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The global refractories market size was valued at USD 32.25 billion in 2021 and is projected to grow from USD 33.01 billion in 2022 to USD 44.82 billion by 2029, exhibiting a CAGR of 4.5% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with refractories experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 1.7% in 2020 as compared to 2019.
Refractory products are technically advanced ceramic materials that can withstand heavy thermal and mechanical abrasion and chemical corrosion at extreme temperatures. They convey an important, yet overlooked, role in the daily operations of almost every industry by providing mechanical strength, thermal insulation, and corrosion resistance. These products have been essential for various industries such as iron & steel, cement, glass, other metals, paper and pulp, and petrochemicals to develop key manufacturing processes.
These products are treated as consumables in some industries such as steel and other metals, wherein they are replaced time-to-time to maintain their performance. On the other hand, industries such as glass and cement consider their capital investments as they can perform their chore for up to 10 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. However, optimized application and designing of refractory products can reduce up to 20% of the operating expenses for the end-use industries. Furthermore, the manufacturing is non-toxic, and over 90% of the refractory materials are either recycled or reused, making them critical for the advancement of the various end-use industries.
Key players are focusing on expanding their production capacities in emerging markets. For instance, in November 2021, RHI Magnesita started the operation of its regional R&D center in India. The company has also invested around USD 53.5 million (INR 400 Crores) to expand its India production capacity of refractories. This development will help the company to expand its presence in the Asia Pacific.
The decline in End-Use Production Negatively Impacted the Consumption of Refractories
While refractory product manufacturing is considered an essential service, the supply of raw materials, such as binders and non-clay sand, has been impacted during the pandemic. Also, many companies saw a shortage of employees during the lockdowns, which slightly hindered the market's growth rate. Another factor that impacted the market was the slowing down in the production activities in the end-use industries. Cement and glass companies reduced production due to a slowing uptake from the automotive and construction industries. Also, non-ferrous metals and iron manufacturing were impacted due to mining activities experiencing shutdowns during the pandemic. However, the automotive, and construction industries are projected to indicate a strong recovery during the 2021-2022 period, and this trend is projected to be followed by the global refractory industry during the forecast period.
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Refractory Customization to Meet Consumer Demand to Foster Market Development
While these products have been utilized for a long time, a vital change being observed in the market is the development of refractory products from a combination of various materials. For instance, magnesia materials are combined with chromium oxide to form magnesia-chrome refractory. These products have high refractoriness and superior tolerance against chemical corrosion. Furthermore, unshaped products such as monolithic formed from aggregates, additives, and binders are in heavy demand from the steel and cement industries. They form a lining behind molds and templates, providing uniform temperature insulation across the kiln surface. Such unshaped products are increasingly being manufactured according to the requirement of the end-use industries. For example, 6K Additive announced a commercial launch of a new set of refractory metal powders, a special class of materials characterized by their high temperature and wear resistance, which proves suitable for manufacturing high-stress parts.
Increasing Consumption of Iron, Steel, and Glass by Automotive Industry to Drive the Market
The resurgence of the automotive industry in recent years, especially with the surge of EV, 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. In comparison, glass accounts for more than 6% of the vehicle's body weight. As the material is vital for producing these materials, their uptake from the steel and glass industry has surged to fulfill the demand from the automotive industry. Thus, the growth of the automotive industry is expected to drive the refractories market growth.
The automotive industry is looking for innovative ways to meet the future average fuel economy requirements, thereby the steel industry is continuously investing in advanced materials which have led to the introduction of a new variety of innovative steel for the automotive industry. The development of advanced high-strength steel (AHSS) has enabled the automotive industry to affordably meet the increasing regulatory requirements. Each year, new car models are introduced using lightweight, higher-strength steel components that provide a cost-effective answer to the demand for increased safety and fuel economy. Hence, the adoption of advanced steel by the automotive industry is surging the product demand.
Highly Carbon Intensive Manufacturing Process to Attract Environmental Concerns and Regulations
Manufacturing these products is a highly carbon-intensive process as it includes steps such as mining, baking, and curing refractory materials. Heavy amounts of CO2 and pollutants, such as carbon monoxide and volatile organic compounds, are released during the manufacturing process. These gasses are well known as greenhouse gasses, and the environmental agencies heavily regulate their release in the air. Furthermore, a high amount of energy is required during manufacturing, which further adds to its carbon intensity. As environmental health and safety concerns 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 market's growth potential.
Bricks & Shaped Segment to Hold Largest Share Due to Strong Demand from Key Industries
Based on form, the market is classified into bricks & shaped and monolithics & unshaped. Bricks & shaped segment accounts for the larger share in the market on account of 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 to meet the insulation ratings set by the customer. This factor is the primary reason for the larger share of the bricks and shaped segment 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 restrictions.
