Fused Magnesia Trends & Global Outlook Asım Bilge MagForum 2016, Vienna Kümaş Manyezit San. A.Ş.
Contents Fused Magnesia Global FM Market, Demand and Prices Effects of Global Economy Issues Kümaş FM Production Kümaş FM Products Refractory Grade Electrical Grade Conclusions and Outlook May 2016, Vienna 2
Fused Magnesia Fused magnesia (FM) is produced by electric arc melting of magnesite, CCM or DBM in a traditional Higgins furnace or in tilt-type furnace at >2850 C. Furnaces can be operated on both one-step or two-step processes depending on energy costs and supply. Magnesite is used in the one-step and CCM in the two-step process. FM is characterized by very large periclase crystals of more than 1,000μm (compared to 40-120μm for DBM) and a density approaching the 3.52 g/cm 3. Product Process Temperature Crystal Size Density ( C) (µm) (g/cm 3 ) CCM 700 1000 <0,5 - DBM 1500 2000 40-120 3,15 3,42 FM >2850 >800 > 3,48 May 2016, Vienna 3
2015 Global Production of FM Estimated global FM production was around 1,2 million tonnes in 2015. 2.40% 13.60% 84.00% China KÜMAŞ Others May 2016, Vienna 4
Cost of Fused Magnesia Production Raw Materials Energy Graphite Electrodes Labor Costs May 2016, Vienna 5
FM Prices 1300 1200 1100 1000 900 800 700 600 500 Average FM 97-98 Prices (USD/ton FOB China) Prices down by 40% in 5 years 400 2010 2011 2012 2013 2014 2015 2016 FM 97 FM 98 600 590 580 570 560 550 540 530 520 510 500 490 Average FM Prices 2015 (USD/ton FOB China) Source: Asian Metal May 2016, Vienna 6
Capacity utilization ratio and exports China FM Export Q1 Comparison (tonnes) Capacity Utilization of China FM Production (%) 80000 70000 60000 50000 40000 30000 20000 Q1 2016 exports up by 14% 30.0 25.0 20.0 15.0 10.0 5.0 Capacity usage 23% 10000 0 January February March Q1 Total 0.0 2015 2016 Source: Asian Metal May 2016, Vienna 7
500 400 300 China FM Exports (000t) 2015 exports down by 18% y-o-y FM Exports by Destination 2015 Other Countries 13% Russia 16% 200 100 India 3% Turkey 3% 0 38000 34000 30000 26000 22000 18000 14000 10000 2008 2009 2010 2011 2012 2013 2014 2015 China FM Exports 2015 Italy 6% Brazil 6% South Korea 11% Netherlands 11% USA 15% Japan 16% Source: Asian Metal May 2016, Vienna 8
Steel Production and China s Growth World Crude Steel Production (million tonnes) 16 China GDP Growth (annual %) 1700 1600 1500 1400 1300 1200 1100 1000 900 Q1 2016 steel output down by 3,6% y-o-y 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 14 12 10 8 6 4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: World Steel Association Source: World Bank Statistics May 2016, Vienna 9
April May June July August September October November December January February March April Prices ($/t) Inventory (000t) 750 Rebar Prices and Inventories (China) 2500 700 650 600 550 500 450 400 350 300? 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 2015 2016 prices Inventories Source: Bloomberg May 2016, Vienna 10
Higher quality FM demand increased FM producers are trying to find new methods like fluxing FM Trends Increasing use of fused minerals in cement&lime kiln refractories Special fused products for niche applications Magnezit Group plans to increase FM production capacity Companies purchases low priced FM and reducing its capacity May 2016, Vienna 11
KÜMAŞ Fused Magnesia May 2016, Vienna 12
Kümaş FM Plant 40.000 t/y FM Production Capacity 4 Arc Furnace with Power of 8 MVA Two-step Production Process Fused Oxychrome and Spinel Products May 2016, Vienna 13
Process Flow CCM Arc Fusion Slow Cooling FM May 2016, Vienna 14
Fusion Process State-of-the-art production facility CCM is smelted by arc furnaces with full automated system Energy intensive process Specific energy consumption is around 3000 4000 kwh/ton Safety issues must be considered May 2016, Vienna 15
Optical Sorting Fused ingots contain different grades of fused magnesia. It should be separated before using it. Optical sorters help to separate the materials with high capacity after crushing. With this technology Kümaş guarantees highest quality. May 2016, Vienna 16
Refractory Grade FM Kümaş refractory grade FM has low silica content, high lime/silica ratio, with high density. Kümaş FM is essential for high performance magnesiacarbon bricks. These MgO-C bricks are specially used at basic oxygen furnace (BOF) vessels, ladles and electric arc furnace (EAF) slag liners. May 2016, Vienna 17
Grades Chemical Composition (% wt) Density Crystal Size SiO 2 CaO Fe 2 O 3 Al 2 O 3 MgO (g/cm 3 ) (µm) KM FM 97,5 0,65 1,35 0,40 0,10 97,50 3,50 800-2000 KM FM 97 0,75 1,65 0,50 0,10 97,00 3,50 700-1700 KM FM 96,5 1,00 2,00 0,50 0,10 96,50 3,49 600-1500 KM FM 96 1,10 2,20 0,60 0,10 96,00 3,48 600-1500 KM FM 95C 2,00 2,50 0,70 0,10 94,70 3,30 300-500 SiO 2 CaO Fe 2 O 3 Al 2 O 3 MgO Cr 2 O 3 Density (g/cm 3 ) KM Oxychrome 1,00 1,00 12,00 8,00 58,00 20,00 3,70 May 2016, Vienna 18
Electrical Grade FM Kümaş fused magnesia is also used as an electrical insulating material in heating elements (brand name KuRes). Carbon, sulphur and iron oxide are particularly undesirable. Kümaş has the perfect raw magnesite for the production of electrical grade FM with very low iron oxide content for high temperature applications. May 2016, Vienna 19
Grades MgO Fe 2 O 3 Carbon Temp. Tap Density Surface Load % wt % wt ppm C g/cm 3 W/cm 2 KuRes H 11 97,00 0,20 50 900 2,42 9 KuRes H 01 96,50 0,20 50 850 2,42 7 KuRes M 21 96,00 0,30 80 750 2,42 6 KuRes M 02 95,65 0,30 80 650 2,42 5 KuRes L 31 95,30 0,40 100 500 2,42 4 KuRes L 03 95,00 0,40 100 450 2,42 1 May 2016, Vienna 20
Advantages of Kümaş Fused Magnesia High purity cryptocrystalline magnesite for CCM, Two-step process, Larger crystal size, Low iron oxide and impurities, No fluxing agents, Higher quality provides higher performance for refractory applications. May 2016, Vienna 21
Conclusions & Outlook Fierce price competition of Chinese FM products No expectations of a recovery in near future Demand will continue to increase for higher quality The future of FM is connected to the future of global steel industry May 2016, Vienna 22
Thank You May 2016, Vienna 23