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  • Refractories ManufacturingNESHAP: Industry Profile,

    Methodology, and EconomicImpact Analysis

    Draft Report

    Prepared for

    Lisa ConnerU.S. Environmental Protection Agency

    Office of Air Quality Planning and StandardsInnovative Strategies and Economics Group (MD-15)

    Research Triangle Park, NC 27711

    EPA Contract Number 68-D-99-024

    RTI Project Number 7647.002.138

    March 2001

  • EPA Contract Number RTI Project Number68-D-99-024 7647.002.138

    Refractories ManufacturingNESHAP: Industry Profile,

    Methodology, and EconomicImpact Analysis

    Draft Report

    March 2001

    Prepared for

    Lisa ConnerU.S. Environmental Protection Agency

    Office of Air Quality Planning and StandardsInnovative Strategies and Economics Group (MD-15)

    Research Triangle Park, NC 27711

    Prepared by

    Katherine B. HellerA. Michelle Bullock

    Research Triangle InstituteCenter for Economics Research

    Research Triangle Park, NC 27709

  • DRAFT

    iii

    CONTENTS

    Section Page

    1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1

    2 The Supply Side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1

    2.1 Production Process, Inputs and Outputs . . . . . . . . . . . . . . . . . . . . . . . . 2-12.1.1 Machines Used in the Production Process . . . . . . . . . . . . . . . . . 2-4

    2.1.1.1 Mixing/Kneading Machines . . . . . . . . . . . . . . . . . . . . 2-42.1.1.2 Presses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-42.1.1.3 Kilns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-7

    2.1.2 Final Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-82.1.2.1 Shaped Refractories . . . . . . . . . . . . . . . . . . . . . . . . . . 2-82.1.2.2 Unshaped Refractories . . . . . . . . . . . . . . . . . . . . . . . . 2-8

    2.1.3 Emissions and Controls in Refractory Manufacturing . . . . . . . 2-102.1.3.1 PM and Metals Emissions . . . . . . . . . . . . . . . . . . . . . 2-102.1.3.2 Gaseous and VOC Emissions . . . . . . . . . . . . . . . . . . 2-10

    2.1.4 Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-102.1.4.1 Clays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-102.1.4.2 Nonclays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12

    2.2 Types of Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12

    2.3 Costs of Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-122.3.1 Cost Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12

    2.4 Supply Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-14

    3 The Demand Side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

    3.1 Product Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

    3.2 Uses and Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

    3.3 Substitution Possibilities in Consumption . . . . . . . . . . . . . . . . . . . . . . . 3-4

  • DRAFT

    iv

    4 Industry Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

    4.1 Refractory Manufacturing Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14.1.1 Refractories Database Facilities . . . . . . . . . . . . . . . . . . . . . . . . . 4-14.1.2 Facility Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

    4.2 Capacity Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9

    4.3 Industry Concentration and Market Structure . . . . . . . . . . . . . . . . . . . 4-114.3.1 Measures of Industry Concentration . . . . . . . . . . . . . . . . . . . . 4-124.3.2 Market Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13

    4.4 Current Trends in the Refractory Industry . . . . . . . . . . . . . . . . . . . . . . 4-13

    5 Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1

    5.1 Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-15.1.1 Domestic Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-15.1.2 International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1

    5.2 Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-3

    5.3 Industry Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-4

    References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-1

  • DRAFT

    v

    LIST OF FIGURES

    Number Page

    2-1a Refractory Manufacturing Process Flow Diagram . . . . . . . . . . . . . . . . . . . . . . . 2-22-1b Specific Production Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-32-2 Scheme of Mixer and Kneading Machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-52-3 Vacuum Press (Friction, Hydraulic Press) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-62-4 Friction Press (A), and Hydraulic Screw Press (B) . . . . . . . . . . . . . . . . . . . . . . 2-62-5 Vibrating Press . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-62-6 Cross Section of CIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-62-7 Tunnel Kiln . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-72-8 Round Kiln and Downdraft System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-82-9 Shuttle Kiln . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-8

    4-1 Location of Refractory Manufacturing Facilities . . . . . . . . . . . . . . . . . . . . . . . 4-10

  • DRAFT

    vi

    LIST OF TABLES

    Number Page

    2-1 Types and Descriptions of Refractories Produced . . . . . . . . . . . . . . . . . . . . . . . 2-92-2 Types and Characteristics of Raw Materials used in Refractory

    Manufacture Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-112-3 Labor, Material, and New Capital Expenditures for Clay Refractory

    Manufacturers (NAICS 327124) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-132-4 Labor, Material, and New Capital Expenditures for Nonclay

    Refractory Manufacturers (NAICS 327125) . . . . . . . . . . . . . . . . . . . . . . . . . . 2-142-5 Costs of Materials Used in Refractory Production and Manufacture . . . . . . . 2-16

    3-1 Characteristics and Types of Refractories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-23-2 Steel and Nonferrous Production (103 Metric Tons) . . . . . . . . . . . . . . . . . . . . . 3-4

    4-1 Selected Refractory Manufacturers, by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-24-2 Number of Refractory Manufacturing Facilities by State . . . . . . . . . . . . . . . . . 4-94-3 Full Production Capacity Utilization Rates for Clay and Nonclay

    Refractories: Fourth Quarters 1993 through 1998 . . . . . . . . . . . . . . . . . . . . . 4-114-4 Market Concentration Measures for SIC 3255 Clay Refractory

    Manufacturing and SIC 3297 Nonclay Refractory Manufacturing . . . . . . . . . 4-12

    5-1 Production of Refractories: 19771998 ($106) . . . . . . . . . . . . . . . . . . . . . . . . . 5-25-2 Exports and Imports of Refractories: 19931999 ($106 1998) . . . . . . . . . . . . . 5-35-3 Average Price for Refractory Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-3

  • DRAFT

    1-1

    SECTION 1

    INTRODUCTION

    The U.S. Environmental Protection Agencys (EPAs) Office of Air Quality Planning

    and Standards (OAQPS) is compiling information on refractory manufacturing plants as part

    of its responsibility to develop National Emission Standards for Hazardous Air Pollutants

    (NESHAP) under Section 112 of the 1990 Clean Air Act. The NESHAP is scheduled to be

    proposed in 2001. This industry profile of the refractory manufacturing industry provides

    information to support the regulation.

    A refractory is a material that retains its shape and chemical identity when subjected

    to high temperatures and is used in applications that require extreme resistance to heat.

    Specifically, refractories must be able to withstand temperatures above 538C (1,000F).

    Refractories are mechanically strong and heat resistant to withstand rapid temperature

    change and corrosion and erosion by molten metal, glass, slag, and hot gas. Refractories are

    used in kilns, furnaces, boilers, incinerators, and other applications.

    Refractory manufacturing falls under the North American Industry Code System

    (NAICS) 327124 for clay refractories and NAICS 327125 for nonclay refractories.

    According to the 1997 Census of Manufactures, 149 establishments owned by 115

    companies manufactured clay refractories, and 124 establishments owned by 90 companies

    manufactured nonclay refractories in 1997 (U.S. Department of Commerce, 1999b, 1999c).

    In 1998, the refractory