Asia-Pacific Metallurgical Grade Fluorspar Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Asia-Pacific Metallurgical Grade Fluorspar Market is projected to register a CAGR of over 5% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Metallurgical grade fluorspar can be used to aid the removal of impurities in metal production including stainless steel production and can be used as a flux to speed up the calcination process during the production of cement. Considering the pandemic scenario, metal manufacturing, and construction activities were on a temporary halt during the government-imposed lockdown, thus led to a decrease in the consumption of metallurgical grade fluorspar from the end-user sector including construction and metal processing, which in turn negatively impacted the demand for the Asia-Pacific metallurgical grade fluorspar market.

Key Highlights

• Over the short term, the increasing demand for metallurgical grade fluorspar from the metal processing activities with the growing crude steel output in China is expected to drive the market's growth.
• On the flip side, the unfavorable conditions arising​ due to the impact of COVID-19 is expected to hinder the market's growth.

Key Market Trends

Increasing Demand from the Cement Segment

• Metallurgical-grade fluorspar is used in cement production where it acts mainly as a flux. It is added to the mix of cement raw materials before introduction to the rotary kiln.
• The addition of fluorspar provides savings in thermal energy by allowing the kiln to operate at a lower temperature, thus saving fuel.
• It also increases the amount of tricalcium silicate produced. More tricalcium silicate results in a softer clinker product, which requires less grinding time, thus saving electrical energy.
• However, the use of metallurgical fluorspar can damage the refractory lining in the cement kiln and this factor has limited its use in the cement industry.
• The burgeoning building and construction industry in the Asia-Pacific has been instrumental in igniting the market demand for cement, and thereby, fueling the demand for metallurgical fluorspar in cement applications, until the onset of the COVID-19 outbreak. However, the impact of the pandemic on the cement demand in the Asia-Pacific region has been milder than expected.
• Cement production in India has increased over the years, with production reaching an all time high of 337.3 million tons in 2019. As per the Cement Manufacturers Association, India holds 8% of the world’s installed capacity. The nameplate capacity of cement manufacturers has increased at a CAGR of 7.1% during 2016-2019, which has propelled the demand for metallurgical grade fluorspar. Manufacturers have maintained a capacity utilization rate of 65-70% between 2015 and 2019. However, according to the Ministry of Commerce and Industry, the cement production fell by 85% year-on-year to 26.3 million tons in the first six months of 2020, from 178 million tons in the same period in 2019, thus hampering the market growth.
• Furthermore, the total new construction in Japan was accounted for about 127.55 million square meters in 2019 and reached about 113.74 million square meters in 2020, with a decline rate of about 10.5%, which in turn negatively impacts the demand for the cement and in turn metallurgical grade fluorspar market in the country.
• Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.

China to Dominate the Market

• In Asia-Pacific, China is the largest economy in terms of GDP. In 2019, the country witnessed about 6.1% growth in its GDP, despite the trade disturbances caused due to its trade war with the United States. Currently, the Chinese economy has been severely hit by the COVID-19 pandemic. According to IMF, the country’s economy is expected to slow down to 2.3% in 2020, while recovering to 8.4% growth in 2021.
• The crude steel output of China has recorded a year-on-year growth of 7% in 2020 to reach 1065 million tons. Furthermore, the finished steel industry has posted an output of 1.3 billion tons in 2020, which is almost 10% growth from that of 2019.
• The country produced 30.14 million tons of crude stainless steel in 2020, up by 2.51% from 2019. In addition, China is projected to produce 32 million tons of stainless steel in 2021, up by more than 6% from 2020.
• China is also the largest cement producer in the global market. The cement production exhibited a decline of 5.1% between 2017-and 2018, however the production has increased at a steady rate in 2019, with 2200 million metric tones produced in 2019, increasing the effective utilization of cement additives for cement production purposes in the country. In July 2020, cement production was 220 million metric tons, and the cumulative production was 1.2 billion metric tons in the first seven months of 2020, declining by 3.5% year-on-year from 1.3 billion tons in the corresponding period of 2019. The production was highly impacted by the strict lockdowns imposed in the country due to the COVID-19 pandemic.
• The central government is pushing for the sale of more than 3.75 trillion-yuan (USD 550 billion) worth of so-called “special bonds” which is likely to jump-start the private spending and investment. Almost 30% of the money is earmarked for industrial parks, town construction and infrastructure, while another 20% is going to be spent on transport, logistics and energy projects. These are expected to have a positive effect on metallurgical grade fluorspar market in the country.
• Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.

Competitive Landscape

The Asia-Pacific metallurgical grade fluorspar market is consolidated in nature. Some of the key players in the market include Mexichem S.A.B. de C.V. (ORBIA), China Kings Resources Group Co., Ltd., Maharashtra Minerals Corporation Limited, Steyuan Mineral Resources Group Ltd., and Zhengzhou Rongsheng Kiln Refractory Co., Ltd., among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support