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The Saudi Arabia refractories market size was valued at USD 160.2 million in 2021. The market is projected to grow from USD 164.8 million in 2022 to USD 254.6 million by 2029, exhibiting a CAGR of 6.4% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with the refractories market in Saudi Arabia experiencing lower-than-anticipated demand across the country compared to pre-pandemic levels. Based on our analysis, the Saudi Arabia refractories market exhibited a decline of 4.9% in 2020 as compared to 2019.
Refractory materials offer higher temperature, abrasion & chemical resistance, which make them an ideal choice for industrial operations such as steel, glass, and cement manufacturing. With the rising demand for steel & glass from the construction & automotive industries, the refractory industry is projected to indicate considerable growth in Saudi Arabia. Also, in line with technological advancement at the global level, the KSA-based manufacturers are expected to adopt the latest refractory manufacturing practices in the near future. This factor could curb environmental concerns and drive the Saudi Arabia refractories market growth during the forecast period.
Decline in Production Across End-use Sectors Dented Growth Prospects During Pandemic
Iron, steel, and non-ferrous metal manufacturers widely consume refractory bricks during the manufacturing process. However, the staggering effect of COVID-19 on the construction & automotive industries meant steel, non-ferrous metals, glass, and other essential materials experienced lower demand. Both local manufacturers and importers faced complications due to the disrupted global supply chain.
Saudi Arabia is considerably reliant on imports to fulfill the local refractories demand. Thus, the domestic demand across Saudi Arabia was significantly impacted due to supply chain disruption, shortage of raw material & inventory, short-term production halt, economic slowdown, trade restrictions, changing consumer behavior in response to the COVID-19 outbreak, and other reasons. Due to supply chain disruption across the country, in 2020, the market's year-on-year growth rate was considerably dropped compared to 2019. However, the local end-use industries revamped their operations slowly between 2021 and 2022. Thus, the overall market showed a slower but steady recovery during this period.
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Improving Steel Production to Emerge as a Key Trend
The KSA government is focusing on developing local manufacturing industries to lower the dependency on imports. The steel industry is one of the largest industries in the country, with more than 41 players operating and possessing a total annual production capacity of more than 18 million tons. Under Vision 2030’s goal, the KSA government is developing strategies for local industries that support the value chain of oil & gas, construction, automotive, and shipbuilding industries. As steel is the major material consumed by these industries, the increase in localized steel production is expected to boost the market growth.
Favorable Growth of Construction & Automotive Industries to Drive Market Growth
Saudi Arabia is the leading producer of crude steel and steel products in the GCC and ranks 22th in the global crude steel production. Steel is majorly consumed in the construction, oil & gas, and automotive industries in the country. The Saudi Arabian government has planned to diversify its economy to reduce its dependency on oil-based industries. Under Vision 2030, the KSA government has initiated mega construction projects such as NEOM, the Red Sea Project.
These mega projects are projected to fuel demand for iron, steel, glass, & cement in construction activities. The residential sector is also expected to indicate significant growth during the forecast period due to population growth, tourism, and consumer spending on homes. Moreover, under Vision 2030, the KSA government aims for OEMs to produce 300,000+ vehicles in the country between 2020 & 2030. The growing automotive production in the country means locally made iron, steel, and glass parts would experience robust demand in the manufacturing process.
While manufacturing iron, steel, and glass, refractories are used as a vital lining material for working interface and backup zones in the furnaces. Cheaper availability, thermodynamic stability, and greater resistance to slag attack are the key factors behind their use in these industries. Refractory products can sustain the high-temperature atmosphere. Therefore, as iron, steel & glass products experience increasing demand in the near future, the refractory industry is expected to grow in the country.
Stringent Regulations and Higher Import Dependency to Limit Market Growth
The steps involved during refractory manufacturing cause higher CO2, CO, and VOC emissions. These greenhouse gases lead to environmental hazards. Thus, developed countries such as the U.S., European Union, and others have set stringent emission regulations on the refractories industry. The KSA government is also taking concrete steps to control air & water pollution. Under the Saudi Green Initiative Forum 2021, the country announced plans to reach net-zero carbon emissions by 2060. Thus, refractory manufacturers must balance their energy utilization and their carbon footprints. Such restrictions are affecting the profit margins. Also, due to limited manufacturers, the country imports a considerable amount of products from other geographies. These factors are limiting the growth of the market in the country.
