Transportation challenges in major refractory‑material provinces are gradually easing.


Since the beginning of April, due to the pandemic, many areas in Shanxi Province have experienced highway congestion, truck delays, and disrupted logistics, which have had a noticeable impact on economic and social development as well as on the normal production and daily life of the public. As a major producer of refractory clay and bauxite, Shanxi’s product transportation is critical to ensuring stable supply in the refractory materials industry; its current transport challenges warrant close attention. According to interviews conducted by Refractory Materials Window with several bauxite producers, freight rates from Shanxi to Shandong typically stood at around RMB 120–140 per ton, but have now risen to RMB 220–240 per ton due to pandemic-related disruptions. In addition, the provincial Public Security Department’s Traffic Management Bureau, the Provincial Health Commission, and other relevant departments have formed 11 supervisory teams to conduct special oversight of how cities are implementing the Party Central Committee, the State Council, and the provincial Party committee and provincial government’s directives on ensuring unimpeded flow of goods and services; this effort has been incorporated into the provincial Party committee’s inspection agenda.

Since the beginning of April, due to the impact of the pandemic, many areas in Shanxi Province have experienced highway congestion, truck delays, and disruptions to logistics, which have had a notable adverse effect on economic and social development as well as on the normal order of people’s production and daily life.

As a major producer of refractory clay and bauxite, Shanxi Province plays a crucial role in ensuring the stable supply of refractory materials. Currently, its transportation challenges warrant close attention. According to interviews conducted by Refractory Window with several bauxite producers, freight rates from Shanxi to Shandong typically ranged around RMB 120–140 per ton; however, due to the pandemic, these costs have now risen to RMB 220–240 per ton.

In collaboration with the Traffic Management Bureau of the Provincial Public Security Department, the Provincial Health Commission, and other relevant departments, 11 supervisory teams have been established to conduct special oversight of how each city is implementing the work arrangements issued by the CPC Central Committee, the State Council, the Provincial Party Committee, and the Provincial Government on ensuring unimpeded transportation and smooth logistics. This effort has already been included as a key item in the Provincial Party Committee’s inspection agenda.

 

 

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Steel production has declined, and refractory material output is likely to follow the same trend in the first quarter.

According to data from the National Bureau of Statistics, in March 2022, China’s crude steel output totaled 88.295 million tons, down 6.4% year on year; for the January–March period, cumulative crude steel production reached 243.376 million tons, a decline of 10.5% compared with the same period last year. Recently, the National Development and Reform Commission and other ministries also stated that, to ensure policy continuity and stability and to consolidate gains in reducing crude steel output, nationwide efforts to cut crude steel production will continue in 2022. These measures will help achieve a year-on-year reduction in national crude steel output for 2022, guiding steel enterprises to abandon the extensive growth model focused on volume and promoting high-quality development in the steel industry. Based on crude steel production data, we can infer that refractory material output is likely to follow a downward trend as well. The main reasons are: (1) In the first quarter, overlapping environmental‑control measures during winter and spring, targeted enforcement periods, and the Lunar New Year holiday slowed the production pace of both steel and refractory manufacturers; (2) Since late February, the ongoing nationwide COVID‑19 situation, rising logistics costs, and transportation disruptions have hindered raw‑material procurement and finished‑product delivery, leading to inventory buildup for some products; and (3) Weak demand and rising production costs have kept trading activity at a subdued pace. Taking alumina—the key raw material for refractories—as an example, many alumina producers have operated at reduced capacity or with limited enthusiasm, driven by a combination of factors including higher raw‑ore prices and soaring fuel costs.

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