RHI Magnesita, the global leading supplier of refractory products, systems and services, announced a global price increase for its products and solutions across both the steel and industrial divisions. As a consequence of the persistent increase in operating, raw materials, manufacturing, environmental and regulatory costs, RHI Magnesita has introduced a 5 percent price increase for its portfolio. This increase has been applied to the whole product spectrum worldwide including basic (magnesia and dolomite based) and non-basic products, varying in a range of 3 percent to 20 percent. Customers have already started to be informed accordingly.
“To support investment in technology, environmental solutions, regulatory demands and the production infrastructure necessary to serve our clients, we are adjusting our prices to sustainable levels. This will fully reflect the value of our investments in backward integration as well as our intense service-based model and is paramount to maintain our position in the long-term as the most reliable partner of our customers and to drive value and innovation in our industry”, said Gustavo Franco, Chief Sales Officer at RHI Magnesita.
Raw material prices projected to settle at significantly higher levels
Global scarcity of raw materials is still evident, predominantly a result of Chinese environmental regulations restricting mining and processing. Since 2017 there has been a step change in refractory raw material production as China has rigorously implemented new environmental standards. Consequently, the refractory industry has been faced with supply shortages, leading to elevated raw material prices especially in higher grade dead burned and fused magnesia. Increased export taxes, more restrictive allocation of explosives and the nationalization or controlled consolidation of mining operations in China have structurally altered the production, pricing and dynamics for industrial minerals and this situation is expected to remain in 2019.
Whilst the high price levels of 2018 are not perceived to be the long-term equilibrium, and prices have already softened recently, both costs and prices for basic and non-basic raw materials are expected to settle at levels much higher than those that prevailed before 2017.