Raw & Manufactured Materials: 2002 Review & Forecast

January 1, 2002
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Increasing imports, continued consolidation, high energy prices and high labor costs all affected raw and manufactured materials producers—and in many cases the prices they passed along to their customers—in 2000. While many industries continued to experience record sales, thereby boosting material demand, a hint of the impending recession could already be seen in many sectors by the end of the year, with several mineral segments posting lower production and consumption figures overall compared to 1999. Still, as these industries look forward to 2002 and beyond, many are optimistic that the economy will rebound quickly, leading to increased demand for raw and manufactured materials in the next several years. Following is a brief overview of some of the key material segments that serve the ceramic industry.

Abrasives

U.S. production of regular-grade fused aluminum oxide in 2000 was around 90,000 tons, an increase of about 6% by weight over the 1999 regular-grade fused aluminum production. Imports of crude fused aluminum oxide increased by about 21% in 2000 to 110,000 tons compared with those of 1999, while imports of ground and refined fused aluminum oxide increased by 57% to 117,000 tons. Canada, China and Venezuela supplied 44%, 41% and 15%, respectively, of the crude imports, while China, Canada and Austria provided 44%, 41% and 15%, respectively, of the ground and refined material. 2000 exports of all fused aluminum oxides remained the same at 9020 tons, but the value of those exports increased to $23.5 million, compared to $20.4 million in 1999.

Two companies—Exolon-ESK, in Hennepin, Ill. (now a subsidiary of Washington Mills Electro Minerals Corp.), and Norton Co. in Shawinigan, Quebec, Canada—produced approximately 45,000 tons of abrasive-grade silicon carbide (SiC) in North America in 2000, a 31% decline compared to 1999. Approximately half that amount was material for metallurgical and other non-abrasive uses. Imports of crude SiC increased by about 5% during the year to 162,000 tons, while imports of SiC in ground or refined form increased by about 51% to 28,300 tons. China accounted for 82% of the crude SiC imports and 48% of the ground or refined SiC, up 8% and 75%, respectively, compared to 1999. A large part of the Chinese imports, however, reportedly included metallurgical-grade material. Exports of crude SiC increased by about 75% to 1210 tons, with the majority (871 tons) going to Mexico. Exports of ground and refined SiC increased by 6% to 8810 tons, with the majority (7260 tons) going to Canada.

Fused aluminum-zirconium oxide for abrasive applications was produced at two plants in Canada, one belonging to Norton Co. and one belonging to Washington Mills Electro Minerals Corp. However, production and consumption data were unavailable.

Washington Mills Electro Minerals Corp. was the only commercial producer of boron carbide in the U.S. in 2000. The U.S. imported 277 tons of boron carbide, primarily from Germany, China and Japan, and exported 28.6 tons.

As one of the world’s leading producers of synthetic industrial diamond, the U.S. accounted for an estimated output of 248 million carats in 2000. Only two U.S. companies produced synthetic industrial diamond during the year—Mypodiamond, Inc., Gibbstown, N.J., and GE Superabrasives, Worthington, Ohio. The U.S. also remained the world’s largest market for industrial diamond in 2000, consuming an estimated 484 million carats. Imports decreased 20% from 1999 to 2.52 million carats valued at $13.4 million. Exports and re-exports also decreased by about 9% to 3.62 million carats valued at $34.6 million. Total industrial diamond output worldwide during 2000 was estimated to be well above 800 million carats.

In the next few years, cheaper imports and higher domestic costs will challenge U.S. producers of fused aluminum oxide and silicon carbide, and competition from developing nations, such as China, will continue to lead to decreases in domestic output. The traditional suppliers among the Western industrialized nations are expected to continue consolidating and contracting. The U.S. will continue to be the world’s largest market for industrial diamond well into the next decade, and it will also remain a significant producer and exporter of this material. However, the strength of the U.S. demand for diamond will depend on the vitality of the nation’s industrial base and on how well the life cycle cost effectiveness of diamond compares with competing materials that are initially less expensive.