Low Cost to Lead the Clay Segment to Dominate the Market
Based on product, the refractories market is divided into clay and non-clay segments. The clay segment accounts for the larger share owing to its low cost compared to the non-clay segment. Fireclay bricks and insulation products are generally made up of clay materials and are heavily consumed by iron & steel products manufacturers. Furthermore, raw materials for the manufacturing of refractory clay products are more readily available, which further adds up to its domination in the market. Certain manufacturing processes are highly corrosive due to the presence of strong acids and bases, which drives the market for non-clay refractory products. They provide superior resistance to corrosion compared to their regular clay counterparts.
Backed by Large Demand, Basic Segment to Gain Market Share During the Forecast Period
Based on alkalinity, the market is categorized into acidic & neutral and basic. Magnesite, dolomite, and magnesia-chrome resist the chemical attack done by bases present in the manufacturing processes of products such as cement and ferrous metals. As the demand for these materials is expanding considerably, the demand is projected to expand significantly during the forecast period. On the other hand, silica, zirconia, and aluminosilicate provide resistance from corrosion due to the presence of acids in the manufacturing processes. The largest consumer of acidic refractory products is the iron and steel industry, wherein acids are used to treat minerals to obtain pure metallic products. However, a few manufacturing processes require refractories that are stable in both acidic and basic environments. Thus, neutral refractory products such as carbon and alumina are preferably employed in such processes. These factors shall drive the steady growth of the acidic & neutral segment.
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Wide Applications to Help Iron & Steel Industry Segment to Lead the Market
In terms of end-use industry, the market is segmented into iron & steel, non-ferrous metals, glass, cement, and others. Iron & steel industry holds the largest share in the global market on account of the application 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, thus resulting in heavy consumption from the iron and steel industry.
The development of glass melting technology mainly depends on the development and quality of refractory products. Selection of refractory is the most critical case for building a glass furnace as the furnace’s lifetime depends directly on refractory quality. Alumina Zirconia Silica (AZS) is the main structural refractory material for glass furnaces primarily since it is not easily wetted by the molten glass and has a low reaction with them. The rising glass industry as a result of switching to sustainable solutions from plastics is surging the demand for refractories.
Reliable refractory solutions play a vital role in increasing efficiency in the cement manufacturing process. Refractory bricks are used in rotary kilns in the cement industry. Monolithic refractory is used in portions of cement kilns, usually at the outlet, where wear rates are higher. Dense castables are used to line the cyclones in the pre-heater section of cement plants, owing to their complex shape and the wear resistance needed. The other applications are in the petrochemical, machinery, boiler, light industry, electric power, and military industry.
Asia Pacific Refractories Market Size, 2021 (USD Billion)
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The market size in Asia Pacific stood at USD 20.76 billion in 2021. Asia Pacific is expected to hold the largest share in the global market due to various end-use industries’ strong presence 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 factor is the most vital factor for the dominance of the Asia Pacific in the global marketplace. Furthermore, the prominent presence of cement and non-ferrous metal industries in the region further fuels the region's lead.
Meanwhile, the market in North America will show growth on account of increasing demand from the end-use industries present in the region, especially the iron & steel and glass industries. 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 in this market in Europe will mirror the growth of the steel industry present in the region.
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The market in Middle East & Africa is expected to be governed by the uptake of refractory products from the petroleum and petrochemical industry present in the region. These chemicals are highly reactive and thus require specialized refractory variants, thus providing high-value opportunities for the manufacturers operating in the region. Brazil and Mexico currently hold prominent cement and steel production positions, respectively. They are expected to climb up as the end-use industries further shift their focus on the region's emerging economies. Thus the market in Latin America is expected to show steady growth during the forecast period.
Key Market Players Aiming for Market Share with Acquisitions and Capacity Expansions
The refractories industry is fragmented with a large number of global & local players operating in the market. To obtain a competitive edge in the market, the players are continuously investing across the emerging and developed economies in terms of new product launches, strategic acquisition, production capacity addition, collaboration with distributors, and in many other ways. However, securing a larger production capacity to reach the maximum number of consumers and to cater to diversified applications is the main key strategy being adopted by most of the players in this industry. Players such as Intocast Group, Imerys, and Posco Chemical are significantly investing to strengthen their capabilities and enhance their market position.
An Infographic Representation of Refractories Market
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This refractories market research report provides both qualitative & quantitative insights on refractory across the world. Quantitative insights include market sizing in terms of value (USD billion) & volume (million tons) across each segment, sub-segment, and region profiled in the scope of the study. Also, it provides market analysis and growth rates of the segment, sub-segments, and key counties across each region. Qualitative insight covers the elaborative analysis of key market drivers, restraints, growth opportunities, and industry trends related to the market. The competitive landscape section covers detailed company profiling of the key players operating in the market.
Volume (Million Tons), Value (USD Billion)
By Form, Product, Alkalinity, End-Use Industry, and Geography
By End-Use Industry
Fortune Business Insights says that the global market size was USD 32.25 billion in 2021 and is projected to reach USD 44.82 billion by 2029.
The global market is expected to grow at a CAGR of 4.5% during the forecast period.
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 of the market.
Asia Pacific held the highest market share in 2021.
HarbinsonWalker International, Intocast Group, Imerys, Posco Chemical, and Saint-Gobain are the key players operating in the market.
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