Silicon Carbide & More

What’s going on in silicon carbide, fused alumina & other minerals #2 August 2003

Supply news
EU duties: Yes or no? Europe
Elsid still the talking point
Elsid continues to be the talk of
By Paul Harris Hennepin, Illinois plant as the sole Europe as uncertainty remains
Exclusive to S i l i c o n C a r b i d e & More remaining crude producer for a market now over its potential. People want to
largely supplied from China. China supplied know whether this large graphite
ndustry observers seem to be in 91,200 metric tons of 133,000 metric tons of producer will convert the majority

I agreement concerning whether anti-

dumping duties against silicon carbide
from China (52.6%), Ukraine (24%) and
imports in 2001 according to USGS data.
Although low-cost Chinese material
undermined the economic position of
of its 100,000 metric tpa
production capacity to SiC? In
addition, will Elsid produce FEPA
Russia (23.3%) will be renewed when they producers in North America this was not grits during 2004?
are reviewed by the European Union (EU) the whole story as there was considerable With plants in Titu and
in May 2005: they will be abolished. This is market shrinkage at the same time. Slatina, Elsid produces ELSICAR
good news to consumers that want the lower Could Chinese material do the same in 99 (synthetic graphite) and
prices this will bring (no Europe? This seems unlikely ELSIC (silicon carbide) in the
surprise there) but what are It will be a due to the technological edge same furnace. It appears Elsid
the supply implications for of Europe's producers and will produce 30,000 metric tons
the 180,000 tpa EU silicon moment when many their ability to produce high of SiC in 2003 with an increase
carbide market? In the first things change and those value grades. The European planned for 2004.
of a two-part article, Silicon that are unprepared will market is more fragmented Let’s put the significance of
Carbide & More looks at than that in North America this producer into perspective,
some of the factors affecting suffer and each producer has by product line. Elsid’s Acheson
the decision. Next month certain regional advantages. furnaces are capable of
part two looks at the potential impact of Winding back the clock a couple of years, furnacing 100,000 metric tons
their removal on European producers. the EU had to decide whether to maintain of SiC, 75,000 metric tons of
Anti-dumping duties were imposed duties against Chinese brown fused alumina synthetic graphite, or 50,000
following a complaint by ESK-SIC of (BFA). Treibacher Schleifmittel AG, the metric tons for graphite
Germany and Navarro SIC of Spain, the world's leading BFA producer and formerly electrodes per annum.
sole EU producers. Although Europe is a strong advocate of duties, changed tack Silicon Carbide & More will
supplied by several European producers it when the renewal date came around as it saw visit Elsid during September to
must be remembered that Timcal, Saint- the supply of Chinese material as inevitable, find out more.
Gobain and Orkla-Exolon produce outside particularly as BFA customers were crying
the EU and therefore were not involved in out for it. Duties remain vs Ukraine
the petition. Given its size, resources and technology Despite Ukranian efforts to
Two recent examples provide strong Treibacher changed strategy to compete in remove US sanctions against
precedents of the different scenarios that different ways. The EU duties had bought silicon carbide imported into the
could result from an abolition. the company sufficient time to create a USA from the east European
North America has not imposed duties viable market strategy that did not need country, the 100% duty will
against Chinese material and in a few short protection. remain. The Ukrainians were
years production capacity has virtually This is a more likely scenario for silicon unable to satisfy the US Trade
disappeared. Recent closures of Saint- carbide with ESK-SIC in the position of Representative of its case for
Gobain's Shawinigan, Quebec furnace and Treibacher. The company has said it will do dropping the duty. US importers
Treibacher's operation in Niagara Falls, whatever is necessary to protect its markets, of silicon carbide will have to
Ontario have left Washington Mills Co.'s which would lead one to suppose it will è continue looking elsewhere. è

