Kaolin - Production and Consumption in Asia

Background

Kaolin resources within Asia are potentially capable of supplying much of the regional demand although imports from USA, Brazil and potentially Australia will remain very important for some years to come. Focusing on higher value kaolins it is suggested that some sectors offering market opportunities include the following:

•         Japan’s large papermaking industry especially for high-end coating clays and potentially lightweight newsprint-filler calcined clays.

•         China’s high growth in papermaking especially following the commissioning of new facilities of APP over the past year or two.

•         China’s fibreglass industry as Taiwan moves some major operations across the strait.

•         Advanced automotive catalyst honeycomb substrate markets in Japan, Korea and Taiwan.

•         White-firing, low impurity clays for tableware especially growth in Thailand and Indonesia. Also white-firing clays for use in engobes, glaze and as matrix in granito tiles.

•         Paint and coated-rubber grade kaolins, especially calcined kaolin as partial replacement of Ti0₂.

Some of these areas of opportunity will be assisted strongly by various joint ventures between leading producers from USA and Europe.  With regional deposits being opened up and leading equipment along with cutting edge processing technologies.  It is evidence enough that if the deposits of suitable kaolins already well known are developed, then market entry can be rather rapid as has been the case with the Brazilian deposits, having become major exporters to USA and in fact this region.

Asian Kaolin Consumption

In Table 1, an estimated 16% of the world’s 38 million kaolin consumption occurring in the countries listed it can be seen that kaolin is significant to the regional economies. Papermaking in Japan is obviously the largest sector of kaolin consumption in the region with around 1 million tonnes per year. It represents almost 25% of the tonnes but close to and estimated 60% of the total value of the kaolin used in the region. Other major fillers for the paper industry there include GCC approaching 400,000 tonnes, PCC and talc both around 300,000 tonnes each per year. Japan buys 26% of USA exports estimated in excess of US$264 million.

Table 1. Indicative kaolin movements into selected Asian countries (in thousands of tonnes)

Notes: source: Latest available data from UN, DFAT, and Stratum estimates. Totals may not add due to rounding. Korean Production listed by some sources as 2.6 million tonnes but washed usable portion is likely to be much less. Singapore consumption seems high unless for cement manufacture and it is likely some is re-exported but not shown in data available. China production and consumption is most difficult to define due to large number of operations reported and some debate between kaolin and ballclay production totals. Major suppliers to Japan represent all the leading producers including: Engelhard ~300kt, Imerys ~340kt, Huber ~180kt, Brazilian sources~230 kt, and Thiele ~65kt. China kaolin production estimated at between 1,100 kt and1,500 kt with estimated 21 million tonnes of all clay types. ** largely Guangdong black ballclay for ceramic tiles and sanitaryware, reduced from ~900kt in 1995. E.O.E.

Kaolin

Kaolin is fine white clay mainly composed of kaolinite but other related minerals such as halloysite are also considered. Kaolin is formed through the alteration or kaolinization of feldspar-rich parent rocks by weathering or hydrothermal processes. The ultimate breakdown product of most rock-forming minerals is kaolinite.

Kaolin Production in the Asian Region

At times the trade statistics include ballclay in the kaolin category, for various reasons, making exact tonnages and prices, of what our industry calls kaolin, somewhat difficult.  In excess of an estimated 5 million tonnes of kaolin is produced in the Region from India in the west through to China, Korea and Japan in the Far East. China is obviously one of the major producers of kaolin with an estimated one and a half million tonnes mined annually from more than 600 mines.

Korea, Indonesia, India and Thailand are also among the other largest current producers of Kaolin. Several of the regional economies are only now recovering from the 1997-8 recession, but the strength of China’s performance has in some ways made up the deficit in total output as well as consumption with the incredible construction-led growth since 1990.

Kaolin Imports into the Asian Region

Apart from regional production of 3.5 million tonnes indicated in table 1, close to an equal tonnage of 3.4 million tonnes is imported into the region. As indicated, almost 1.8 million tonnes of these imports are coming from USA and Brazil. The major suppliers of this kaolin appear to be Engelhard, Imerys, Cadam, RCC, Para Pigmentos, Huber, and Thiele, these being among the leaders in world kaolin production.

Estimates of China’s kaolin production vary greatly, but an estimated 1.4-1.5 million tonnes seems not unreasonable considering the 600 identified kaolin locations (Chinese Industrial Minerals, IMIL). It has been suggested that all clays produced in China, including ballclay, which accounts for a major part of ceramic raw materials, is in the order of 20 million tonnes per year (Almanac of China’s Building materials). Today we are concerning ourselves with higher value kaolins and thus imported kaolin is certainly included.

