In response, Alcoa made a bid for Reynolds Metals, which would preserve its status as the aluminum leader. Alcoa is already the largest producer of non-metallurgical alumina, including calcium aluminate cements, tabular alumina, and calcined aluminas. The company accounts for over 20% of the world’s metallurgical and specialty alumina.
Such consolidation will no doubt reduce the demand for alumina and other refractories materials. Though the global outlook is strong for other minerals—including talc, wollastonite, pyrophyllite, kaolin and certain clays—increased competition will keep prices and profits down. Some mineral processors are still increasing capacity by as much as 20% in expectation of continued growth. Others are forming joint ventures overseas to take advantage of markets there.
The majority of bauxite and about half of the alumina consumed in the U.S. is imported. Of the total alumina used domestically, about 10% goes to nonmetallurgical uses, including ceramics and refractories. Annual alumina capacity is currently around 6.2 million tons. Exports of both materials increased in 1998 by roughly 2-3%.
Preliminary 1999 data shows that U.S. exports of alumina decreased by 21% for the first half of the year compared to 1998, whereas imports remained about the same. Preliminary 1999 data of bauxite imports for refractories shows that demand may be on a downward trend; 84,800 tons were imported in the first half of 1999, less than half of the total imported for all of 1998.
About 60% of all calcined alumina and 90% of tabular alumina is consumed by refractories. Global markets for these materials have been estimated at around 2 million and 300,000 tons per year, respectively. Refractories demand for both materials has decreased with the downturn in the steel industry, leading to a drop in prices. This trend is expected to continue. Demand for other ceramic applications is expected to remain constant.
On a positive note, the trend toward high-alumina refractories has increased the demand for specialty aluminas. White fused alumina also may eventually replace tabular alumina in refractories, especially in the U.S., if cost differences become a significant factor.
Turkey is the largest producer of boron ore in the world at over 40%, exporting materials that compete with boron compounds produced in the U.S. The United States almost shares the lead with Turkey at 39%. Chile also exports borates to the U.S. that are mainly derived from the country’s ulexite mines. Chinese researchers have patented a process for preparing low-cost ceramic fritted glazes using szaibelyite, a mineral rich in boron. This mineral may compete with both boron and magnesium compounds, since it replaces borax, boric acid and raw materials containing magnesium.
The global consumption of all borates is around 1 million tons per year, and is growing slowly at approximately 1% per year. Demand in Europe and Asia has remained relatively flat, whereas South America has seen consumption grow by as much as 4% per annum.
U.S. apparent consumption for all clays was an estimated 38 million tons in 1998. Mexico and the UK were the major sources for imported clays, mainly kaolin and bentonite, which increased from 64,000 to 75,000 tons. Exports also increased slightly to 5.1 million tons, with kaolin accounting for 67%.
Missouri leads the way in fireclay production, whose total for the U.S. decreased by ~7% to 604,000 tons in 1998. Over half of U.S. fireclay production is used in refractories, which may account for the decrease since volume is shrinking for this application.
U.S. production of common clay totaled almost 25 million tons in 1998, a slight increase from the previous year. This represents about 58% of all clay production. Over half of common clay is used for brick, followed by about a quarter for cement.
Though the domestic market is shrinking and cheaper imports are on the rise, some clay suppliers are able to continue growing by meeting customer demands. In Europe, consolidation continued as several more clay suppliers merged, leaving just a few big players. For instance, Stephan Schmidt Group in Germany produces 1.45 million tons of clay every year, with a 25% market share in Germany. Fuchs’sche Tongruben, an affiliate of the U.K.’s WBB, claims 40% of the total output of members of the German association of ceramic raw materials suppliers.
World production of feldspar grew slightly to 8.1 million tons in 1998. Italy is the leader at 2.4 million tons, followed by Turkey at 1 million ton (up from only 139,000 tons in 1989). Turkey exports a major portion (about 75%) to ceramic industries in Spain and Italy, as well as to North Africa, the Middle East and the Far East. Saudi Arabia may be a future source of feldspar, as recent tests have shown that pegmatic feldspar deposits would be suitable for ceramic applications.
The U.S. government has played an important role as a supplier of fluorspar as it liquidated stockpiles for the past 5 years. This liquidation is now mostly complete. Since there is also no domestic mine production of fluorspar, the U.S. relies on imports. As further evidence of the decline in U.S. demand for this product, imports for first quarter 1999 dropped to 150,000 tons, compared to 173,000 tons in the previous first quarter. Consumption of fluorspar used in enamel, glass and fiberglass, and other non-ceramic applications was 3,820 tons in first quarter 1999, compared to 4,540 tons in fourth quarter 1998.
