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% 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% to 20%. Customers have already started to be informed accordingly.
“To further accelerate 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, which adjusted the level of production to global 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.
About RHI Magnesita
RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are indispensable for industrial high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers in nearly all countries around the world. The Company has a high level of geographic diversification with more than 14,000 employees in 35 main production sites and more than 70 sales offices around the world. RHI Magnesita intends to leverage its global leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefitting from more dynamic economic growth prospects. Its shares have a premium listing on the London Stock Exchange (symbol: RHIM) and are a constituent of the FTSE 250 index.
