Contents
• Fused Magnesia
• Global FM Market, Demand and Prices
• Effects of Global Economy Issues
• Kümaş FM Production
• Kümaş FM Products • Refractory Grade
• Electrical Grade
• Conclusions and Outlook
May 2016, Vienna 2
Fused Magnesia
• Fused magnesia (FM) is produced by electric arc melting of magnesite, CCM or DBM in a traditional Higgins furnace or in tilt-type furnace at >2850°C.
• Furnaces can be operated on both one-step or two-step processes depending on energy costs and supply. Magnesite is used in the one-step and CCM in the two-step process.
• FM is characterized by very large periclase crystals of more than 1,000μm (compared to 40-120μm for DBM) and a density approaching the 3.52 g/cm3.
May 2016, Vienna 3
Product Process Temperature
(°C)
Crystal Size
(µm)
Density
(g/cm3)
CCM 700 – 1000 <0,5 -
DBM 1500 – 2000 40 - 120 3,15 – 3,42
FM >2850 >800 > 3,48
May 2016, Vienna 4
84.00%
2.40%
13.60%
2015 Global Production of FM
China KÜMAŞ Others
Estimated global FM production was around 1,2 million tonnes in 2015.
Cost of Fused Magnesia Production
May 2016, Vienna 5
Raw
Materials
Graphite
Electrodes
Energy
Labor
Costs
May 2016, Vienna 6
400
500
600
700
800
900
1000
1100
1200
1300
2010 2011 2012 2013 2014 2015 2016
Average FM 97 - 98 Prices (USD/ton FOB China)
FM 97 FM 98
490500510520530540550560570580590600
Average FM Prices 2015 (USD/ton FOB China)
FM Prices
Source: Asian Metal
Prices down by 40% in 5 years
Capacity utilization ratio and exports
May 2016, Vienna 7
0
10000
20000
30000
40000
50000
60000
70000
80000
January February March Q1 Total
China FM Export Q1 Comparison (tonnes)
2015 2016
Q1 2016 exports up by 14%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Capacity Utilization of China FM Production (%)
Source: Asian Metal
Capacity usage 23%
May 2016, Vienna 8
10000
14000
18000
22000
26000
30000
34000
38000
China FM Exports 2015
Russia 16%
Japan 16%
USA 15%
Netherlands 11%
South Korea 11%
Brazil 6%
Italy 6%
Turkey 3%
India 3%
Other Countries 13%
FM Exports by Destination 2015
0
100
200
300
400
500
2008 2009 2010 2011 2012 2013 2014 2015
China FM Exports (000t)
Source: Asian Metal
2015 exports down by 18% y-o-y
Steel Production and China’s Growth
May 2016, Vienna 9
900
1000
1100
1200
1300
1400
1500
1600
1700
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
World Crude Steel Production (million tonnes)
4
6
8
10
12
14
16
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China GDP Growth (annual %)
Source: World Steel Association Source: World Bank Statistics
Q1 2016 steel output down by 3,6% y-o-y
May 2016, Vienna 10
1500
1600
1700
1800
1900
2000
2100
2200
2300
2400
2500
300
350
400
450
500
550
600
650
700
750
Ap
ril
May
Jun
e
July
Au
gust
Sep
tem
be
r
Oct
ob
er
No
vem
be
r
De
cem
be
r
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
2015 2016
Inve
nto
ry (
00
0t)
Pri
ces
($/t
)
Rebar Prices and Inventories (China)
prices Inventories
Source: Bloomberg
?
FM Trends
May 2016, Vienna 11
FM producers are trying to
find new methods like
fluxing
Higher quality FM
demand increased
Increasing use of fused minerals in
cement&lime kiln
refractories
Special fused
products for niche
applications
Companies purchases low priced
FM and reducing its
capacity
Magnezit Group plans to increase
FM production
capacity
Kümaş FM Plant
May 2016, Vienna 13
40.000 t/y FM
Production
Capacity
4 Arc Furnace
with Power of 8
MVA
Fused Oxychrome
and Spinel
Products
Two-step
Production
Process
Fusion Process
• State-of-the-art production facility
• CCM is smelted by arc furnaces with full automated system
• Energy intensive process
• Specific energy consumption is around 3000 – 4000 kWh/ton
• Safety issues must be considered
May 2016, Vienna 15
Optical Sorting
May 2016, Vienna 16
• Fused ingots contain different grades of fused magnesia.
• It should be separated before using it.
• Optical sorters help to separate the materials with high capacity after crushing.
• With this technology Kümaş guarantees highest quality.
Refractory Grade FM
• Kümaş refractory grade FM has low silica content, high lime/silica ratio, with high density.
• Kümaş FM is essential for high performance magnesia-carbon bricks .
• These MgO-C bricks are specially used at basic oxygen furnace (BOF) vessels, ladles and electric arc furnace (EAF) slag liners.
May 2016, Vienna 17
May 2016, Vienna 18
SiO2 CaO Fe2O3 Al2O3 MgO
KM FM 97,5 0,65 1,35 0,40 0,10 97,50 3,50 800 - 2000
KM FM 97 0,75 1,65 0,50 0,10 97,00 3,50 700 - 1700
KM FM 96,5 1,00 2,00 0,50 0,10 96,50 3,49 600 - 1500
KM FM 96 1,10 2,20 0,60 0,10 96,00 3,48 600 - 1500
KM FM 95C 2,00 2,50 0,70 0,10 94,70 3,30 300 - 500
SiO2 CaO Fe2O3 Al2O3 MgO Cr2O3 Density (g/cm3)
KM Oxychrome 1,00 1,00 12,00 8,00 58,00 20,00 3,70
Chemical Composition (% wt) Density
(g/cm3)
Crystal Size
(µm)Grades
Electrical Grade FM
• Kümaş fused magnesia is also used as an electrical insulating material in heating elements (brand name KuRes).
• Carbon, sulphur and iron oxide are particularly undesirable.
• Kümaş has the perfect raw magnesite for the production of electrical grade FM with very low iron oxide content for high temperature applications.
May 2016, Vienna 19
May 2016, Vienna 20
MgO Fe2O3 Carbon Temp. Tap Density Surface Load
% wt % wt ppm °C g/cm3 W/cm2
KuRes H 11 97,00 0,20 50 900 2,42 9
KuRes H 01 96,50 0,20 50 850 2,42 7
KuRes M 21 96,00 0,30 80 750 2,42 6
KuRes M 02 95,65 0,30 80 650 2,42 5
KuRes L 31 95,30 0,40 100 500 2,42 4
KuRes L 03 95,00 0,40 100 450 2,42 1
Grades
Advantages of Kümaş Fused Magnesia
• High purity cryptocrystalline magnesite for CCM,
• Two-step process,
• Larger crystal size,
• Low iron oxide and impurities,
• No fluxing agents,
• Higher quality provides higher performance for refractory applications.
May 2016, Vienna 21
• Fierce price competition of Chinese FM products
• No expectations of a recovery in near future
• Demand will continue to increase for higher quality
• The future of FM is connected to the future of global steel industry
May 2016, Vienna 22
Conclusions & Outlook