Alumina and Bauxite

World production of both bauxite and alumina grew at an unprecedented rate between 1994 and 2000, resulting in bauxite production in 2000 of 135.7 tons, around 26% higher than in 1994, and alumina production of 51.6 tons, 28% higher. Average annual growth rates were 3.9% and 4.2%, respectively, over the period, with a 6% growth rate recorded for bauxite between 1999-2000 and a 5% growth rate recorded for alumina in the same period.

Several major consolidations occurred among suppliers in 2000. Alcoa Inc. completed its acquisition of Reynolds Metals Co. on May 3, and a merger between Alcan Aluminum Ltd. and algroup, the aluminum division of Aluisuisse Lonza Group Inc., was completed on October 17. These actions enabled both Alcoa and Alcan to achieve record earnings in 2000, despite what Alcoa termed “increasing softness in the construction, transportation, building, and distribution markets,” as well as significantly higher energy prices. Alcoa reported a 41% increase in its income for 2000, due in large part to the Reynolds Metals acquisition, while Alcan reported a 34% increase in earnings.

Approximately 39% of 2000 world bauxite output came from Australia, 13% from Guinea, 10% from Brazil and 9% from Jamaica. Ten countries accounted for over 90% of production. In regional terms, output from South America/Caribbean was the second largest after Australia. Production in Australia, South America/Caribbean and Asia all increased between 1990 and 2000, but it declined in Europe and North America. Less than 1% of the U.S. requirements for bauxite are produced domestically; most of the demand is filled by imports.

Weakness in the national economies of most areas of the world will restrict growth for both materials. It is anticipated that 2001 figures will show decreased demand for aluminum. However, most forecasters anticipate that this weakness will be short-lived, and that demand will pick up in 2002 and thereafter. Demand for bauxite is forecast to grow rather slowly at 0.8% per year to 2006. The highest growth in percentage terms is expected in its minor uses and as a proppant. The market for alumina is expected to expand somewhat faster, at about 2.4% per year, bolstered by demand for cement, chemicals and ceramics.

Bismuth

U.S. bismuth consumption increased 4% during 2000 to approximately 2130 tons, with virtually all of the domestic supply coming from imports. An estimated 5% of domestic supply was obtained from the recovery of secondary bismuth from fusible alloy scrap.

World refinery production increased in 2000, easing concerns over supply and contributing to a downturn in prices. China produced 30% of the world total of 4.4 million tons, followed by Mexico at 21%, Peru at 17% and Belgium at 16%, with other countries producing the remainder. Most of the U.S. imports came from Belgium (35%), Mexico (22%), the UK (18%) and China (18%).

In recent years, bismuth has gained popularity as a nontoxic substitute for lead in ceramic glazes, crystalware, pigments and other applications. Bismuth is also used in chemicals, pharmaceuticals and metallurgical additives. The use of bismuth oxide additions in electronic ceramics increased in 2000, especially in Japan. The additions enhance the electronic properties of ferrites and ceramic capacitors.

Demand for bismuth is expected to grow over the next several years, especially as a lead substitute and in other new applications. While a significant increase in supply is unlikely, a global shortage is not anticipated. Despite any increase in world demand, Chinese supplies are expected to help keep the bismuth market stable.

Beryllium

Beryllium, a metallic form of the mineral beryl, has physical and chemical properties such as stiffness, resistance to corrosion from acids, and electrical and thermal conductivity that make it useful for various applications in its alloyed, oxide and metallic forms. Beryllium oxide (beryllia) is an excellent heat conductor, with high levels of hardness and strength, and it can also act as an electrical insulator in some applications. Because the cost of beryllium is high compared to that of other materials, it is generally used only in those applications in which its properties are crucial.

In 2000, both domestic mine shipments and beryllium ore consumption continued to trend downward. U.S. apparent consumption of all beryllium materials was estimated to be about 300 tons in 2000, compared with about 385 tons in 1999. Exports were down by about 14% compared with 1999, while imports increased by about 20%. However, net import reliance as a percent of apparent consumption was estimated to be about 37% in 2000, compared with about 48% in 1999. This indicates that domestic production will continue to be adequate to meet U.S. demand.

Worldwide, beryl (beryllium content) production decreased by about 9% compared to 1999. The two major producers, Russia and the U.S., accounted for about 97% of total production.