Total production of fluorspar in Europe was 435,000 tons in 1997. Since Laport Minerals closed its UK operations recently, this market will be reduced by around 50,000-60,000 tons. World production decreased slightly to 4.54 million tons, with China the leading producer at ~53%. With such Chinese control of the market, U.S. supply is questionable as the Chinese government continues to decide how much to export via licenses and at what price. Though prices have recently been lower since large quantities of Chinese material were still available, this could change as this material disappears and license fees go up.
Total U.S. production of kaolin increased by 3.7% to ~9.8 million tons. Over half of this production is consumed by the paper industry. Georgia remains the largest producer of kaolin. Four out of the five leading producing companies of specialty clays in the U.S. produce kaolin. In decreasing order of tonnage these were Engelhard Corp. (total production includes fuller’s earth), ECC International, Thiele Kaolin Co. and Dry Branch Kaolin Co.
Kaolin or china clay is also a key component in whiteware products. An increase in demand for tableware in the U.S. has led to an increase in kaolin demand by as much as 12% in 1998 by some suppliers. This trend is expected to continue, as disposable income, new households and commercial construction continue to increase.
However, the situation is expected to be different elsewhere in the world. “Though continued growth is expected in the U.S., the Pacific region and Eastern Europe, losses in production from consolidation in Western Europe and the Middle East are decreasing demand in these regions,” says Tommy Kilgore, ECC International, Inc. “Improvement in performance is therefore key.”
In Asia, kaolin demand has reached almost 3 million tons for tableware, tiles and sanitaryware. China is the largest producer by volume in this region, with whiteware applications accounting for 60% of total kaolin production, consuming around 1.6 million tons. Due to the Three-Gorge Dam project, and the towns that will be relocated and houses rebuilt as a result, kaolin consumption in tiles and sanitaryware is expected to increase over the next few years.
By the year 2010, forecasts predict kaolin consumption in Asia as high as 1.2 million tons per year, of which 250,000 tons will be high-grade material for glazes and tableware. ECC has several joint ventures in China and Thailand to take advantage of this growth.
Chile is still the largest lithium carbonate producer in the world, followed by China, Russia, the United States and Argentina, in descending order of production. Zimbabwe’s Bikita Minerals has the largest petalite deposit in the world, and in 1998 produced around 50,000 tons of this and related minerals. For 1998, the U.S. remained the leading consumer of lithium minerals and compounds and the leading producer of value-added lithium materials. Estimated consumption increased slightly to 2,900 tons from the previous year.
Since one U.S. operation closed (FMC Corp. in North Carolina) in early 1998, U.S. exports of lithium compounds declined by nearly 29% (1,340 tons) compared to 1997. Imports increased by a whopping 166% to 2,590 tons as FMC’s Argentina operation reached full production. Further increases were expected for 1999. Chile accounted for 53% of all imports.
Lower global demand for lithium minerals has been mainly due to the Asian crisis. Though spodumene sales were down, petalite sales (all from Zimbabwe) increased in 1998-99. Canada’s Avalon Ventures Ltd. developed a new proprietary petalite processing technology that could have an impact on this industry in the next several years. Demand for petalite should remain strong overall, but shortages could result if the political situation in Zimbabwe worsens before the Avalon project comes on stream. “Major takeovers in the glass and ceramic industries of the U.S. by European companies will tend to make the technologies more uniform, which will result in some increase in the use of petalite,” adds Gary Pearse, project manager, Avalon Ventures Ltd.
Over the long term, lower prices may benefit the lithium industry by expanding the use of lithium materials into new high-volume but price sensitive markets. Potential new uses of lithium to prevent the deterioration of concrete may eventually increase the market for this material. Pearse also believes that growing interest in use of lithium in container glass, fiberglass, and other glass products—since it lowers melting temperatures, improves workabilty of the glass and produces more durable products—should provide a healthy 3% to 4% annual growth.
The largest magnesite production facilities in the world are in China, North Korea and Russia. These three countries account for 59% of the world magnesite production capacity. Japan and the U.S. account for 56% of the world’s magnesium compounds production capacity from seawater or brines. World production of magnesite increased slightly in 1998 to 10.8 million tons. China is the dominant supplier of dead-burned magnesia and increased the quantity that it exported to the U.S. in 1998 from that exported in 1997.
Demand for refractory magnesia is expected to continue to decline as improvements in refractory performance and service life continue. Imports from China will also remain a threat. However, Dr. Charles Semler, refractories consultant, points out: “There are numerous opportunities for refractory raw materials suppliers to benefit by offering more value-added materials. This may allow suppliers to maintain or increase profitability, despite the loss of volume.”
Roskill predicts that the world supply of natural graphite will exceed demand until at least 2000, reaching 700,000 tons per year. Refractory applications for the iron and steel industry will be the major consumer. If the Chinese iron and steel industry continues to increase its domestic consumption, exports may decline, encouraging new producers to enter the market.