Silicon Carbide & More #2 © 2003

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 èThe 100% duty in force
ètry to maintain duties. However, it is also the EU in 2007 it may not be feasible to against Ukranian SiC imports
innovative, develops new products and has impose them. into the USA is a punitive trade
just under two years of protection to further EU enlargement does create a pickle for sanction relating to an
reduce its cost base and leverage its those who decide anti-dumping issues. As intellecutual property dispute.
technology (see news, right). one German trader commented: "By [2005]
Do producers really want to fight for the there will be new EU members, some of ESK wet grits
commodity market? European metallurgical whom are silicon carbide producers, and To retain its reputation as the
grade consumption is determined by the they may want protection from China, world's pre-eminent SiC
price of ferro silicon as much as anything Ukraine, and Russia. Others, like Poland, microgrit producer, ESK-SIC has
silicon carbide producers do. At the end of can import silicon carbide from China very begun construction of a state-of-
the day, reducing prices to shift product is cheaply and will not want to have that the-art 4,000 metric tpa wet
not a viable long-term strategy, which is why taken away from them." sedimentation plant in Grefrath,
producers increasingly compete on quality Extending EU duties to enlargement Germany.
and service as evidenced by Saint-Gobain countries will put them at a disadvantage The increased production
curtailing met grade production in Norway, by removing their supply sources (such as capability this new facility will
and Orkla Exolon focusing China and Ukraine). There provide will position the
on micro grits. is also the question of how company at the forefront of
But how far producers can EU anti-dumping effectively they can be highest quality green and black
reduce their exposure to the duties have created floor- enforced given the under- SiC powders supply.
commodity market is quite a laying scale of changes that These products are finding
conundrum as silicon carbide level pricing sufficiently will be underway? increasing use in applications
production inevitably prod- high enough to entice a Duties will only be kept such as diesel particulate filters
and green loop SiC carrier for
uces metallurgical grades. low-cost entrant into the producer, maintains
if ESK-SIC, the larger EU
they are cutting silicon wafers.
Eastern Europe market to the possible necessary as Navarro will ESK-SIC will continue to
Now let's complicate things a detriment of the find it difficult to keep them operate its well-established
little. All eyes are currently on its own. European prod- Grefrath dry sieving plant.
on Romania and Elsid. company's the duties ucers know that sooner or
Nervous eyes they are too as were imposed to protect later they will compete with Spainish vacation
Elsid is understood to be able Chinese material, or other August is the month when
to produce up to 100,000 low cost producers, in their companies in Spain break for
metric tpa, a volume that will change market own backyard. Forewarned is forearmed summer vacation, including
economics. 100,000 tpa on Europe's though and the current duties will give Navarro SIC. Full operations will
doorstep out of nowhere! Prices have some time for companies to improve their resume in September.
already fallen as Elsid stretches its wings. cost position and develop a viable strategy.
Suddenly China doesn't seem such a This applies to all Europe’s producers.
problem, particularly as electricity shortages 2005 promises to be an interesting year Americas
continue to restrict supply as evidenced by for silicon carbide. As one producer
North American price increases. commented: "It will be a moment when US Filter sold
Curiously, by preventing low-cost many things change and those that are Veolia Environnement SA has
Chinese material from entering the EU, unprepared will suffer. We hope that by sold United States Filter Corp.
anti-dumping duties have created floor- 2005 we will have been able to reduce our (USF) to a private US investor
level pricing sufficiently high enough to cost base and that the costs in East group. US Filter is a surface
entice a low-cost entrant (Elsid) into the European companies will have increased so preparation company that
market to the possible detriment of the that there is not such a big gap between us." makes equipment for cleaning,
companies the duties were imposed to The consensus is that duties will go, but polishing, and finishing surfaces
protect. These duties now provide Elsid a as a German trader commented: "Everyone that was built through
protected period of incubation and growth thought that the fused alumina duties would acquisitions.
from competition during which it can remain but the EU scrapped them so who USF is one of the world's
establish its market presence. I daresay can guess what Brussels will do in 2005 with largest purchasers of brown
because of this, Elsid is keen for the duties silicon carbide duties?” SiC fused aluminum oxide and
to remain in effect. generated $320 million in sales
For once, one may feel a little sympathy Coming in the future... during 2002.
for the bureaucrats in Brussels. ESK-SIC Green-loop slurry mgmt.by M Christ, PPT Research
and Navarro may like duties extended to EU anti-dumping duties part II by Paul Harris Exolon at full capacity
Romania but as the country hopes to join The shortage of Chinese silicon

