China has dominated the world magnesia supply for decades. The uncertainty of the COVID-19 outbreak has made overall demand for magnesia was lower in the first half of the year in 2020, rebounding to January levels by the third quarter as global lockdowns were eased.
According to the U.S. Geological Survey, the world's magnesite resources are identified at 7.6bn. tonnes. The estimated reserves of magnesite in China is more than 1 billion metric tons as shown in Chart 1.
The total annual production of magnesite from China, is about 18 million metric tons, make up over 70% of the world production capacity as shown in Chart 2.
Although China didn‘t hold the largest magnesite deposits around the world, it continued to produce a significant proportion of the world’s capacity in the past decades.
According to a review of the world's natural magnesite resources and production by IM, 93% of the world's magnesite resources are the sparry (coarse) type and just 7% of the cryptocrystalline (fine) type.
For some deposits, such as China and North Korea, the sparry magnesite is massive and easy to mine. In addition, China's magnesite resource distribution is highly concentrated. There are around 27 mining areas distributed in around 9 provinces of China.
Liaoning province – China’s magnesia production hub, hold the largest China magnesite resource, according to the local source, as shown in Chart 3, estimated magnesite reserves in Liaoning province is about 3.52 billion tonnes, which takes up over 85% of China's reserves and about 22% of the world's reserves.
The magnesite resource in Liaoning province is distributed in Haichang and Xiuyan, Anshan city; Dashiqiao, Yingkou city; Fengcheng and Kuandian, Dandong city; and Fushun city, etc. However, according to the Anshan City Statistics Bureau (2020), 95% of Liaoning's magnesite resources are located in Anshan, which is identified at 2.76 billion tonnes. Meanwhile, there are around 40% of Anshan's deposits with theoretical maximum magnesia (MgO) content of 46%. Haicheng holds a large proportion of Anshan's reservers, over 70%.
According to the data from Huaon Research, the export volume of magnesite was increasing gradually in China, which peaked at 294,046 mt in 2017. Meanwhile, in the following years, China's magnesite exports are still growing and rose to 508,391 mt in 2020, up 19.25%.
Magnesite and Magnesia
Magnesite refers to the natural mineral, but there are three commercial grades derived from magnesite: caustic calcined magnesite (CCM), dead burned magnesite (DBM), and fused magnesia (FM). These differ mainly in density and crystal development that results different levels of heat application.
DBM and FM are used predominantly in the refractory industry, where they are mainly used to make shaped and unshaped products to line high temperature vessels such as furnaces and kilns in the steel, cement, non-ferrous, glass and chemical industries.
China policy changes, coupled with the impacts of the global COVID-19 pandemic, have resulted in inconsistent supplies and restricted availability of all grades of magnesia in the world market.
The Liaoning provincial government released several policies response to the supply-side structural reform from the central government, which include:
'Emission standard of air pollutants for magnesia refractory industry'