There are no U.S. producers of natural graphite, with the material being mainly imported from Mexico, Canada and China. U.S. apparent consumption increased significantly by 38% to 29,000 tons in 1998, with refractory applications leading at 33%. Primary recycling of refractory articles is growing , with brick and linings leading the way in the recycling of graphite products.
Demand from the U.S. glass industry decreased about 5% in 1998, since many manufacturers moved to Mexico and some switched to feldspathic sand. This loss is expected to be offset by domestic growth in 2000. Safety and health regulations will continue to impact the industry.
The European Union produces around 16 million tons of glass sand annually, which is used in a wide range of applications. Flat and container glass are the largest consuming markets. Demand for glass sand has recently increased by 2-3%. Flat glass remains a good growth prospect, in addition to technical and tableware glass. Glass sand major producers in Europe include SCR-Sibelco SA (Belgium), Quarzwerke GmbH (Germany), Hepworth Minerals and Chemicals Ltd. (UK) and Saint-Gobain (France).
Specialty silicas are also expected to see some growth, growing at a rate of ~4% a year through 2002 to a global market over $2 billion, according to Kline Europe SA (Brussels, Belgium). North America and Europe currently dominate production. Specialty silicas fall into four categories: precipiated silica, silica gel, fumed silica and colloidal silica. A major application for fumed silica is refractories, in addition to coatings and abrasives. Precipitated and colloidal silicas find application in catalysts, among others.
Overall, apparent consumption was 8% higher for the same period (reaching 729,000 tons), whereas production was 1% lower. Imports increased by 4% to 7,960 tons, whereas exports were 15% lower (206,000 tons) due to the Asian economic crisis. The total estimated value of domestic soda ash produced in 1998 was $840 million. Total world production decreased slightly to 31 million tons in 1998.
World demand for soda ash is expected to grow 1.5% to 2% annually in the early part of the next century.
Imports increased by almost 10% to 136,000 tons, with about 10,000 tons going for ceramics and refractories, whereas exports decreased by the same amount. World production of talc and related materials decreased about 6% to 8.14 million tons. China remained the world’s leading producer of talc, followed by the United States, India, Brazil and Finland. Japan was the largest producer of pyrophyllite.
Since the major talc products, including ceramics, are projected to experience slow growth through 2003, the rate of growth in talc consumption is expected to range from 1.5% to 2.5% for the next few years. Increased competition from imported talc should continue.
Domestic consumption of pyrophyllite decreased by 8% from that of 1997, with sales in general decreasing for ceramics and refractories. However, according to Cihat Kutbay of Resco Products’ North State Pyrophyllite Division, U.S. demand for his company’s product increased by 50%, with an additional increase of 10% predicted for 1999.
Though no major changes are expected in most pyrophyllite markets, Resco Products plans to expand its production capacity by 25% and expects U.S. demand for its pyrophyllite and related materials to increase by 20% in 2000 due to new applications for the mineral.
Worldwide demand for wollastonite is expected to continue to increase, though at much slower rates. Annual growth in domestic sales is predicted to be between 3% and 5%, or slightly greater than the gross domestic product through 2003.
Of the total zirconia produced globally per year (36,000 tons), the mineral baddeleyite accounts for less than half (17,000 tons). Synthetic zirconia produced from zircon sand makes up the rest. About 10,000 tons of baddeleyite is used in refractories, 3000 tons in ceramic pigments, 2000 tons in abrasives and the remainder in other applications. Synthetic zirconia is mainly used in refractories and pigments (26% each), followed by electronics and advanced ceramics (21% for both).
The global market for zirconia was predicted to increase by as much as 10% in 1999. Zircon production could reach over 1 million tons by 2000, resulting in zirconia production of roughly 70,000 tons.
Refractory and pigment markets are expected to continue to offer growth, though which type of zirconia is used may depend on price and availability. Fused zircon could replace baddelyite in some applications.
On the other hand, an oversupply of zircon opacifiers has led to a decrease in demand in Asia, with prices dropping by 50% for micronized zircon. Prices are not expected to reach 1996 levels until 2000. Most of Asia and Japan have seen a 25-30% drop in zircon consumption over the last few years. Micronized zircon may see an increase in China in the future as manufacturers continue the switch to this higher grade, whereas Japan’s demand will be relatively flat unless the economy improves.
Author’s note: The majority of this information is based on data compiled by the United States Geological Survey; Industrial Minerals; and Roskill Information Services Ltd., 2 Clapham Rd., London SW9 0JA, England, (44) 171-582-5155 fax: (44) 171-793-0008. All units are in metric tons, unless otherwise noted.
Germany’s Fuchs’sche Tongruben acquired Villeroy & Boch AG’s plastic clay operations at Mogendorf, Westerwald.