Silicon Carbide & More #2 © 2003

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carbide in the USA has enabled at its old Bay State plant in Qinghai and Gansu provinces alumina is the anti-dumping
the only US furnace plant, Westborough, MA, many people (where the silicon carbide petition filed in the USA against
namely Exolon, to run at near believed Tyrolit had left the industry is located), many in the Chinese refined brown fused
capacity. With a relatively cool North American market, but this SiC business are keeping an eye aluminum oxide (RBAO).
Midwestern summer, electricity purchase proves the opposite. on the water gauge. The action (case A-570-882),
has been in generous supply. Tyrolit employs over 500 has been brought by petitioners
This should remain the case people at four production Washington Mills, Treibacher
throughout the balance of 2003. facilities in North America with Africa Schlieffmettel, and CE Minerals.
more than $150 million in Many in the industry believe
Elmet: who are they? revenue. In addition, Tyrolit has Sublime expansion plans the petition is a fight amongst
Only general information about 3,400 employees and operates The owners of Sublime importers since virtually
this Mexican SiC producer 20 production facilities across Technologies, the world's newest everyone involved in this case
seems to exist. Considering its the world. www.tyrolit.com SiC furnace plant, continue to imports RBAO from China.
rich history in the SiC business, make incredible progress. This Anti-dumping cases primarily
this comes as a bit of a surprise. Cometals electrodes fledgling company has been focus on the price of the
According to one of the Cometals, A division of working out the nuances of big imported material. The first
owners, the Electrometalurgia Commercial Metals Co., has furnace technology since early qualifier is when foreign
de Vercruz SA plant produces sold high quality graphite this year, and amazingly, after industries export to the USA at a
22,000 metric tpa of SiC in what electrodes to US and European only six months of production, is price that is both unfairly low
is believed to be the world's steel producers for several running at nearly 100% of its based on their cost of
largest furnace. Most of this is years. The company is now 10,000 metric tpa capacity. production (ie at less than this),
sold in Mexico and Europe. believed to be accelerating its To date, nearly all SiC has and below the net home market
The company completed SiC efforts in this market through been dedicated to South African price. In addition, there must
cupola brick and FEPA grain using multiple supply channels industries. Customers across the exist injury, or a threat of injury,
processing projects in the 1990s. and a dedicated sales manager. globe that hope to procure to a domestic industry.
Leave it to SiC and More. Not The two primary suppliers are Sublime SiC need not despair as The nut of this investigation
satisfied with general ISO certified Russian producer planning is underway for an appears to focus on the
information Silicon Carbide & Novosibirsk Electrode and expansion in 2004 that could lift definition of RBAO. The
More will trek to Nuevo Leon Ukrgrafit from Ukraine. capacity to 34,000 metric tpa. definition in the petition reads:
late in 2003 to bring details of Contact:Mikhail Toyberman at "Ground, pulverized or refined
Elmet’s SiC operations to its Cometals’ Fort Lee, NJ offices artificial corundum also known
global readership. Confirmation (201 592 3230) or via E-mail at BFA as brown aluminum oxide or
of powders expansion is tm@comtetals.com. brown fused alumina, in grit size
definitely in order. China BFA production of 3/8 inches or less.”
Citing National Bureau of This definition includes
Mexican “Micro” grits China Statistics data, China Daily particles with a diameter
Since 1982, Micro De Mexico reported aluminum oxide greater than 3/8 inch that
has produced high quality silicon Chinese electricity update production for the first three constitute less than 50% of the
carbide powder for the abrasive, The Chinese electricity dilemma months of 2003 at 141,950 total weight of the batch, but
refractory, ceramic and will probably not sound too metric tons. does not include particles with
electronic industries. This unfamiliar to most Americans Unfortunately, no data was a diameter of 3/8 inch that
entrepreneurial company has given recent events and those provided on SiC. Other products constitute at least 50% of the
increased produciton from 250 within the last four years. Some include: pig iron 4,521,020 m/t, total weight of the entire batch.
metric tpa in its first year to regions in North, East, and ferroalloy 110,030 m/t, and This investigation is ongoing
4,200 metric tpa now and enjoys South China have spent the caustic soda 218,400 m/t. and a Final Determination is
a global presence. summer experiencing power expected from the Dept. of
Silicon Carbide & More has shortages at peak times. Euro BFA ant-idumping Commerce in mid September.
an in depth report next issue on Much of China’s shortage can Due to lack of support from The International Trade
this progressive company. be attributed to continued Treibacher Schleifmittel AG, the Commission is expected to
economic development, which €204 per metric ton duty make its Final Vote and
Tyrolit buys Wickman is outstripping the expansion of against Chinese aluminum Determination around
Tyrolit, a leading manufacturer of electricity generating capacity. oxide expired in October 2002. November 1, 2003. Watch this
bonded grinding, cutting, sawing In western provinces that rely By contrast, read on: space for deelopments.
and drilling tools recently on hydroelectricity, drought has
announced the acquisition of caused interrupted power Petition filed against Nomenclature
Wickman Corp. of Oak Park, MI. supply. With the Yellow River Chinese RBFA 1 Metric ton = 1,000 kg
With its exit from operations supplying power for much of the The big news in brown fused 1 Metric Ton = 1.1023 s.tons