Future demand for beryllium is expected to rise, but this depends in large part on the markets for automotive electronics, computers, portable telephones and aerospace equipment.

Figure 1. U.S. boron consumption by end use, 2000.

Boron

U.S. production of boron minerals and compounds declined by about 12% in 2000 to a total of 546,000 tons, while domestic consumption declined by about 14% to 360,000 tons. The glass industry remained the largest domestic market in 2000, accounting for 76% of boron consumption. Insulation-grade glass fibers accounted for 47%; textile-grade glass fibers, 18%; boron sold to distributors, 9%; borosilicate glasses, 7%; soaps and detergents, 7%; enamels, frits and glazes, 4%; and other uses, 8% (see Figure 1).

Approximately 532,000 tons of boron minerals and compounds were exported, an increase of about 10%, with the largest recipients being the Netherlands (43%), Spain (10%), Japan (8%), Mexico (6%) and the Republic of Korea (5%). Imports declined by about 25% to a total of approximately 193,000 tons, with the largest amounts coming from Chile (38%), Turkey (36%) and Italy (13%).

Worldwide, an estimated 4.2 million tons of boron minerals and compounds were produced in 2000, a 4% decline compared to 1999. Glass accounted for 41% of total consumption; ceramic and enamel frits and glazes, 13%; detergents, soaps and personal care products, 12%, and agricultural micronutrients, 6%.

Demand for boron in the U.S. is expected to remain strong. New applications in gypsum board and strong demand in the glass industry are expected to increase consumption. Additionally, boron compounds and chemicals have been shown to reduce energy consumption in the creation process of many products, including glass and ceramics, and this may become an important factor if energy costs increase again in the future. World demand for boron is also expected to grow, primarily in the glass industry.

Figure 2. U.S. consumption of ball clay, 1999-2000.

Clays

Overall production of clays in the U.S., including ball clay, bentonite, common clay and shale, fire clay, Fuller’s earth and kaolin, decreased by 3% in 2000 to 40.8 million tons. Exports increased about 9% to 5.3 million tons, while imports increased about 6% to 96,000 tons.

Between 1996-1999, the ball clay industry sustained an exceptional growth rate of 7.6% per year. The robust economy and associated booming construction industry prior to the latter half of 2000 resulted in healthy sales of sanitaryware and other ceramic products that use ball clay. In 2000, domestic consumption increased compared to 1999 for floor and wall tile, 12%; refractories (including firebrick, blocks, shapes, high-alumina brick and specialties, and kiln furniture), 38%; and miscellaneous ceramics (including catalysts, electrical porcelain, fiberglass, fine china/dinnerware, glazes and mineral wool), 52%. However, declines in consumption were recorded for pottery (81%) and sanitaryware (12%). (See Figure 2.)

The recession that began in March 2001 resulted in declining consumption of industrial products in many sectors. Construction was one of the last business segments to be affected, but it is expected that construction projects will continue to gradually tail off in 2002. Ball clay sales are expected to decline slightly over the next year, at least until the economy improves.

Major business consolidations have occurred over the past several years, resulting in five major competitors—Imerys (based in France with locations worldwide), Unimin (based in Belgium with locations worldwide), WBB Minerals Ltd. (based in the U.K.), H.C. Spinks (based in the U.S.) and Old Hickory Clay (based in the U.S.)—dominating the U.S. ball clay market. Only one new company, Alchemy Ventures Ltd., located in Deary, Idaho, is planning to bring a new ball clay deposit into production in 2002. Pilot plant testing is under way. Competition coupled with the slowing economy appears sufficient to minimize any significant price increases over the next several years.

The production of common clay and shale declined slightly (4%) to 23,700 tons in 2000. Of this amount, the majority was supplied from North Carolina (10%), Texas (9%), Alabama (9%), Georgia (6%) and Ohio (6%). Use of common clay and shale increased 23% in ceramic floor and wall tile while declining nearly 40% in refractory applications. Demand for common clay and shale in heavy clay products (including extruded brick, drain tile and sewer pipe, flue linings, and miscellaneous clay products) declined about 2% compared to 1999 levels.

