Tabular Alumina Market what are the prospects for growth by Martin.Z.Ma
Content Challenges for the Chinese refractory industry- New environmental regulations & changing customer needs Opportunity- Tabular alumina -an alternative raw material for alumina based refractory Outlook & Strategies:-What should we do
Refractory at a glimpse "non-metallic materials applicable for structures, or as components of systems, that are exposed to environments above 538 C Key facts of China s Refractory Market Refractory 2008 2009 2010 2011 2012 Products (10 6 t) Production 24.2 24.5 28.1 29.5 28.2 Exports 2.6 1.8 2.2 2.4 2.5 Imports 0.1 0.1 0.1 0.1 0.1 World Refractory Market Iron & Steel Cement Ceramics Glass Presenting issues: Sub-optimized efficiency Petrochemistry Non-ferrous metal Low industry concentration Limited pricing power over either supplier or customers. source:astm & Shengwan
China supplies about 75% of the world s refractory raw materials 5% 7% Out of its limited reserve: World's Magnesite Reserve 10% 21% 8% 26% 23% Raw material China s share (% ) Dead burned magnesia 45 Fused magnesia 90 Refractory bauxite 95 Silicon carbide 40 Brown fused alumina 50 China North Korea Russia Slovakia Brazil Australia Other Graphite 80 5% 15% 2% World's Graphite Reserve 78% China India Mexico Other 2% 3% 3% 3% 7% 8% 3% World's Bauxite Reserve 13% 9% 21% 28% China Australia vietnam Indonesia Guyana Other Guinea Brazil Jamacia India Greece source: Richard Flook CIMM2013
KPI of China s 12 th 5-year Plan on Resource & Environmental Protection Energy -16% cut in energy energy intensity -17% cut in carbon intensity -boost in non-fossil fuel energy sources to 11.4% of primary energy consumption Pollution -8% reduction target for sulphur dioxide & chemical oxygen demand -10% reduction target for ammonia nitrogen & nitrogen oxides Refractory 5-year Plan guided by Ministry of Industry and Information 20% cut in Energy Intensity 90% comprehensive utilization rate of raw material 50% recycling rate of disposed products 25% market share for top 10, 45% by 2020. Improving kiln thermal efficiency,adopting cleaner energy, promoting lean management. Increasing application of castable & unfired products Developing light-weighted, energy-saving, lowcarbon,long-lifecycle products. Developing new beneficiating process & synthesizing technology Encouraging peer-to-peer integration source: ACRI
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Statistics on Global Steel Industry 30-year world s crude steel production (Unit: Thousand Ton): 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 China Rest of the world China outran rest of the world in terms of CAGR: 9.39% vs 0.6% source: CISA
Short-Term Outlook on China s Steel Industry (Unit: million tons) 1000 500 0 2014 2015 2016 2017 2018 2019 2020 Supply & Demand close to peak. Dependence rate for imported Iron ore will decline Future M&A activities by leading domestic companies China's Apparent Consumption China's Steel Production source: CISA
Issues emerge after decades of fast development : Weak upstream Integration Excess Capacity Peer Cutthroat Competition Industry-wide Low Profit Margin Limited Product Portfolio Stagnating Demand National-wide haze pollution
Government s Response & Refractory s Opportunity Key goals of China 12 th 5-year Plan on Steel Industry Things Refractory producers need to focus Product portfolio update Energy efficiency Improvement & Pollution Control Industrial layout Optimization Upstream security Technology Innovation Concentration Improvement environment-friendly products that adapts to the more demanding condition required by advanced refining process, along with significantly reduced energy cost and disposal cost. Tailored customer service that creates win-win situation by maximizing both parties profitability. source: ACRI & CISA
Tabular Alumina in a nutshell High-purity ( 99.8%), well-sintered ( 1900 ) crystalline alpha alumina Its name derives from its plate-like or tablet-like crystal structure : Quick calcination results in small closed air pores ( 10 µm) contained inside alpha alumina crystal, enhancing its thermal shock resistance and spalling resistance. Additional Features: High refractoriness ( 1800 ) Excellent thermo-mechanical properties High volume stability High density, low permeability High chemical resistance High mechanical stability Application: Refractory use for a variety of Industries including steel, foundry, cement, glass, petrochemical, ceramic and waste incineration.
Tabular alumina application breakdown in refractory for iron & steel ASC brick, Al-Mag-C brick Al-C brick, ASC mortar Corundum-Spinel castable & precast in RH Non-chrome solution. Low-cement castable, High-al precast brick Al-C nozzle, Corundum-spinel nozzle, Al-C slide gate ASC Brick,Al-Mag precast Al-Spinel precast Mag-Al unfired brick Al-Mag unfired brick Al-Spinel fired product
Tabular alumina (TA) VS White fused alumina (WFA) --- a close yet differentiated comparison Both feature both alumina purity (>99%), and share similar chemical composition α-al 2 O 3 being the primary crystalline phase. In-depth study reveals fundamental differences : TA WFA Porosity, crystal size & Bulk density Homogeneity Heterogeneity Impurity(Na 2 O) distribution Homogeneity Heterogeneity Energy cost & Environmental implication Modest Less competitive WFA TA
Close look-up: TA: Continuous production to ensure consistency & stability of product micro-structural characteristics. Uniformly distributed Na 2 O. WFA: Differentiated cooling rate causing inconsistency from inside out. Na 2 O accumulation in finer particles. Conclusion: TA demonstrates better slag resistance & casting property.
TA: moderate energy intensity. I.e. 70m 3 /ton 2.20 10 9 J/ton. Nature gas - economically viable, high thermal efficiency, less CO 2 emission, government s support. WFA: High electricity consumption. I.e. 1700kw h/ton 6.12 10 9 J/ton Increased electricity cost for business & industry sections as a result of Government s effort to restain coal consumption. High CO 2 emission due to the consumption of graphite electrode Conclusion: TA benefits from lower energy cost & better environmental implication.
Outlook Fused Alumina (FA) industry oversupplied by more than 3 million tons/year FA facing increasing cost & environment regulation Demand for TA further supported by prevailing refractory total solution.
Strategies Enriching Product Portfolio & Application Areas Providing value-adding services by working closely with customers. Cost control & Vertical Integration To sum up: 未雨绸缪, wèi yǔ chóu móu, repair the house before it rains 因势利导 yīn shì lì dǎo Divert a favorable turn of events to one s advantage.
Profile Martin.Z.Ma received his BASc in Honor & MASc from University of British Columbia (Vancouver, Canada), both in Electrical & Computer Engineering. He has been with Zili Corp since 2010, and currently holds the position of executive director for new business development.