Some quotes: "The upshot is that the situation has boosted prospects for and interest in magnesia projects and sources outside China, and given refractory recycling more impetus."
"O’Driscoll urged that the industry should consider 2017 be seen as a game-changing year, with 2018/19 to have continued tight supply and high prices, prolonged with closures owing to dynamite provision uncertainty, MEE inspections (environment and safety), and business practice audits."
"There is also the potential of a trend in the “transfer” of some Chinese production capacity overseas and/or Chinese suppliers setting up facilities overseas to supply China and world markets. "
- Mike O’Driscoll, Director, IMFORMED
Rainer Gaebel, Managing Director, Refratechnik Holding GmbH, Germany; Jürgen Mannshardt, Director Business Unit Magnesia, Lehmann&Voss&Co.KG; Michael Tsoukatos, Business Dev Manager Grecian Magnesite SA, Greece; Ted Dickson, Consultant, TAK Industrial Mineral Consultancy, UK; Rajah Jayendran, Snr VP, Head of Operations Europe 2, RHI Magnesita, Austria
Gaebel noted that it was a key moment in the market, where customers must be kept happy despite perhaps not enough raw material available, while R&D efforts must continue for planning in the long term for added value products. Raw material distribution channels are changing he said.Mannshardt warned of a future loss of raw material production capacity in China that will not be returning, and while he expected a further 1-2 years of disruption in the market owing to changes, he was confident that sufficient volumes would be available after that period.
Tsoukatos acknowledged the tight supply of high purity dead burned and fused magnesia and said that the industry needed to react to the situation, underlining the importance of new product development. He also forecast further mergers and acquisitions in the industry.Dickson pointed out that the primary magnesia consuming industries were actually performing well at present. He highlighted how many end users were over-reliant on Chinese magnesia supply and that a “new normal” would soon emerge whereby consumers would be wary of Chinese supply and will diversify their sources. He forecast a surge in innovation in refractory products that will indicate a step-change.
Jayendran remarked that in fact China has been building towards its present clampdown on pollution and illegal businesses for some time, and this should not have come as a surprise.
"It is expected that there will be more focus by Chinese producers to satisfy domestic demand rather than export markets." - Alison Saxby, Director, Roskill Information Services Ltd, & Ted Dickson, TAK Industrial Minerals Consultancy
KOR Price at posting:
2.6¢ Sentiment: Buy Disclosure: Held
(20min delay)