The largest market for kaolin is as an extender or filler, mainly in paper and paint, but also in rubber, plastics, and adhesives/sealants. Other important markets are in ceramics, fiberglass, and refractories. In addition, significant amounts of unprocessed kaolin are used in some applications, particularly ceramics. The relative importance of the two major markets for kaolin is forecast to change, with paper remaining the largest market but its share falling to 36% in 2017, compared with 39% in 2012, while ceramics grows to 31%, up from 29%, according to the Roskill report.
Asian production of paper grew by an average of more than 5% per year during the past decade to become the largest of any region, the report continues. Production elsewhere grew by less than 2% per year and declined in North America. Global paper and board production is forecast to rise by 2.5% per year to 2017, but Roskill expects demand for minerals to rise at a higher rate, especially in regions such as Asia where pulp costs are high. Much of the rise in demand will be for calcium carbonate rather than kaolin, however. Demand for kaolin in paper is therefore forecast to grow by an average of only around 1% per year to 2017.
Output of kaolin in Europe has recovered since 2009, despite capacity closures in the U.K., one of the main centers of production within the region. Production in North America has been declining because of competition with calcium carbonate and imports from Brazil. This has led to industry consolidation. IMin of the U.S. bought Huber's kaolin division to form KaMin in 2008 and later acquired CADAM of Brazil. Imerys bought PPSA in 2010 followed by Itatex in 2012 and is now in the process of buying Goonvean's kaolin operations in the U.K.
In Asia, production has been stimulated by rising regional demand for paper and ceramics and is now the second largest of any region. Output in the Middle East has risen to supply the expanding regional ceramics industry while in South America, production is export driven and closely linked to consumption by the global paper market.
Roskill's analysis shows capacity is currently sufficient to meet expected demand in most regions, meaning few new operations or expansions are expected. The main exception is China where capacity could increase by at least 0.7 million metric tpy by the end of 2013. A new operation will also reach full operating capacity in the U.S. in 2014. Energy is a significant proportion of the overall cost of producing kaolin. The fall in U.S. natural gas prices may make producers in that country more competitive and lead to a rise in exports. This may have a negative impact on producers elsewhere, particularly those that supply paper grades.
More information about this report is available online.
TAPPI
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