply observed during 2006 will continue. Prices are therefore forecast to decline.
The report indicates that the use of zircon in the manufacture of synthetic zirconia and zirconium chemicals has shown the fastest growth of all segments (7% per year). The main stimulus in this market has been the increased demand for zirconium products in coatings and catalysts, as well as the production of synthetic zirconia to replace diminished supplies of baddeleyite, the naturally occurring form of zirconia that is now extracted from only one mine in Russia.
Editor's note: The foregoing information, except where noted, was compiled from the U.S. Geological Survey (www.usgs.gov). In most cases, 2006 data were the latest available.