Strong Presence of Substitutes Could Weaken Demand for Magnesium Derivatives
The magnesium derivatives market is projected to grow 1.5X over 2019-2027, with magnesium oxide accounting for a significant chunk of the revenue. The availability of direct substitutes of magnesium derivatives could weaken their demand; however, increase in revenue channelized by agriculture, pharmaceutical, and construction industries holds favorable opportunities.
To put the movement of the magnesium derivatives market into perspective, a recent study published by Transparency Market Research (TMR) finds that, the intensified focus of developed countries on providing a sanitized environment to their citizens is likely to amplify opportunities for market players in the wastewater treatment sector, which is huge, since the treatment of wastewater is required in chemical industries, municipal waste treatment centers, and even in power plants.
The same opportunities are anticipated to be on the horizon in developing countries in the coming years, with increasing government initiatives taken toward ensuring proper hygiene conditions. Besides these microeconomic factors, industrialization and urbanization also play an integral part in upgrading the lifestyles of consumers, which is subsequently strengthening demand in the magnesium derivatives market space.
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Key Restraints of Magnesium Derivatives Market
Environmental sustainability concerns put enormous pressure on players in the magnesium derivatives market, given the challenge associated with the carbon emission during ore mining. Taking the poor ergonomics of magnesium mining sites into consideration, several regulations such as the Clean Air Act (CAA), National Environment Protection Act (NEPA), and Toxic Substances Control Act (TSCA) are anticipated to up the stringency level, and increase the scrutiny of mining and chemical production processes. However, producers who invest in automation to limit human interference will be safeguarded from fines or bans regarding these regulations.
Another restraint that has been identified is the availability of a large number of substitutes such as sodium hydroxide, potassium chloride, strontium carbonate, potassium chloride, and calcium chloride, which hold the potential to hamper the growth of the established magnesium derivatives market during the forecast period.
Preference for Magnesium Oxide to Remain High Over Other Derivatives
As per TMR’s study, the demand for magnesium oxide is projected to advance at a CAGR of ~5% during the forecast period. Among others, the refractory applications of this derivative, in the form of fused magnesia and dead-burned magnesia, are projected to grow at a marginal rate. This derivative, in turn, boasts of a versatile status, with the frontiers of its applications extending to the agriculture, iron and steel, pharmaceutical, water waste treatment, and construction industries.
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When the potential of magnesium oxide was recalibrated, Asia Pacific was, and is, estimated to continue being on the vanguard, with China as the leading market. The high population density demanding residential and sanitized conditions in China is likely to attract numerous market players to address the local demand in the region.
Magnesium Derivatives Market: Competition Landscape
The magnesium derivatives market lacks the dominance of a single producer. Since magnesium reserves are naturally distributed, magnesium derivatives are available in all regions in variable quantities. Leading manufacturers of magnesium derivatives operate in Asia Pacific and Europe; however, rich reserves in China makes it a leading country in the market.
The high production of magnesium derivatives in China is largely used for personal care and pharmaceutical applications. As the demand for magnesium chloride is growing, incumbents are foraying into the magnesium derivatives market with high production capacities to cater to local demand, and are further striving to differentiate their offerings by producing magnesium chloride of both, flake and prill types.
Investments in the market are primarily made to enhance production capacity. For example, Shouguang Dingsheng Chemical Co., Ltd. announced that it had set up a magnesium chloride production facility that currently holds the competency to produce flakes, with a capacity of around 20 thousand tons a year. The support of the Chinese government, in the form of funding, and the 12th Fifth Year Plan that promotes commercialization and industrialization, is likely to take the growth of the magnesium derivatives market in China forward.
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Post the compilation of resourceful insights and extensive analysis, seasoned analysts at Transparency Market Research (TMR) opine that, the magnesium derivatives market will move ahead at a steady pace. Among other derivatives, analysts recommend that, investments in the production of magnesium oxide can be considered risk-free, while a smarter switch toward the production of magnesium sulfate is projected to offer progressive RoI growth.
To win in the extant magnesium derivatives market, increased commitment toward catering to the need of refractory and flame-retardant industries can offer better penetration. Since the tight supply of magnesium derivatives can directly pass on the additional cost incurred to end-use products, an effective price-control strategy can translate into better sales prospects.
