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The global refractories market size accounted for USD 32.06 billion in 2019 and is projected to reach USD 42.30 billion by 2027, exhibiting a CAGR of 3.6% during the forecast period.
Refractories are advanced ceramic materials that can withstand heavy thermal and mechanical abrasion along with chemical corrosion at extreme temperatures. Refractory products convey an important, yet overlooked role in the daily operations of almost every industry by providing mechanical strength, thermal insulation, and resistance to corrosion. Refractory products are essential for several industries, including metals, cement, glass, paper & pulp, and petrochemicals for the development of key manufacturing and support processes. Thus, manufacturers operating in the market supply these industries with refractory products with customized shapes and specifications to meet their demand.
They are categorized as consumables in some industries such as steel and other metals, as they are to be replaced time-to-time to maintain their performance. On the other hand, industries such as glass and cement consider them as a capital investment as they can perform their chore for up to ten years. According to the World Refractory Association, the cost of refractory products accounts for less than 3%, and often even below 1% of the manufactured products but optimized application and designing of refractory products can reduce up to 20% of the operating expenses for the end-use industries. Furthermore, the manufacturing processes of refractories are non-toxic and over 90% of the refractory materials are either recycled or reused, making them critical for the advancements in various end-use industries.
The following market is expected to decline considerably in 2020 due to Covid-19 impact and hence the CAGR between 2020 and 2027 is higher than expected.
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Customization of Products to Meet the Consumer Demand
While refractories have been utilized since long, a vital change being observed in the market is the development of refractory products from combinations of various materials. For instance, magnesia materials are combined with chromium oxide to form magnesia-chrome refractories which have high refractoriness and superior tolerance against chemical corrosion. Furthermore, unshaped variants such as monolithic formed of aggregates, additives, and binders are in heavy demand from steel and cement industries as they form a lining behind molds and templates, providing uniform temperature insulation across the kiln surface. Such unshaped products are manufactured according to the requirement of the end-use industries and are expected to create growth opportunities for the market.
Increase in Demand for Iron & Steel and Glass from Automotive Manufacturers
The resurgence of the automotive industry in recent years has provided traction for vehicle manufacturing materials, including steel, iron, and glass. According to a joint report by the International Organization of Motor Vehicle Manufacturers and World Steel Association, steel-based products account for 60% of the vehicle’s body structure, while glass accounts for more than 6% of the vehicle body weight. As these are vital for the production of these materials, their uptake from the steel and glass industry has risen to fulfill the demands of the automotive industry. Thus, the growth of the automotive industry is expected to drive the product demand during the forecast period.
Focus on Infrastructure Development From Developing Countries Providing Growth Pathway for the Market
The rising population, especially in developing countries such as China, India, and Brazil, has encouraged governments to focus on infrastructure development for provisioning safe housing and related facilities. Such development has increased the uptake of products such as cement, glass, steel, and other non-metallic minerals. These products require refractories during the manufacturing process, which are heat-intensive in nature. Thus, as the demand for these products is projected to expand in the near future, the refractories market growth is expected to mirror this swelling demand.
Manufacturing Process of Refractories is Highly Carbon Intensive, Attracting Environmental Concerns and Regulations
Manufacturing of these products is a highly carbon-intensive process as it includes steps such as mining, baking, and curing of refractory materials. Heavy amounts of CO2, along with pollutants such as carbon monoxide and volatile organic compounds, are released during the manufacturing process. These gases are well known as greenhouse gases and their release in the air is heavily regulated by the environmental agencies. Furthermore, a high amount of energy is required during the manufacture of refractories, which further adds to its carbon intensity. As the concerns regarding environmental health and safety are in sharp focus, the refractory manufacturers are compelled to reduce their carbon intensity, resulting in lower margins. As the market is already highly competitive, such restrictions restrain the growth of the market.
Bricks & Shaped Segment to Hold Largest Share in the Market throughout the Forecast Period
Based on form, the market is classified into bricks & shaped and monolithics & unshaped. The bricks & shaped segment accounts for the larger share in the market on account of the heavy requirements of such products from the metal and non-metal industries. Bricks are required to form the insulation layer inside the ovens and kilns, and are replaced periodically in order to meet the insulation ratings set by the customer. This factor is the primary reason why this segment accounts for a larger share in the market.
On the other hand, the monolithics & unshaped segment is expected to gain market share during the forecast period owing to higher demand to form linings inside the reactors wherein positioning of shaped refractories is restricted due to space limitations.
Clay Segment Accounts for a Dominant Share in the Market
Based on product, the market is divided into clay and non-clay segments. Clay segment accounts for the dominant share owing to its low cost as compared to the non-clay segment. Fireclay bricks and insulation products are generally made up of clay materials and are heavily consumed by the iron & steel products manufacturers. Furthermore, raw materials for the manufacturing of clay variants are more readily available, which further adds up to its domination in the market.
