El pasado día 25 de octubre tuvo lugar en la sede de ANFRE en Madrid la Junta Directiva y las reuniones de los comités Técnico y de Montadores.

En estas últimas reuniones del año se han tratado tanto temas internos de ANFRE como temas del sector del Refractario que preocupan e interesan a todos.

Un punto bastante importante dentro de las reuniones ha sido el Curso de Montadores que tendrá lugar en Bilbao del 20 al 24 de Noviembre. Se están dando las últimas pinceladas a este gran proyecto en el que se encuentra inmerso ANFRE.  Desde aquí queremos agradecer la colaboración de todas y cada una de las empresas involucradas.

En esta ocasión hemos contado con la participación de dos compañeros de la empresa Abaltex, Juan Marcet y Raquel Rodríguez, asociados nuestros desde hace algún tiempo pero que por motivos de agenda no podían asistir a las reuniones. Os damos la bienvenida y esperamos poder seguir contando con vosotros.

Una vez finalizadas las reuniones pudimos disfrutar, ya de una manera más relajada, de la buena compañía en la comida ofrecida por ANFRE.

Una vez más daros las gracias a todos por vuestra asistencia a las reuniones.

Os esperamos en Febrero!

The prospect of China’s magnesite mining sector coming under state ownership accompanied by consolidation of major players into one entity is looking increasingly likely to come to fruition this year.

The Huaziyu magnesite mine, Haicheng, the second largest magnesite mine in Liaoning province. This magnesite source and others like it are soon to be part of one huge part state-owned entity, China Magnesite Mining Co. Ltd, in an effort to modernise and stabilise the Chinese magnesite industry.

Further to our recent report on Chinese mineral supply shortages (see Newsfile 28 July 2017: China minerals supply squeeze: hangover to 2018 likely), on Monday 31 July, the State Owned Assets Supervision and Administration (SASAC) of Haicheng, Liaoning announced plans to establish China Magnesite Mining Co. Ltd.

According to Adam Zhang of the Northeast Asia Non-metallic Materials Exchange, “This is a major matter for China’s refractory industry, since it is expected to control 80% of the national production”.

China Magnesite Mining Co. will be 51% owned by Haicheng Magnesite Factory (owned by SASAC Haicheng). The remaining 49% will belong to other partner companies which appear to still be in the process of pledging their participation.

Among those confirmed, include Haicheng Linli Mining Co. Ltd (wholly owned subsidiary of Puyang Refractories Group Co. Ltd) and Beijing LIRR High Temperature Materials Co. Ltd.

With a reported total registered capital of RMB2bn, China Magnesite Mining is aimed at accelerating the effective integration of magnesite mineral resources in Haicheng, encouraging green, intensive, efficient and sustainable development, as well as enhancing the magnesite industry’s dominance in domestic and overseas markets.

“In the past, due to dispersion of magnesite mining rights, irregular mining, some environmental problems in magnesia processing enterprises, the price of magnesite and magnesia has been at a relatively low level in recent years.” said Zhang.

It is hoped that if China Magnesite Mining succeeds, it will effectively change China’s traditional magnesite resources supply scene, stabilise magnesia raw materials supply and demand expectations, and promote the development of the entire supply chain of refractories.

Whether this new organisation concludes before or after the 19th National Congress in October is unclear, as are other aspects of the general situation regarding changes in China’s mineral supply sector.

What is clear is that:

1. Environmental inspection teams are due to return to Liaoning in August, and processing facilities are unlikely to re-open unless they meet MEP standards.

2. Mineral supply shortages, as a result of 1. and ongoing mining explosives control will continue: for fused minerals, such as fused magnesia and fused alumina, there is an additional reported problem of an acute shortage of graphite electrodes, with a consequent price increase of 400% to 500+%. (learn the latest trends in graphite supply at Graphite Supply Chain 2017, 5-7 November, Newport Beach.)

3. There is a definite move to state control and consolidation of China’s magnesite sector.

The French calcined alumina and ATH producer will raise its products’ prices at the end of Q3, citing increasing raw material costs as the reason.