However, while venturing into new markets, it is crucial to study the regulations encircling chemical production to gain better exposure. Also, expansion of production capacity in developing countries can help in marginally reducing overall operational costs.
Magnesium Derivatives Market: Overview
- Magnesium derivatives are chemical compounds of magnesium, and include magnesium oxide, magnesium chloride, magnesium sulfate, and magnesium hydroxide.
- Among these derivatives, magnesium oxide is the one that is predominantly consumed.
- Key applications of magnesium derivatives include refractories, wastewater treatment, magnesium oxide feedstock, resin processing, flame retardants, dust suppression, de-icing, and manufacture of pharmaceutical products. Magnesium derivatives are also employed in animal feed, plastics, rubber, textile, and paper industries.
- The global magnesium derivatives market is projected to expand at a CAGR of ~5%, from a value of ~US$ 37 Bn in 2018 to ~US$ 56 Bn by the end of 2027.
Key Growth Drivers of Global Magnesium Derivatives Market
- Magnesium is a macronutrient essential for plant growth. It is a key component of chlorophyll, which plays an important role in photosynthesis. It also acts as a carrier of phosphorus. Magnesium is essential for protein formation and cell division in plants.
- Magnesium oxide is used as a source of magnesium in various fertilizers that are used in magnesium-deficient soil. Increase in the usage of ammonium and potassium fertilizers adversely affects the magnesium content of soil, and makes it magnesium-deficient, which, in turn, decreases crop yield. Magnesium-based fertilizers also reduce soil acidification by neutralizing the acidity.
- Rise in the demand for food, reduced cultivation area, growth in the demand for sulfur-free fertilizers, and increase in magnesium deficiency of soil owing to the usage of ammonia-based fertilizers are some of the key factors responsible for the high demand for magnesium oxide in the fertilizers industry.
- Magnesium oxide is widely used in wastewater treatment, as it stabilizes heavy metals and helps in acid buffering. It provides better pH control and improves metal removal. It also removes phosphorus from wastewater effectively. Rise in the number of government regulations related to industrial wastewater treatment is propelling the demand for magnesium oxide. This, in turn, is boosting the magnesium derivatives market.
- Magnesium oxide is also extensively employed in rubber & plastics, pulp & paper, sugar refining, power generation, metal precipitation, boiler & cooling water treatment, and animal feed applications. This is also estimated to augment the growth of the global magnesium derivatives market.
Key Challenges of Global Magnesium Derivatives Market
- Magnesium and its derivatives are not found in the pure state. They are found in the form of minerals such as dolomite and magnesite. These minerals are extracted through open-pit mining operations. Magnesium minerals such as dolomite are mined from underground sedimentary rocks/limestone. However, limestone is essential for maintaining the underground water table. Hence, excess mining could lead to underground water depletion.
- The quarrying of limestone increases the amount of dust in the environment due to the drilling, crushing, and screening of rocks. This dust can travel in the air from a mining site and reach urban and rural residential areas, affecting the health of individuals. Magnesium dust causes allergy to the eyes, nose, mucous membrane, and the skin. Exposure to this dust also causes coughing, sneezing, and nasal irritation. Continuous exposure to dust can also lead to tuberculosis.
- Magnesium derivatives are also obtained from brines and seawater through the electrolysis process. They can also be synthesized in laboratories. Toxic substances such as carbon dioxide (CO), dioxins, chlorinated hydrocarbons, furans, and silica-iron rejects are released during the process of magnesium extraction.
- Regulations are anticipated to become stringent in the next few years, due to increasing awareness about the hazardous effects of byproducts on the environment. Thus, rise in environment-related regulations has been adversely affecting the global magnesium derivatives market over the last few years.
- These factors are estimated to hamper the global magnesium derivatives market during the forecast period.
Lucrative Opportunities for Magnesium Derivatives Market Players
- Magnesium derivatives such as magnesium oxide are widely employed in the refractory industry to manufacture refractory materials, while magnesium chloride is utilized to manufacture refractory cement, which is used in various applications (for example, patching of incinerators and furnaces)
- Magnesite-based refractory materials are largely used in glass tank checkers, steelmaking processes, and cement and lime kilns. Increase in the demand for refractory materials in various industries is boosting the demand for magnesium derivatives.
