Imports for the mineral increased in both China and Guyana due to demand from steelmaking end-markets improving, boosting demand for refractory products.

Imports of refractory-grade calcined bauxite in the US increased almost 50% last year against 2016 volumes due to the improvement in the refractories sector following growth in steel output, according to customs data released by the United States Geological Survey (USGS).

US imports of refractory-grade calcined bauxite in 2017 reached 127,000 tonnes, or 47% above the previous year when the country took 86,500 tonnes, as per US Census Bureau figures.

China and Guyana were the two countries producing bauxite for export to the US. Some 56% of total US bauxite imports came from China (71,700 tonnes) while the rest (55,300 tonnes) came from Guyana.

Demand for material from both origin countries increased in 2017, with imports from China rising 34% year on year and imports from Guyana almost doubling its shipments, posting a 96% growth on an annual basis.

While small volumes of material originated from India (3,290 tonnes) and Brazil (547 tonnes) in 2016, no shipments were reported from either country last year.

Rising steel output across all producing regions in 2017 was a crucial factor behind boosting demand for products and driving revenues, major refractories producers, such as Vesuvius and RHI Magnesita, said.

Availability of bauxite is currently tight on the international market, following a series of restrictions at mining and processing facilities in China’s Shanxi province.

This led to an increase in prices for Chinese refractory-grade bauxite, which are still holding at strong levels.
Industrial Minerals assessed refractory-grade bauxite 85% at $450-460 per tonne fob Xingang as of March 22 assessment, up 62.5% from $270-290 per tonne assessed on March 23 of last year.

Refractory grade bauxite 86% held firm week on week at $470-480 per tonne, up 63.8% on an annual basis, while 87% refractory-grade bauxite was assessed at $490-500 per tonne up 58.4% from the same time last year.

Higher purity refractory-grade bauxite 88% stood at $500-520 per tonne as of March 22, up 47.8% on an annual basis.

ALAFAR (The Latin-American Association of Refractory Manufacturers) hosted the 15th UNITECR, which took place at the Centro Parque International Conference Center in Santiago de Chile from 26-29 September 2017.

Magnesite (MgCO3) is natural source for production of caustic calcined, dead burned and fused magnesia. Turkey’s magnesite sources have a well-known reputation internationally with high purity, crystocrystalline structure and suitability for refractory applications.

The rotary kiln in the most common system to incinerate hazardous waste. However, the many-sided kiln conditions make it difficult to find appropriate refractory materials, able to endure for long time.

Contract prices for andalusite have edged up by about 10% from last year’s levels, with widespread consumer demand further compounding limited availability of material.

The andalusite market is set to experience further tightness in 2018 with high consumer demand said to be exceeding available supply, driving contract prices for the year upwards.

Limited availability is expected to persist throughout 2018, following a shortage that became apparent last year, when production issues led to lower output in major andalusite-producing regions.

As a consequence of that, and of ongoing high activity in the refractory raw materials space, almost all market participants active in andalusite canvassed by Industrial Minerals claim current demand will not be covered with available supplies this year.

«I am fully booked, and I imagine others will be as well,» one supplier said.

He added that some quantities produced this year may be needed to cover any outstanding volumes from last year’s contracts. His expectation is to run at full capacity throughout most of this year.

«There are no free volumes out there for the taking. Large buyers made sure they contracted early on, and even small buyers should have all agreed their supplies,» a trader said.

A second trader added: «If you need material now, you’re not in a great position. It doesn’t matter if you pay more, there just isn’t enough material around at this stage.»

The above trader said that he kept receiving inquiries from new customers, but he was unable to meet their needs.
Driving demand for the mineral was an improved performance of refractories end markets, due to rising steel output, and a widespread shortage affecting several other refractory raw materials, such as bauxite and alumina.

Andalusite can be used as an alternative to calcined bauxite for some refractory applications. As Chinese bauxite output was slashed last year following government-led inspections and shutdowns, some consumers tried to move towards andalusite in search of volumes and better pricing conditions.

This brought about a peak in demand in the andalusite space – a market that is much smaller and stable compared with bauxite. Market participants claim it will take some time before the supply/demand situation returns to normal.

Shorter contracts, higher prices

While andalusite is normally contracted with long-term, annual agreements, in a number of cases this year contracts were shortened to six months. In other deals, volumes were agreed for the year, while price was fixed only for the first six months – leaving the possibility to review the price for the second half of the year.

Some large buyers reported they managed to set year-long contracts for volume and price.

«All factors were there to drive prices upwards this year, although we should bear in mind that any movement in andalusite is going to remain quite moderate,» a second supplier said. «You are not going to see a surge similar to what we saw in [refractory grade] magnesia.»

At the time of the UniteCR conference in Chile last September, sources in contact with Industrial Minerals were already suggesting price growth was in the offing once contracts came up for renewal.

Industrial Minerals assessed the price of andalusite, min. 57% Al2O3, at €260-320($320-393) per tonne fob South Africa for 2018 contracts, compared with €240-290 per tonne last year.

While on the delivered Europe market, new contract prices for andalusite, min. 57% Al2O3, increased to €390-430 per tonne cif Europe, from €355-425 per tonne a year ago.

Both market prices have shown a rise of about 10% on previous levels, which is in line with earlier forecasts from market participants, who had pointed to an appreciation ranging from a low of 5% – for those buying particularly large quantities or managing to secure preferential conditions – to a high end of 15% for smaller purchasers or new customers.

«Your 2018 price would also depend on what kind of price you had last year – if your 2017 price was on the low end of the range, the increase may be higher. If it was on the high end [of the price range], the increase would be small,» a third trader source said.

A third supplier added: «All my selling prices have gone up this year – by different amounts, of course.»

Some market sources suggested that currency volatility may also have an effect on market prices, considering that the US dollar is going through a particularly weak phase and the South African rand has appreciated strongly over the past few weeks. However, the timing and length of contractual patterns do not support this view – as all contracts set during the final quarter of last year and the early stages of this quarter would have locked in a price level for either six or 12 months ahead, thus excluding any currency exchange effect for the time being.

If any deals were to be updated in the second half, currency effects may be factored in at that point.