Production of fire clay increased about 16% in 2000 to 476,000 tons, with the largest increase (53%) in heavy clay products. Production of Fuller’s earth also increased by about 12% to 2.9 million tons, but it was uncertain how much of that amount was used in ceramic applications. Data were also unavailable for the use of bentonite in ceramics in 2000.

The kaolin industry has been mostly stagnant over the last several years. Production in 2000 slipped 4% to 8.8 million tons. Of this amount, 18% (1.5 million tons) was used in ceramic applications (see Figure 3). This was 3% lower than the share held by ceramics in 1999 (1.9 million tons), and the overall quantity of kaolin used in ceramics also decreased by about 18%. Segments posting the biggest declines were electrical porcelain (down 38% compared to 1999) and miscellaneous refractories (down 56%). Other applications for kaolin included fillers, extenders and binders (primarily for paper and paper coatings), 53%; chemical manufacture, 0.4%; portland cement, 1%; and miscellaneous, 6%. Exports comprised 31% of overall production at 2.7 million tons, an 11% increase over 1999 levels. Import information was unavailable.

As with ball clay, kaolin consumption in sanitaryware and other ceramic products used in construction is expected to decline as the construction industry slows. Kaolin consumption in fine china and dinnerware is expected to remain relatively steady.

Despite several significant business consolidations over the last several years, approximately 25 companies in nine states mine kaolin. Ongoing competitive forces coupled with a soft economy will probably temper any desire by producers to increase kaolin prices in the near future.

Figure 3. U.S. kaolin consumption by end use (ceramics), 2000.

Feldspar and Nepheline Syenite

A 3% decline in the shipment of glass containers, along with slightly lower housing starts (about 4% lower than 1999), led to a slight reduction in demand for feldspar in the U.S. in 2000. Domestic production of feldspar fell about 10% to 790,000 tons, while exports increased 13% to 11,400 compared to 1999. Imports increased 5% to 7,220 tons. Imports of nepheline syenite (a light-colored, silica-deficient feldspathic rock) also increased, up 13% to 356,000 tons. While production and consumption data were unavailable for nepheline syenite, declines were expected based on the softening end use markets. Like feldspar, nepheline syenite is used primarily in glass and construction-related ceramics (i.e., sanitaryware and tile).

Of the U.S. feldspar sold or used in 2000, 66% went into the manufacture of glass, including glass containers and glass fiber. Ceramics (including electrical insulators, sanitaryware, tableware and tile) and other uses, such as fillers, accounted for the remaining 34%. By the end of 2000, prices for ceramic-grade sodium feldspar, 170-250 mesh, had increased by about $3 per ton at both the lower and upper ends of the price range to about $67-80 per ton. Ceramic grade feldspar, 200 mesh, increased by about $7 per ton compared with the price earlier in the year to about $139 per ton. This was also a $34 increase per ton compared with the price in December 1999. Glass grade feldspar, 30 mesh, increased by about $8 per ton at the upper end of its range to $57 per ton.

Worldwide, Japan continues to produce the largest amount of feldspar, supplying over 28% of the world total of 9.3 million tons in 2000. Turkey is the world’s next largest supplier at 13%, followed by the U.S. at 8% and France at 6%. Overall, world production of feldspar increased 4% compared to 1999 levels.

Two trends are expected to negatively impact the demand for feldspar and nepheline syenite over the next several years: 1) the increasing use of plastic rather than glass containers and 2) the growing use of recycled glass in glass manufacturing. However, the ceramic markets should recover in the latter half of 2002, leading to greater demand in those areas.

Graphite

No graphite was mined in the U.S. in 2000, but domestic consumption of natural graphite increased by more than 20% to 41,800 tons. Imports increased 8% to 60,800 tons, with the majority coming from China (31%), Canada (23%), Mexico (23%), Japan (8%), Madagascar (7%) and Brazil (3%). The four major industries—refractories, brake linings, lubricants and foundries—for which natural graphite is used continued their dominance in graphite usage, accounting for half of the total graphite consumed. Prices for graphite generally remained unchanged during 2000.

World production of graphite in 2000 was estimated to be 602,000 tons, a slight (0.3%) increase from 1999. China maintained its position as the world’s leading graphite producer (36%), followed by India (23%), Brazil (9%), Mexico (5%) and the Czech Republic (4%).

