The Henan government has ramped up efforts to combat pollution by implementing yet more shutdowns of brown fused alumina production later this year. This is set to cause more global supply disruptions since output was already intermittent in recent months.

The government of Henan province in China will enforce large-scale brown fused alumina production stoppages from November 2017 – March 2018 in a bid to cut down pollution levels in the region, according to official documentation.

China is one of the biggest fused alumina producers in the world and Henan is a key fused alumina producing region.

Further output cuts will severely impact exports to the refractories and abrasive sectors globally, since production was already intermittent due to the past months of anti-pollution checks, market participants told IM.

According to the provincial capital Zhengzhou government, the province must meet the target of the environmental plan, it announced on 28 September.

Under the plan, the average concentration of particulate matter (PM2.5) between October 2017 and March 2018 must fall by 20% year-on-year, and the number of severe pollution days must also reduce by 15%.

By end of October, all steel and cement producers must complete their paperwork for emission licenses, while copper, zinc, lead smelters, aluminium, pharmaceutical and pesticide producers must obtain their licences by December 2017.

Companies releasing pollutants without licenses will be prosecuted, according to Zhengzhou government.
In a separate notice seen by IM, a list of 51 brown fused alumina producers across Zhengzhou, Jiaozuo, Luoyang,
Sanmenxia, Jiyuan, Gongyi and Lankao have been compelled by the government authority to shut down for a set period of time, between 15 November and 15 March 2018.

While it is not a blanket ban to all producers to shut down production in the next four months, 42 on the list are allowed to produce for one month in January 2018, while five have ceased operation indefinitely.

It is unclear when the environmental restrictions will end, but many market participants within and outside China believe that many small fused alumina producers will not survive this wave of checks. As a result, the total output in China could potentially drop in 2017.

The recent global economic difficulties have resulted in overcapacities in many industries and the refractory industry isn’t an exception. In an uncertain environment driven by the slowing Chinese economy and the low crude oil price many industries have slowed down their investments.

A shortage of graphite electrodes for usage in electric arc and ladle furnaces will continue to affect steel mills, sources told S&P Global Platts.

In recent years electrode makers have reduced capacity, with some shuttered for good as their mill customers bought competitively priced semi-finished products and re-rolled rather than melting scrap.

One supplier, who did not want to be identified, said around 200,000 mt/year of electrode capacity had exited the market as a result. At the same time China has cut graphite electrode capacity of late, by up to around 50%, according to numerous producers, amid government-mandated closures to curb emissions.

The supplier said Chinese annual electrode exports would likely fall from around 200,000 mt in recent years to 100,000 mt. This means the country is producing much fewer ladle furnace electrodes.

In previous years China had been so cheap other suppliers had bowed out of the market; companies would have to charge around double or triple for a ladle furnace compared to an electrode for EAF consumption to generate the same EBITDA, another supplier who did not want to be identified said, so they may reserve some volume, but prices will rise dramatically.

Chinese electrode capacity is also increasing at the moment, aided by exceptionally cheap scrap supply after Beijing oversaw the closure of all illegal induction furnaces by the end of June. Also, during the «bad years» electrode producers ran down their stocks to generate cash as they could not get credit lines, sellers agreed. This means there is no stock on the ground and demand from mills — particularly EAFs — has increased sharply, taking electrode suppliers by surprise.

Producers cannot increase electrode production capacity, however, as there is a shortage of needle coke, a primary raw material — this is being exacerbated by cokemakers selling into other markets, such as the lithium-ion sector, after the downturn in demand from electrode producers.

Given these factors, electrode prices are rocketing. Long-term agreements for next year are likely to rise 100% or more, with «transactional» buyers paying more than those on longer-contracts, sellers said. «Everyone wants to be a long-term customer now,» one seller said.

Another producer said mills were «screaming» for electrodes, but they had to get in line. There was a real threat of «rolling outages,» he said, as mills ran out of electrodes and had to await new deliveries.

Mills were using scrapped or questionable electrodes to stay in operation, he said. It takes six-10 weeks to make an electrode, he said, while it takes six-eight hours to use one.

Electric arc furnaces will typically operate nine graphite electrodes at any one time, and they comprise 1-2% of the cost of steelmaking, according to electrode sellers. A recent spot deal in China had been done at $11,000/mt for a 24 inch electrode, he said, while another supplier said spot prices were $10,000/mt — far higher than the contract prices being paid by mills, with Chinese material now trading at a premium to electrodes from elsewhere as people scrambled for tons.

A large Chinese producer was putting out weekly prices that were being followed by others, sources said. «We haven’t even started our booking process for next year, and some competitors are already sold out through the first half,» one said. Sellers were torn on electrode pricing dynamics going forward.

While half-yearly and quarterly deals are seen, with deliveries monthly or quarterly depending on customer, the majority of contracts are annual. Some suppliers said they would not look to short-term profitability above longer-term deals, but others said they «hated» annual fixed priced agreements, which meant they were taking the majority of risk on behalf of mills.

This, alongside some coke suppliers looking to move to quarterly pricing from annual, could lead to an attempted shift to shorter-term electrode pricing, one said.

In the steelmaking industry and in many others that involve the processing of molten metal, the metallurgical vessels can be lined with refractory bricks, with or without mortar…

Del 20 al 24 de noviembre tuvo lugar en Bilbao la primera edición del Curso de Ingeniería de Refractarios Anfre, es el primer curso impartido íntegramente por asociados de ANFRE. Esta primera edición del curso ha contado con alumnos pertenecientes a empresas asociadas a Anfre, ya que desde Anfre queríamos que fueran ellos los primeros en poder beneficiarse de este curso. El resultado total ha sido un gran éxito, tanto de aforo como de acogida del curso.

Es un curso en el que se ha combinado a la perfección las clases teóricas y las visitas a distintas empresas de interés para el sector, dichas visitas han servido para dar una visión más real del mundo del refractario, se han visitado las siguientes empresas:

• Sidenor
• Azterlan
• Krosaki – AMR Refractarios.

Agradecer enormemente a las tres empresas el tiempo que  nos han dedicado y recordarles que pueden contar con nosotros siempre que  nos necesiten.

Los temas  que se han tratado han sido los siguientes:

• Materiales refractarios
• Introducción al Diseño de Revestimientos
• Aplicación de Refractarios
• Secado, calentamiento y enfriamiento
• Seguridad y Control de Calidad.

Todos estos temas han sido preparados y presentados por empresas asociadas de ANFRE.

Desde Anfre  queremos dar las gracias una vez más a las siguientes empresas, sin ellas el curso no hubiera sido posible:

• Sociedad Española de Cerámica y Vidrio
• Insertec
• Arciresa
• Morgan Advanced Materials
• Deguisa
• Dominion Global S.A
• Teide Refractory Solutions
• Calderys Ibérica Refractarios S.A
• Técnicas de Refractarios S.A.U
• Reyma, Materiales Refractarios
• Gerfor S.A
• Refractarios Alfran S.A
• Prevencoor

Por último desde Anfre queremos hacer una mención especial a Dolores Cagigas, Javier Trujillano y Roberto Caballero, creadores y artífices de este curso. Sin ellos el resultado no hubiera sido el mismo.

Igualmente agradecer la disponibilidad absoluta de nuestro Presidente, Carlos Briz Iceta.

Nos vemos en el siguiente curso!!!