Alteo will be increasing its speciality alumina products prices due to rising raw material costs with effect from 1 September, the France-based company said.

«Alumina production has suffered over the past months from significant cost increases which cannot be absorbed anymore,» said Alteo on 13 July.

The company told IM that production has been impacted by higher freight rates, bauxite, caustic soda and energy prices.

In 2017, the average natural gas prices were €15-16/MWh, up 29% compared to €12/MWh in 2016, Alteo cited.
The rising freight rate has also added to the production cost. According to Baltic dry index, the shipping rate for bulk cargo was $1,000/tonne in June, up $400/tonne compared to $600/tonne in January 2016, the company cited.

Alumina is a key raw material and prices have increased since September 2016. According to IM’s sister publication Metal Bulletin, the benchmark alumina index was last calculated at $307.75/tonne on a FOB Australia basis 13 July. Although the value of alumina has fallen compared to the peak of $347.78 at the beginning of this year, it is still up 22.5% or $69.50 year-on-year compared to the prices on 22 July 2016.

«In a very tight market environment, Alteo will raise prices on its whole product portfolio. Price increases will depend on markets and products and will apply on products shipped as of September 1st,» the company added.

Alteo did not indicate how much it will raise on existing contracts stating only that the increase would likely be «significant» and that it will address each contract on a case-by-case basis.

Furthermore, Alteo indicated that demand has been high and «most of the customers globally asked for more material than anticipated.»

Calcined alumina and aluminium tryhydroxides are Alteo’s key products in its portfolio and the company supplies the ceramic and refractory industries as well as special glass, catalyst, fillers, polishing and flame retardant industries globally. Alteo’s facility in Gardanne, France has a production capacity of 635,000tpa.

Alteo’s strategy is to focus on speciality alumina products and the company will aim to reduce sales of wet hydrate (ATH).

Alteo alumina plant in Gardanne is an independent speciality alumina producer with HIG Capital as one of its shareholders.

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 ban on the use of dynamite in China is severely restricting the output of magnesia and other minerals, and the lack of clarity over when the restrictions may be lifted is spreading uncertainty in the market.

Uncertainty surrounding the ban on the use of dynamite in China is one of the main factors affecting the output of source material ores this year, delegates heard at the MagMin 2017 conference in Dalian, China, last week.

The use of dynamite in China is restricted not just for magnesia, but for other minerals and industries as well.

Rumours had been circulating in the market that the ban would be lifted in June, but it currently remains in place.

«We heard that the dynamite release [of the ban] may happen in October after the election ends,» a market source told IM.

This was echoed by other sources, but no one was sure about it, and the government has not provided clarity on the matter.

«If [the] dynamite problem continues then what the government promised at the seminar about the [magnesia] supply shortage [not lasting long], may not happen, because without dynamite, source material of magnesite won’t be enough,» Weishun Sun, Engineer, Mineral Product Research Department, Anshan Industrial Institute, said.

«Magnesia and refractory production will soon stop once again, though they just restarted production recently after the environmental inspection team was gone,» he added.

Drilling for magnesite

«You can’t imagine what we are doing without dynamite when mining magnesite,» one producer in Haicheng said.

«We use an electric drill, either manually or with a machine. Either way it is far slower than dynamite. It can’t last long, and it is not a solution at all.»

«Yes, we can produce, but without dynamite the output will be much smaller,» the producer added. During a field trip to Dashiqiao, delegates heard that the dynamite ban had just been lifted there in mid-July. One worker at Yonghong Magnesite Mine said they can now use dynamite but he was not sure about the situation in Haicheng.

«Comparing with Haicheng’s big magnesite mine with 1-1.5m tpa, here our capacity is only around 150,000 tpa, and this is already the biggest in Dashiqiao. It is clearly not enough for local producers to use,» he said. «Usually mining companies have an inventory of about 200,000-500,000 tonnes of magnesite so buyers can still get some.

But it cannot continue if dynamit.