Despite a weak refractory market and pricing pressure from Chinese material, advanced refining technology could bring a reversal of fortune to the graphite industry in the next few years. The advent of hybrid and electric vehicles is expected to bring increased demand for high-purity graphite in fuel cell and battery applications. Some predictions show that the demand for high-quality, high-carbon graphite could increase to more than 80,000-100,000 tons per year for fuel cell and battery applications alone.

Indium

U.S. production of primary indium in 2000 consisted of upgrading lower- and standard-grade indium (99.97% and 99.99%, respectively) into higher-purity metal. Indium can be refined to purities up to 99.99999%. All of the indium to be upgraded was imported. However, overall imports decreased 10% to 69.4 tons. The major importing countries included China (39%), Canada (28%), France (16%), Russia (7%), Peru (4%) and Japan (3%). Domestic consumption in 2000 was estimated at about 55 tons, a moderate increase from the 1999 level. Consumption in the various end uses held nearly steady, but semiconductor use increased. Thin-film coatings on glass, which included indium oxide and indium tin oxide, constituted almost half of the total domestic indium use in 2000.

Consumption of indium is expected to increase worldwide throughout this decade, especially for liquid crystal displays (LCDs), high-definition televisions, semiconductor materials, batteries and low-temperature solders for military and electronic applications. The main driving force for this increase is predicted to be Japanese production of LCDs using indium tin oxide and the production of telecommunications-use lasers, photo-diodes and other optic telecommunication systems using indium phosphide. However, a continued slump in sales and profit growth in the telecommunications industry could significantly decrease indium demand.

Lithium

Estimated domestic consumption of lithium has been stable at around 2800 tons since 1997. Ceramic and glass production and aluminum smelters were the largest consumers of lithium carbonate and lithium concentrates worldwide, representing an estimated 50% of the total lithium market. Chemetall Foote Corp., a subsidiary of the German company Chemetall GmbH, produced lithium carbonate from brines near Silver Peak, Nev. The company’s other lithium operations included a lithium hydroxide plant in Silver Peak, a butyllithium plant in New Johnsonville, Tenn., and facilities for producing downstream lithium compounds at the site of an idle spodumene deposit in Kings Mountain, N.C. FMC Corp., Lithium Division, produced a full range of downstream compounds, including lithium metal and organic lithium compounds, at its facilities in Bessemer City, N.C., and Bayport, Texas; and LithChem International, a subsidiary of ToxCo., Inc., both of Anaheim, Calif., produced lithium carbonate and lithium hydroxide at its facilities in Baltimore, Ohio. Imports of lithium compounds increased nearly 10% in 2000 to 15,415 tons, with the majority (88%) coming from Chile.

The health of the lithium industry remains closely tied to the performance of the primary aluminum, ceramics and glass industries. Changes in consumption of lithium in these industries determine the performance of the entire lithium industry. Because these uses represent such a high percentage of the total lithium market, growth in other areas has had a much smaller influence, although battery and catalyst applications are becoming more important.

Magnesium Compounds

Although U.S. production of magnesium compounds decreased in 2000, apparent consumption increased by about 7% to 933,000 tons. Production of dead-burned magnesia decreased by about 9% to 196,000 tons, mainly as a result of the closure of National Refractories and Minerals Corp.’s Moss Landing, Calif., plant, but imports increased by 28% to 501,000 tons. China (69%) and Australia (13%) were the principal source countries. Caustic-calcined magnesia production declined by about 4%, while net imports remained about the same. About 69% of the total consumption of magnesium compounds was for refractory applications. The remaining 31% was used in agricultural, chemical, environmental and other applications.

The largest magnesite production facilities in the world are in China, North Korea and Russia. Together, these three countries account for 68% of the world magnesite production capacity. Japan and the U.S. account for 54% of the world’s magnesium compounds production capacity from seawater or brines. World production capacity is estimated to be about 650,000 tons per year, with about 500,000 tons per year of capacity in China.

Foundry uses remained the largest application for olivine in the U.S., accounting for 87% of consumption of domestically produced material. Refractory applications accounted for 7% of U.S. consumption, and sandblasting and other abrasive uses accounted for 6%. Approximately 871 tons of olivine were exported in 2000, primarily to Argentina (42%), Venezuela (12%) and Brazil (11%). U.S. olivine imports totaled 202,000 tons, a 73% increase from 1999, with Norway (70%) and Poland (28%) the primary sources.