Silicon Carbide & More #2 © 2003

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 Silicon carbide prices price news

Western Europe Ukraine (processed Middle Europe) China

97.5% Refractory Various sizes €950 97.5% Refractory Various sizes €630
98% FEPA black F8-F220 €960-1,300 97.5% FEPA F12-F90 €630 Chinese SiC pricing
98% FEPA green F8-F220 €1,200-1,600 97.5% FEPA F100-F180 €660 Chinese SiC pricing and
98% FEPA F280 €1,500 97.5% FEPA F320 €1,200 availability are all over the map
98% FEPA F400 €2,400 97.5% FEPA F500, F600 €2,500 depending on whom you talk to.
98% FEPA F600 €3,500 However, key fundamentals
98% FEPA F1000 €4,500 China (processed Middle Europe) remain the same in August as in
98% -200 mesh €600-700 June and July. Electricity in some
Middle Europe 98% -325 mesh €700-800 provinces remains in short supply.
98% Refractory Various sizes €680 98% FEPA F320 €1,000 While heavy rains plague parts of
98% FEPA F12-F90 €700 98% FEPA F500, F600 €1,600-1,700 the country, drought still affects
98% FEPA F100-F180 €730 the availability of hydropower in
98% FEPA F320 €1,200 Metallurgical key SiC producing provinces.
98% FEPA F500, F600 €1,900 90% USA Chinese, bulk NOLA $390-398 Although pricing has stabilized,
90% Europe Chinese, 0-10mm €450 supply remains short. Supply is
USA 90% Ukraine Chinese, 0-10mm €410-430 expected to improve in the next
97% Refractory/Chinese, 3,000 lb sack, NOLA $640-700 few months, but pricing will remain
97% FEPA/Russian, F12-F220, NOLA $700-800 Notes at current levels until early 2004.
97% ANSI/N. Am., grits 24, 36, 60, FOB SP $810-870 Prices ex-works, dry sieve per metric ton, except USA (net
97% ANSI/N. Am., grits 80, 150, 220, FOB SP $850-920 tons). SP=ship point. Ukrainian material 24%, Chinese Export licenses
material 52.6% anti-dumping duty in EU. The Chinese SiC export license
program was implemented in
Price information has been obtained through contact with sources engaged in the trade of silicon carbide. 1999 when 270,000 metric tons
Actual transaction prices will be determined by a host of factors, including, but not exclusive to, quantity, were released. It stayed at this
grades, contract terms and various other factors. Price information sources are deemed to be reliable but level during 2000, but was
due to the possibility of error by Silicon Carbide & More, or others, Silicon Carbide & More does not
guarantee the accuracy, adequacy or results obtained from the use of such information. reduced to 230,000 m/t. in 2001.
All price information © 2003 by Silicon Carbide & More Inc. Licenses totaled 220,000 m/t in
2002, and increased to 230,000
m/t this year. About 124,215 m/t
SiC feedback kormackennedy@aol.com of SiC was released in the first half
of 2003 leaving 105,785 m/t to
Our staff is dedicated to seeking out the If there are specific supply issues or topics that be awarded. As always, Chinese
information you need to stay on the leading edge you would like to see discussed in future issues of authorities reserve the right to
of silicon carbide related business. Silicon Carbide & More, e-mail your ideas to us at: issue a third SiC tender, which
should be decided by October.

Silicon Carbide & More 97% Ch in e s e S iC R e frac to ry G rain FOB Ne w Orle an

800
( $/m e tric to n )

Price Tracker
Publisher: Kormac Kennedy Editor: Paul Harris
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