Bricks & Shaped Segment Dominated the Market Owing to its High Adoption
The market is segmented into monolithics & unshaped and bricks & shaped on the basis of form. Among these, the bricks & shaped sector held the lion's share due to bulk demand from metal and non-metal manufacturing sectors. The insulation layer is made of shared refractory products, which is a timely replacement to maintain operational efficiency. Thus, these forms are higher in demand. The monolithic & unshaped products are used where shaped products have limited usage. For instance, the inner linings of reactors are generally insulated with monolithic. Also, these forms find many applications in oil & operations such as Fluidized Catalytic Cracking Units (FCCU), Sulfur Recovery Units (SRU), heater, and boilers.
Cheaper Cost and Bulk Raw Material Availability to Augment the Share of Clay Segment
By product type, the market is categorized into non-clay and clay. On account of cheaper cost & bulk raw material availability, clay refractories are widely used materials. Fireclay bricks are extensively adopted in iron & steel manufacturing. However, non-clay products are specifically used for corrosive processes to resist the impact of acid and bases. High alumina-based non-clay products are becoming popular due to their excellent thermal and creep resistance.
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Iron & Steel Industry Holds Lion's Share in the Global Market Owing to its Increasing Applications
The iron & steel segment is expected to dominate the Saudi Arabia refractories market share due to its increasing application in reactors, vessels, and furnaces used during the production of steel. Moreover, due to the replacement of refractory lining in every half an hour to two days during several steel manufacturing processes results in its hefty consumption across the iron & steel sectors.
Technologies such as glass melting mostly depend on the quality and development of refractory materials. Refractory selection is most critical to build a glass furnace since the furnace’s lifespan depends on the refractory’s quality. The main structural refractory material required for the production of glass furnaces is Alumina Zirconia Silica (AZS). The materials is not wetted easily using the molten glass due to its low reaction. The switch toward sustainable solutions for the development of high quality materials by using plastics is expected to facilitate the growth of the glass.
Dependable refractory materials play a crucial role in enhancing efficiency during the cement production procedure. Refractory bricks are utilized in the cement industry in rotary kilns. Monolithics are utilized in substantial cement kilns portions are used outlets with high wear rates. Dense castables are utilized to line cyclones in the pre-heater section of cement plants due to their excellent water resistance and complex shape. Other applications of refractory solutions are in boiler, machinery, electric power, petrochemical, military, and light industries.
Local Players Aim for Maximum Market Reach with Stronger Distribution Network
Local players occupy less refractories market share in Saudi Arabia. Over the years, these local players have established their geographic presence and strong brand names among various end-use industries. However, the country imports a considerable amount from other countries. Thus, the local manufacturers face competition from the supply chain's importers. Hence, to sustain in the market, the competitive rivalry among local manufacturers and suppliers in the market is high.
An Infographic Representation of Saudi Arabia Refractories Market
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The Saudi Arabia refractories market research report offers qualitative & quantitative insights on refractories across all Kingdoms of Saudi Arabia. Quantitative insights comprise market analysis in terms of value (USD Million) & volume (Kilo Tons) across every segment and sub-segment profiled in the scope of the study. Qualitative insight covers an elaborative analysis of key market drivers, restraints, growth opportunities, and market trends related to the market. The competitive landscape section covers detailed company profiling of the key players operating in the industry.
Volume (Kilo Tons); Value (USD Million)
By Form, Product Type, and End-use Industry
By Product Type
By End-use Industry
Fortune Business Insights says that the Saudi Arabia market size was USD 160.2 million in 2021 and is projected to reach USD 254.6 million by 2029.
The global market is expected to grow at a CAGR of 6.4% during the forecast period.
Iron & steel segment holds the largest share in the market.
An increase in demand from the iron & steel industries is the key driving factor for this market
Saudi Refractory Industries, AOSCO Refractory, FSN Company, and Arabian Refractories Factory Company are a few of the key players operating in this market.
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