World demand to rise 3.3% annually through 2017
Global demand for kaolin is forecast to rise 3.3 percent per year to 28.7 million metric tons in 2017, valued at $4.4 billion. Growth in kaolin consumption will accelerate as economic conditions improve worldwide, especially in recession-impacted North America and Western Europe. Advances in manufacturing activity will stimulate demand for kaolin in all key markets. However, gains will continue to be constrained by a relatively poor performance in the leading paper market, where kaolin usage continues to be affected by expanding competition from calcium carbonates.
Asia/Pacific region to be fastest growing market
The Asia/Pacific region held the largest demand for kaolin in 2012 and is projected to be the fastest growing through 2017. The world’s top four countries in projected growth rate for kaolin consumption through 2017 -- China, India, Malaysia, and Thailand -- are all located within the Asia/Pacific region. China will continue to be the largest market for kaolin in the region, and recently overtook the US as the largest national consumer of kaolin. Gains in kaolin demand in the Asia/ Pacific region will be restrained somewhat by a poor performance from the large Japanese market. Demand for kaolin in Japan is forecast to be flat through 2017, as modest increases in manufacturing will be counteracted by a declining market share for kaolin in paper production.
Western Europe and North America -- the second and third largest regions for kaolin consumption in 2012, respectively -- will both post improved demand for kaolin through 2017, although gains will trail the global average in both regions. The US, which accounted for nearly 80 percent of North American kaolin consumption in 2012, will rebound from the decline it saw over the 2007-2012 period and remain the second largest national market for kaolin worldwide. Demand for kaolin in Western Europe is less concentrated, with Germany, Italy, and Finland each accounting for over 10 percent of regional demand in 2012. Each of these countries saw their kaolin markets contract between 2007 and 2012. Finland, whose importance in the global kaolin industry is almost entirely due to high domestic paper production, posted an especially poor performance, suffering the most severe contraction in kaolin demand of any major kaolin-consuming country worldwide. Demand for kaolin in Western Europe will grow through 2017 as manufacturing levels rise.
Ceramics market to post above-average growth
Paper and paperboard production represents the largest application for kaolin, accounting for 38 percent of global consumption in 2012. Gains in this market will trail the overall average as calcium carbonates are increasingly used in place of kaolin in paper production. In the fastest growing ceramics market, kaolin is used in a variety of ceramic construction materials, resulting in significant gains in demand associated with the construction boom in the Asia/ Pacific region. This market also includes ceramic proppants, which were the single fastest growing application for kaolin between 2007 and 2012. Usage of ceramic proppants in hydraulic fracturing allowed this market to see fast growth in North America, propelled by a major increase in shale gas extraction in the United States. The ceramics market for kaolin is expected to continue to post above-average growth through 2017.