Norway is the world’s principal producer and supplier of olivine. Other producers include Australia, Italy, Japan, Mexico, Pakistan, Spain and the U.S.

A decline in steel demand coupled with high energy prices and increased levels of imports are likely to lead to a significantly reduced demand for refractory magnesia through the first half of 2002. Imports of magnesite, mainly from China, are expected to continue to supply much of the U.S. demand for magnesia for refractory applications. If material from North Korea becomes available on the U.S. market, it would probably provide an additional source of low-cost magnesia to U.S. refractories manufacturers at the expense of domestically produced material.

Soda Ash

The U.S. soda ash industry in 2000 consisted of six producers — American Soda, L.L.P.; FMC Wyoming Corp.; General Chemical (Soda Ash) Partners; IMC Chemical Co.; OCI Chemical Corp.; and Solvay Minerals Inc.—that mined sodium-carbonate-bearing deposits in California, Colorado and Wyoming. Production of natural soda ash was 10.2 million tons, which was virtually the same as that of 1999. In October 2000, the newest U.S. soda ash facility, operated by American Soda, L.L.P., began solution mining at an underground nahcolite deposit in the Piceance Creek Basin of Rio Blanco County in northwest Colorado. During its first year of production, the plant was scheduled to operate at a rate of about 545,000 tons per year. When fully operable, the facility will have a capacity of 900,000 tons per year of soda ash and about 135,000 tons per year of sodium bicarbonate.

U.S. apparent consumption of soda ash in 2000 was 6.43 million tons. Glass manufacturing represented about 50% of total consumption at 3.17 million tons, a reduction of about 3% compared to 1999. This is due primarily to the 3% reduction in container glass manufacturing in 2000. Glass containers accounted for 48% of glass consumption, while flat glass accounted for 36%, and specialty and fiberglass accounted for 8% each.

U.S. exports of soda ash rose 8% in 2000 to 3.9 million tons, with 44% going to Asia, 21% going to North America and South America (each), 4% going to Europe and the Middle East (each), 2% going to Africa and Oceania (each), and 1% going to Central America. Imports of soda ash decreased by 18% to 75,000 tons. The majority (99%) came from Canada, where General Chemical operated a synthetic soda ash plant in Amherstburg, Ontario. The remainder was imported from Bulgaria, Hong Kong, Italy, Japan, Mexico, Turkey and the UK.

In 2000, world soda ash production was estimated to be 34.2 million tons, which was a 3% increase over 1999. However, several plants were forced to close their doors due to the increasingly difficult manufacturing environment. Overcapacity, high energy costs and low profitability forced General Chemical to close its Amherstburg plant in April 2001. The company said it would reopen the 500,000-ton-per-year capacity plant when market conditions improved. Other casualties included IMC Chemicals’ synthetic soda ash plant in Duisburg, Germany, and Asahi Glass Co. Ltd.’s synthetic soda ash plant in Kitakyushu, Japan.

Because the glass container sector is the largest soda-ash-consuming sector, the demand for soda ash may decline as consumers slowly accept their food and beverages packaged in the newer polyethylene terephthalae (PET) containers. However, the outlook for the next five years is favorable. Domestic soda ash is expected to grow between 0.5 and 1.0% per year, and world demand is forecast to range from 2.0 to 2.5% per year for the next several years. Asia and South America remain the likeliest areas for increased soda ash consumption in the near future

Talc and Pyrophyllite

In 2000, domestic production of talc was 851,000 tons, the lowest since 1974. In the past 30 years, talc sales fluctuated between 792,000 tons in 1972 to a record high of 1.19 million tons in 1990. The variations in sales were generally in line with the ups and downs of the U.S. economy. Pyrophillite production data were unavailable but were also assumed to be slightly lower compared to 1999.

