Bentonite is a highly competitive and versatile material, obtained by open pit mining of smectite minerals, mostly montmorillonite, and used in various applications, including foundry molding sands, iron ore pelletizing, pet litter, drilling mud (the preceding four are predominant end-uses in global terms), civil engineering, water purification, animal feed supplements, etc.
The demand for bentonite by end-use witnessed certain changes from 2004 to 2014. The demand grew mainly overall, thus keeping the bentonite consumption structure almost intact, though vivid increases occurred in bentonite main application areas – foundry sands, pelletizing of iron ore, pet litter, and drilling fluids. The sectoral demand varies region by region. For instance, the largest sectors of demand for bentonite in North America are foundry sands, pelletizing of iron ore, pet litter, and drilling fluids. Similar picture is witnessed in Europe, with the only exclusion of the drilling mud sector which is poorly represented in Europe. In Asia, bentonite consumption by sector is different and is dominated by such end-uses as foundry sands, iron ore pelletizing and civil engineering. In Central and South America, the pelletizing sector is a clear winner. The European Commission report on critical raw materials provides substitutability scores for bentonite. These scores confirm that in many applications bentonite could be hardly substituted. Especially strong bentonite positions are evident in the absorbent sector with a substitutability score of 0.3.
Substitutability scores for bentonite (source: European Commission)
There are all grounds to ascertain that the future bentonite demand structure might change, but this change will have a cyclical nature and will follow the behavioral cycles of energy, resources, housing, and macroeconomic environment in general. In short- and middle-term perspective, the demand for bentonite in drilling mud applications will increase. So will the demand for bentonite in iron ore pelletisation.
The future scenarios of bentonite demand in other sectors look less predictable. However, as it was mentioned previously, the changes in bentonite demand will be cyclical and fluctuate subject to various factors, including macroeconomic conditions, availability of substitutes, technological innovations, state regulation, and many others.
The clear recommendation for companies operating on the bentonite market in such uncertain conditions is to diversify its bentonite-containing products, give them additional value (by upscaling products themselves, but also services, technologies, and management practices) and develop, or at least keep track of, recent innovations in relevant fields.
More information on the bentonite market can be found in the insightful research study “Bentonite: 2015 World Market Review and Forecast”.