Certain manufacturing processes are highly corrosive due to the use of strong acids and bases. This factor has a huge influence on the market for non-clay segments, as these products provide superior resistance to corrosion as compared to their regular clay counterparts.
Basic Segment to Register Faster Growth During the Forecast Period
Based on alkalinity, the market is categorized into the acidic & neutral and basic segments. Basic segments such as magnesite, dolomite, and magnesia-chrome provide resistance from external chemical attacks done by bases present in the manufacturing processes of products such as cement and ferrous metals. As the demand for these materials is expanding at a considerable rate, the demand for basic products is projected to expand significantly during the forecast period.
On the other hand, acidic products such as silica, zirconia, and aluminosilicate provide resistance from corrosion due to the presence of acids in the manufacturing processes. The largest consumer of the acidic refractories is the iron and steel industry, wherein acids are used in the treatment of minerals to obtain pure metallic products. However, a few manufacturing processes require products which are stable in both acidic and basic environments. Thus, neutral products such as carbon and alumina are preferably used in such processes. These factors shall drive the steady growth of the acidic & neutral segment.
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Iron & Steel Industry Holds the Largest Share in the Global Market
In terms of end-use industry, the market is segmented into iron & steel, non-ferrous metals, glass, cement, and others. The iron & steel industry holds the largest share in the global market on account of the application of refractories in almost all furnaces, reactors, and vessels used during steel manufacturing. Moreover, the refractory lining is replaced periodically, every 30 minutes to two days, in the various steps of the steel manufacturing process; a factor thatresults in such heavy consumption from the iron and steel industry.
Though frequent replacement of this product is not required in the glass industry as compared to the iron & steel industry, the demand for this product is growing on account of the mounting requirement of glass products from various downstream industries such as automotive, construction, energy, and chemicals.
Asia Pacific Refractories Market Size, 2019 (USD Million)
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The market size in Asia Pacific stood at USD 20,444.9 million in 2019. Asia Pacific is expected to lead hold the refractories market share owing to the strong presence of various end-use industries in the region. According to the World Steel Association, Asia Pacific accounts for more than 70% of global steel production, with China alone accounting for about 50% of the global steel production. This is the most vital factor for the dominance of the Asia Pacific in the global marketplace. Furthermore, the presence of prominent cement and non-ferrous metal industries in the region further fuels to the lead of the region.
The market in North America will show considerable growth on account of increasing demand from the end-use industries present in the region, especially iron & steel and glass industries. Furthermore, the increasing demand for the product for application in the aerospace industry is expected to drive the growth of the market in the region. The market in Europe will show very slow growth, which is expected to be rejuvenated by the growing demand for steel and glass from the automotive manufacturers present in the region. Europe holds about 15% of the global steel production, and thus the growth of the market in Europe will mirror the growth of the steel industry present in the region.
The market in the Middle East & Africa is expected to be governed by uptake from the petroleum and petrochemical industry present in the region. These chemicals are highly reactive and thus require specialized products, thus providing high-value opportunities for the manufacturers operating in the region.
In South America, Brazil and Mexico (Latin America) currently hold prominent positions in cement and steel production respectively and are expected to climb up as the end-use industries further shift their focus on the emerging economies of the region. Thus, the market in Latin America is expected to show steady growth during the forecast period.
Major Market Players Opting For Acquisitions and Capacity Expansions to Maintain Their Position In the Market
The global market is semi-consolidated market with the top 25 companies claiming around 50% share in the market. The key players present in the market have opted for strategies such as acquisition and capacity expansion in order to consolidate their position in the global market.
Furthermore, market players have invested a large number of resources on the development of novel refractory products and their manufacturing processes. This trend is expected to impact the global market positively over the forecast period.
The refractories market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, forms, and leading end-use industries. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
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Volume (Kilo Tons), Value (USD Million)
By End-Use Industry
Fortune Business Insights says that the global market size was USD 32.06 billion in 2019 and is projected to reach USD 42.30 billion by 2027.
In 2019, the market value stood at USD 32.06 billion.
Growing at a CAGR of 3.6%, the market will exhibit rapid growth in the forecast period (2020-2027).
Iron & steel segment is expected to be the leading segment in this market during the forecast period.
Increase in demand for metals and glass from various end-use industries is the key driving factor for this market
Asia Pacific held the highest market share in 2019.
Growth in the cement industry across the globe and increasing demand for metals, glass, and other construction materials are the key factors driving the adoption of refractories. Furthermore, energy savings provided by these products shall be the vital factor further driving the growth of the market.
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