Approximately 831,000 tons of talc were sold or used in 2000, a 6% decrease compared to 1999. Of this amount, approximately 99,000 tons were exported. Approximately 270,000 tons of talc were imported—a 23% increase compared to 1999—but about 15,000 to 20,000 tons of that amount were processed and re-exported. As in 1999, the large tonnage increase in imports could not be absorbed in current markets, and about 35,000 to 45,000 tons were held in inventory.

Major domestic talc markets in 2000 were ceramics (28%), paint (21%), paper (20%) and roofing (8%). Domestic consumption of talc declined by 5% in 2000, as the slowdown of growth in the domestic economy affected sales in the last half of the year. Major markets for pyrophyllite were ceramics, refractories and paint, with ceramic and refractory uses accounting for more than 70% of domestic pyrophyllite sales.

Worldwide, China remained the leading producer of talc, followed by the U.S., India, Finland, France and Brazil. The Republic of Korea was the largest producer of pyrophyllite, followed by Japan and Brazil. China, Japan, the Republic of Korea, and the U.S. produced 61% of the world’s talc and pyrophyllite.

The slow economy is likely to result in further declines in talc demand in 2001 and at least the first half of 2002, as new housing units and new home construction decline. No major changes are expected in the pyrophyllite markets, and consumption probably will not change significantly for the next few years.

Figure 4. Zirconium production outside the U.S. by country, 2000.

Wollastonite

Domestic wollastonite production decreased from that of 1999, primarily because NYCO Minerals began supplying powder-grade wollastonite to some of its North American customers from its operation in Sonora, Mexico, instead of its New York operation. This change permitted the company’s New York operation to effectively increase its capacity for its higher value products and made better use of the company’s ore reserves. Total U.S. wollastonite production in 2000—including NYCO’s operations; an R.T. Vanderbilt Co. mine in Lewis County, N.Y.; and mines in Inyo, Kern and Riverside Counties in California—was estimated to be about 130,000 tons. Plastics comprised an estimated 37% of wollastonite sales, followed by ceramics (28%), metallurgical applications (10%), paint (10%), friction products (9%) and other applications (6%).

Worldwide production of wollastonite was estimated to be between 500,000 and 550,000 tons in 2000, with China supplying between 200,000-300,000 tons per year. Production for Finland, India and Mexico was estimated to be 20,000 tons, 100,000 tons and 75,000 tons, respectively.

The decline of the U.S. economy will continue to hamper domestic sales through at least the first half of 2002. Markets most likely to be affected include ceramics, metallurgy and paint. However, worldwide sales of wollastonite should increase slightly as more durable goods are required for growing populations.

Zirconium

Approximately 95% of all zirconium consumed is in the form of zircon, zirconium oxide or other zirconium chemicals. U.S. production of milled zircon increased slightly in 2000, up 1% to 56,200 tons, while production of zirconium oxide increased 34% to 22,900 tons. Zircon was used in refractory paints, refractory bricks and blocks for furnaces and hearths, and ceramic tile and sanitaryware. Zirconium oxide was used primarily as an opacifier and pigment in glazes and colors for ceramic products, while yttria stabilized zirconia (YSZ) was used in the manufacture of high-temperature, high-strength structural ceramics, among other end uses. U.S. exports of zirconium ore and concentrates increased 5% to 72,900 tons in 2000, while imports increased just over 12% to 65,200 tons.

In 2000, the increased demand for zircon concentrates resulted in an increase in price. The average value increased to $396 per ton, up 27% from 1999 levels of $311 per ton.

Excluding U.S. production, world production of zirconium mineral concentrates in 2000 was about 760,000 tons, a 1% increase from 1999. Australia and South Africa supplied about 82% of all production outside the U.S (see Figure 4).

Demand for zirconium is expected to grow by 3% worldwide over the next few years, and several new deposits are expected to come on-line, especially in the U.S. and Australia. Expansions in supply are expected in Mozambique and South Africa, and further exploration and development efforts are under way in Australia, Canada, India, Kenya, South Africa, the Ukraine and the U.S.

The foregoing report is based on information compiled from the U.S. Geological Survey (www.minerals.er.usgs.gov); Industrial Minerals (www.mineralnet.co.uk); Roskill Information Services Ltd. (www.roskill.co.uk); World Industrial Minerals (www.worldindustrialminerals.com); and supplier information. All units are in metric tons unless otherwise noted.

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