Resumen de Chinese steel debt burden weighs on domestic refractories sector
Dianli Xu, vice director of the China Refractory Association, told members that overcapacity among steel producers was one of the biggest threats to the refractories industry. He said that, in 2015, China's top 101 steel companies posted a collective loss of Rmb 64.5bn ($9.96bn) and that, as of the end of last year, banks had extended loans worth more than Rmb 1.33 trillion ($200bn) to the struggling Chinese steel sector. This means that steel businesses are highly leveraged and unable to pay for the refractories they consume.
Dense refractory output was 15.3m tonnes, 7.75% lower than in 2014, while insulating refractory production was 473,500 tonnes, a drop pf 10% y-o-y. Unshaped refractory output fell 4.4% to 10.4m tonnes.
Export volumes of refractory raw materials, including alumina, bauxite and magnesia, fell 9.3%. The overall value dropped 14.1% and average prices were 5.3% lower y-o-y in 2015. Only brown fused alumina and white fused alumina export prices increased last year, rising by 1.2% and 3.7%. Prices of refractory alumina clay, fused magnesia, deadburned magnesia and silicon carbide fell by 10.4%, 3.2%, 2.2% and 12.4%, respectively.