Japan is outstandingly important in use of high value kaolins, and an estimated 85% of imports used in the papermaking industry. Fibreglass manufacturing in Taiwan has been also a very important consumer of imported kaolin, and it is only now that this is being stemmed, mainly by re-location of several major fibreglass producers to China. This trend of industrial manufacturing towards China, based on huge growth in demand for more than a decade and looking like continuing strongly is part of a “sea change” in kaolin supply and demand in the region.

Production of Kaolin in Asia

The production of Kaolins in the various Asian countries is summarized in the tables below.

China

Table 2. Production of Kaolin in China

Source: IMIL, Stratum estimates

South Korea

Table 3. Production of Kaolin in South Korea

Taiwan

Table 4. Production of Kaolin in Taiwan

Malaysia

Table 5. Production of Kaolin in Malaysia

Japan

Table 6. Production of Kaolin in Japan

Thailand

Table 7. Production of Kaolin in Thailand

Source: Stratum estimates

Indonesia

Table 8. Production of Kaolin in Indonesia

Sources: Roskill, IMIL, Stratum estimates, company data.

The Philippines

Table 9. Production of Kaolin in The Philippines

Sources: Stratum estimates

Australia

Table 10. Production of Kaolin in Australasia

Sources: Roskill, IMIL, Stratum estimates, company data.

Kaolin Imports into the Asian Region

Table 11. Selected key movements of Kaolin into/around the Region by source.

Sources: Roskill, IMIL, Stratum estimates, company data.

Kaolin Usage

Table 12. Kaolin Estimated use by sector

Source: Stratum estimates.  Note *980-1,000kt of this in Japan, **Growth reduced by use of PCC/GCC,  ***Includes Al₂O₃ source/additive. pyrophyllite is also used especially in Thailand and Sth.Korea

Opportunities for Producers

Many opportunities exist for mineral pigment producers in the Asian region. The challenge seems to be in the finding of a suitable regional kaolin resource, proving it up and perhaps establishing a joint venture with the owner of the land involved. Next is the confirmation of regional specifications needed to be able to refine the products so that these are suitable for consumption by existing and future customers. This is a major challenge as the buyers are often used to paying far lower prices than the new operation will be asking. However when the buyers see the benefit of reduced rejects, in the case of ceramics, and higher value products for the auto industry, and then the value will be accepted.

Market Demands

Market demands sometimes impact the kaolin industry adversely. For example, the majority of paper manufacturers use high-speed blade coaters. To improve the efficiency and throughput rates of these machines, as manufacturers are constantly seeking to increase operating speeds. This places a demand on the kaolin industry to provide kaolin products with rheological properties compatible with higher machine speeds. Since there is no technology for lowering the viscosity of kaolin, rheology can only be improved by blending ores, which has its economic and inherent limitations. Controlling rheological properties by blending crude ores or finished products is costly because it requires additional systems, labour and energy. In addition, the producer must operate and maintain more than one mine. 

Producer Trends

Businesses that sell into highly competitive markets, where profits are constantly squeezed, do not generally produce technological innovations. Although still suffering from low margins and thin profits, kaolin producers have been innovative, gaining better control of their costs and improving product quality while creatively responding to market demands with higher brightness products. They have developed the technologies for the production of affordably priced high quality products and are taking a long-term optimistic view of the market place. The kaolin industry will continue to work in a partnership with the paper industry in identifying new product needs and developing new products to fill these needs.

Trends within Asia

The past two decades have witnessed the exhaustion of many natural resources in Europe and North America, along with mature low-growth markets.  In addition high labour costs and increasing environmental constraints have been imposed.  This has encouraged interest and investment in the resources in the less populated and/or less developed nations.   In terms of clay resources, those within Asia are potentially capable of supplying both the indigenous and export markets, with particular reference to the Asian market where significant industrial growth is predicted to occur during the first half of the 21^st Century, with China leading the way.

China, the Focus of the Future

Japan is outstandingly important in use of high value kaolins, and around 85% of this is used in the papermaking industry in Japan. Fibreglass manufacturing in Taiwan has been also a very important consumer of imported kaolin, and it is only now that this is being stemmed, mainly by re-location of several major fibreglass producers to China. This trend of industrial manufacturing towards China, based on huge growth in demand for more than a decade and looking like continuing strongly is part of a “sea change” in kaolin supply and demand in the region.

Australian Calcined Kaolin Available Soon.

Skardon River Kaolin is currently preparing their operation in Northern Queensland. Once production is underway, in late 2001-early 2002, there will be production of both hydrous and calcined clay under the brand of Microbrite® kaolins. The calcined grades in particular are of high interest to paper and paint producers throughout the region, as well as metakaolin for cement additive use. The hydrous grades appear to have useful properties for ceramics.

Primary author: Murray Lines

For more information on this source please visit Stratum Resources.