Knowing where you stand in relation to others brings a sense of security, combined with awareness of where you want to go next. This is true of individuals and companies. One way of knowing where you stand is to look at trading trends, and this article shows how international trading in the nearly $29 billion abrasives industry is changing.
Trends in Production & Supply
Global demand for abrasives has been climbing almost 6% per year for the last several years, and is expected to continue at that rate for the next several. The figures that follow were gleaned from the Mineral Commodity Summary produced by the US Geological Survey in January, 2012.
• In 2011 the biggest producers in the region of Asia and Pacific (China, India, Japan, Australia) produced an estimated 815,000 tons of fused aluminum oxide and 520,000 tons of abrasive silicon carbide.
• The second highest in regional production in 2011 was Europe (Austria, Norway, France, Germany) with 180,000 tons of aluminum oxide and 132,000 tons of silicon carbide.
• Production activities in the United States and Canada were quite a bit lower, due to higher operating costs. Those two countries, plus Mexico, produced about 60,400 tons of aluminum oxide and 87,000 tons of silicon carbide in 2011.
• South America (Argentina, Brazil, Venezuela) came in relatively close to North America with 50,000 tons of aluminum oxide and 78,000 tons of silicon carbide.
• The other 80,000 tons of aluminum oxide and 190,000 tons of silicon carbide produced that year came from an accumulated smattering of smaller producers worldwide.
This production trend is expected to continue, with the exception of slow, but gradual increases of garnet, emery, and metallic abrasives to replace the use of fused aluminum oxide and silicon carbide in some applications.
Trends in Buying
In 2010-11 the US imported 80% of its crude silicon carbide, 83% of its crude aluminum oxide, 42% of its silicon carbide grains, and 6% of its fused aluminum oxide grains from China. The only country the US imported more from was Brazil for 30% of its fused aluminum oxide grain.
During the next few years, according to a 2014 British Market Watch report on the world abrasives market, abrasives demand in North America and Western Europe is expected to increase with the recovery of the economy – 4% per year in the US, 2% per year in Europe.
In the Asia/Pacific region, overall growth is expected to slow down through 2017, although China’s 10% increase per year may continue a little while longer.
As currently developing parts of Asia and non-Western regions grow, their overall demand for abrasives will begin to outstrip that of the US, Western Europe, and Japan, especially as their durable goods sectors mature.
According to Linx-Consulting, a US market reporting firm, one market expected to grow at least 10% per year is specialty abrasives for computer multi-processing.
According to a British Market Watch report in July, 2014 paper and coated abrasives will show the biggest growth in the next few years, with metallics and super-abrasives being next. The fastest growing product category is nonmetallic abrasives, especially loose abrasive grains and powders.
Major buyers in the US markets have been the aerospace, automotive, furniture, housing, and steel industries and this will continue.
Globally imports, exports, consumption, and prices of manufactured abrasives will continue to slowly increase as economies recover. Overall, the trends look good.