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[June 2004]
China Price Hike in Raw Materials Will Affect European Refractories Industry
PRE - the Brussels, Belgium based European Refractory Producers Federation - says that the European steel industry should expect considerable price rises in refractory products due to price increases of up to 100% for raw materials imported from China, the main producer of bauxite, magnesia and graphite.
A Chinese economic boom, higher transport costs both within China and between China and Europe and the set-up of a Chinese magnesia cartel at the beginning of the year have all contributed to price rises. The cost of refractory bauxite in Europe has doubled in the last few months; the cost of magnesia has risen by nearly 100% and that for graphite by more than 50%. The Chinese government has also introduced tax incentives to reduce the export of raw materials, favouring instead the export of finished products.
Rogier Chorus, Secretary General of PRE, said: "These are crippling price rises that the European refractories industry can no longer be expected to bear without passing on increases to producers. The steel industry is the main sector affected and, to a lesser extent, the cement and lime, chemicals, ceramics and glass industries. The affected sectors should expect a significant price rise if the future of the European refractories industry is to be assured.
"China has the upper hand here since its highly-competitive and aggressive entry into world markets for these raw materials has seen alternative producers based in Europe and North and South America forced to reduce or even terminate their activity."
The European refractories industry has an annual turnover of €3.5 billion and employs 25,000 people.
ENDS