Report highlights

The combination of slow growth in crude steel production and improved refractory specifications and applications reduced consumption of refractories worldwide. Refractories are such an important market for magnesia that the decline in this market is estimated to have more than halved total magnesia consumption in most industrialised countries over the last thirty years. However, by 2008, worldwide consumption of dead burned magnesia and fused magnesia is expected to rise to nearly 5.2Mt because of strong growth in the Chinese steel and non-ferrous metals industries.

One of the main areas of growth in demand for caustic calcined magnesia and magnesium chemicals in recent years has been in agriculture. Growing world population and changing dietary patterns mean that intensive methods of arable farming and animal husbandry are becoming more widely used. Magnesium is often added to soils, usually in the form of dolomite, while CCM is more often used as a feed supplement for livestock. Roskill estimates that consumption of CCM will grow by an average of 2%py until 2008, while consumption of magnesium sulphate in fertilisers will probably remain static.

The price of dead burned magnesia rose by over 25% in 2004, which was the first increase since the late 1990s. However, the increase in published Chinese magnesia prices was caused by sharp rises in costs of production such as power, transport and raw material costs, not by producers taking advantage of supply shortages. The long-term price of dead burned magnesia and fused magnesia will largely be determined by rising Chinese consumption in refractories and the amount of material exported from China.

Chinese magnesia producers have formed four export associations since 2000 in an attempt to regulate exports and maintain prices. The China Magnesite Self-Disciplined Association (CSMA) was formed in 2004 and its effectiveness in helping to regulate exports will be of great importance in determining future dead burned and fused magnesia prices.