Global heavy industry, particularly the demand for steel and non-ferrous metals, is poised for a fourth consecutive year of decline, driven by stagnation in the construction sector and China’s transition from a supply-and-volume-based economic model to one emphasizing demand and quality. This shift, according to Stefan Borgas, CEO of global refractory supplier RHI Magnesita, requires significant structural changes in China’s financing, regulations, and investor mindset.
China’s steelmaking capacity, currently at 1.25 billion metric tons per year, far exceeds its demand of around 1 billion metric tons. This surplus has led to record steel exports, with over 110 million metric tons shipped in 2024, the second-highest volume ever. Borgas highlighted that this excess steel is flooding foreign markets, reducing demand for refractories and related products. For instance, India’s steel demand grew by 8% last year, but production increased by only 4% due to Chinese imports.
While the steel industry remains a key profit driver for RHI Magnesita, accounting for 65-70% of its earnings, the non-ferrous metals sector is experiencing a slowdown. Few new copper, nickel, or aluminum plants are under construction, and existing projects are not expected to advance for several years, leading to a projected weakening of RHI Magnesita’s non-ferrous business in 2025.
In response to these challenges, RHI Magnesita is advocating for the inclusion of refractory-grade magnesite on the EU’s Critical Raw Materials list by 2026. Borgas emphasized the strategic importance of refractories, stating, “Without refractories, you cannot refine critical minerals; if somebody controls your refractories, they can stop you from making copper.”
The company is also advancing its recycling efforts, with a goal to source 20% of its refractory inputs from secondary materials by 2030. A new laser-based, robotics-supported recycling unit, developed with Norwegian and German partners, aims to enhance the precision of sorting refractory materials.
Additionally, RHI Magnesita is exploring greater integration into alumina sourcing following recent acquisitions. Alumina prices surged last year, peaking at 785−787 per metric ton in November 2024, before settling at $470 per metric ton in March 2025. Borgas noted that partnerships or acquisitions could help mitigate future price volatility.
Despite global trade uncertainties, including potential tariffs under US President Donald Trump, Borgas expressed confidence in the company’s flexible global supply chain. However, he acknowledged that adapting raw materials supply to tariff expansions would be challenging.
