According to a recent study from The Freedonia Group, Inc., Cleveland, Ohio, demand for refractory products in the United States is projected to increase 2.5% per year through 2003 to $2.8 billion, a deceleration from the mid/latter 1990s' pace. Much of the slowdown will reflect cyclical factors, in particular some moderation in new capital investment following several years of healthy gains. This will impact most of the major refractory-using markets, including ceramics and glass, minerals processing, iron and steel, and nonferrous metals. Advances in manufacturing processes have occurred in most of these industries, resulting in less intensive use of refractories per unit of output produced (for example, electric arc furnace steelmaking). Refractory suppliers have actually reinforced this trend by developing products offering superior performance and increased longevity, which require less frequent replacement and maintenance.
Prospects are better in the petroleum and chemicals market, where capital spending is expected to pick up as global demand firms, stimulating refractory purchases. In addition, less traditional refractory markets such as waste-to-energy and heat recovery, electronics and medical equipment hold favorable prospects, but the small size of these markets will limit their contribution to overall growth.
Shipments of refractory products from U.S. facilities will increase 2.5% annually through 2003 to $2.9 billion, says the Freedonia study, just about matching growth in demand and resulting in a flattening out of the U.S. trade surplus. On balance, sustained competition from foreign producers-based both in developed and developing nations-will be offset by somewhat improved export prospects in many countries as the global economic crisis continues to recede. In volume terms, U.S. refractory shipments will rise 0.5% per year through 2003 to 3.8 million tons, a significant deceleration from the recent historical performance.
Among the major refractory forms, monolithic castables and preformed shapes hold the best growth prospects, benefiting from superior performance and design flexibility relative to other forms. Zircon/zirconia, extra-high alumina, silicon carbide and other more specialized refractory materials offering superior performance in key applications will exhibit favorable gains. Cost-effective refractory materials such as silica, ceramic fibers, high-alumina and insulating types will register above-average growth as well.
Over 100 companies manufacture refractory products in the U.S., but the industry has been consolidating rapidly in recent years in the face of highly mature markets and intensely competitive business conditions. In 1999, Alpine Group sold its Premier Refractories unit to Cookson Group of the U.K.; and Global Industrial Technologies (parent of Harbison-Walker Refractories), was acquired by RHI AG (formerly Radex Heraklith Industriebeteiligungs) of Austria. RHI was already a major player in the U.S. refractory industry through VRD-Americas and its North American Refractories Co., or NARCO, subsidiary. Other leading refractory producers include Allied Mineral Products, Baker Refractories, Minerals Technologies (via MINTEQ), Morgan Crucible, National Refractories Holding Co., Resco Products and Compagnie de Saint-Gobain. The refractories industry worldwide has changed drastically with various high-profile corporate buyouts/mergers resulting in plant closings and sales, brand eliminations, layoffs, retirements, and many personnel changes (within and between companies). Additionally, experienced refractories specialists at many companies are approaching retirement age. A period of transition and adjustment is to be expected.
Refractory practices have also changed, with increased lining life in most applications. Basic oxygen steelmaking furnace linings have exceeded 20,000 heats. In the past, glass furnaces were repaired every four years, which was extended to every 10 years, and is now every 13 years-with little or no preventative maintenance. These trends will continue into the future as refractory manufacturing technology becomes more advanced.