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In the short term, refractory demand will be negatively impacted by the effects of the global economic downturn that began in the latter half of 2008, with declining manufacturing activity and global trade pushing demand below 2007 levels in most countries. However, recovery is expected by 2012, restoring gains for the refractory industry. Longer-term growth will be supported by the increasing use of better performing, more expensive refractories.
China is the dominant consumer of refractories, with over 50% of the world market in 2007, due to the nation’s strong rise in industrial production. In 2007, the country manufactured 36% of the world’s steel, 49% of the world’s cement and 44% of world flat glass. In addition, China utilizes a higher rate of refractories per ton of steel than developed nations, due to its less efficient manufacturing processes. Over 80% of new demand in 2012 will be attributable to China.
Due primarily to China, Asia will continue to be the fastest-growing region in the world through 2012. While China will account for much of the region’s gains, India will exhibit advances above the world average as well. Eastern Europe will have solid growth prospects due to its rising steel production. Multinational manufacturers have shifted production of steel-consuming goods such as household appliances and motor vehicles to Eastern Europe, creating demand for steel. Opportunities will also exist in Latin America and the Africa/Mideast region.
Iron and steel production is by far the largest market for refractories. Advances in this market have benefitted from increased production in recent years compared to the late 1990s. However, the rate of refractory usage per ton of steel has continued to decline, holding back gains. This trend is expected to continue, adversely affecting the outlook for refractory suppliers.
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