Asia Pacific to Dominate Global Magnesium Derivatives Market
- In terms of production, China has been dominating the magnesium derivatives market in Asia Pacific since the last few years. The country is a key producer of magnesium across the world. The consumption of magnesium derivatives is high in China, India, and Indonesia.
- Germany, Russia & CIS, and countries in the Rest of Europe such as Austria and Poland are the leading consumers of magnesium derivatives in Europe.
- The U.S. is estimated to lead the magnesium derivatives market in North America during the forecast period, owing to the rise in the demand for magnesium oxide for usage in wastewater treatment and fertilizer applications.
Leading Players in Global Magnesium Derivatives Market
- Major players operating in the global magnesium derivatives market include Compass Minerals, GRECIAN MAGNESITE, Martin Marietta Magnesia Specialties, and Intrepid Potash, Inc. These companies are increasing their production capacity and expanding their portfolios of magnesium derivatives through research & development activities.
- In 2019, Afarak Group Oyj acquired Magnohrom, a Serbia-based magnesium producer, for US$ 1.2 Mn. The company purchased the mining and operation rights of its magnesium mine with a reservoir of up to 4 metric tons of ore.
Magnesium Derivatives Market – Scope of the Report
A latest study collated and published by Transparency Market Research (TMR) analyzes the historical and present-day scenario of the global magnesium derivatives market, to gauge its potential future development. The study presents detailed information about the important growth factors, restraints, and key trends that are creating a landscape for the future growth of the global magnesium derivatives market, and identifying opportunistic avenues of business potential for stakeholders. The report also provides insightful information about how the global magnesium derivatives market is expected to progress during the forecast period of 2019 to 2027.
The report offers intricate dynamics about different aspects of the global magnesium derivatives market that aid companies operating in the market in making strategic development decisions. It also includes a key indicator assessment to highlight the growth prospects of the global magnesium derivatives market, and estimates statistics related to market progress in terms of value (US$ Mn) and volume (million tons).
This study covers a detailed segmentation of the global magnesium derivatives market, along with key information and a competitive outlook. The report mentions the company profiles of key players that are currently dominating the global magnesium derivatives market, wherein, various developments, expansion, and winning strategies practiced and executed by leading players in the global magnesium derivatives market have been presented in detail.
Key Questions Answered in TMR’s Report on Magnesium Derivatives Market
The report provides detailed information about the global magnesium derivatives market on the basis of comprehensive research on various factors that are playing a key role in accelerating market growth. Information mentioned in the report answers path-breaking questions for companies that are currently functioning in the market, and are looking for innovative ways to create a unique benchmark to help them make successful strategies and target-driven decisions.
- Which type of derivative will emerge as a high revenue generator for the market during the forecast period?
- How are key market players successfully earning revenue out of the advantages of magnesium derivatives?
- What will be the Y-o-Y growth of the magnesium derivatives market between 2019 and 2027?
- What are the winning imperatives of frontrunners in the magnesium derivatives market?
- Which product is expected to develop maximum revenue for magnesium derivatives during the forecast period?
Research Methodology – Magnesium Derivatives Market
The research methodology adopted by analysts for collating the magnesium derivatives market report is based on detailed primary as well as secondary research. With the help of in-depth insights of the market-affiliated information that is obtained and legitimated by market-admissible resources, analysts have offered riveting observations and authentic forecasts of the magnesium derivatives market.
For primary research, analysts have interviewed industry stakeholders, investors, brand managers, vice presidents, and sales and marketing managers. Based on the data obtained through interviews of genuine resources, analysts have emphasized the changing scenario of the magnesium derivatives market.
For secondary research, analysts have scrutinized numerous annual report publications, white papers, industry association publications, and company websites to obtain the necessary understanding of the magnesium derivatives market.
Global Magnesium Derivatives Market – Segmentation
TMR’s research study assesses the global magnesium derivatives market based on product and its application and region. This report presents extensive market dynamics and progressive trends associated with different segments, and how they are influencing the growth prospects of the global magnesium derivatives market.
Product and its Application