Pricing
Cost per Tonne – China vs Other Exporters
As of late 2023, the FOB (Free-On-Board) price of GGBS(Ground Granulated Blast Furnace Slag) in China was around $57 per tonne, while ungrounded GBFS could be as low as $7–10 per tonne. These competitive prices are driven by several factors, including lower labor and energy costs, abundant raw material availability, and efficient bulk shipment logistics.
Chinese GGBS is generally competitively priced. Moreover, the grounding rate of GBFS(Granulated Blast Furnace Slag) into GGBS in China has historically been low. As per government data, some steel producers, such as Baotou Steel, have accumulated massive stockpiles of GBFS, indicating that not all slag is being utilized for GGBS production. By 2019, Baotou Steel had a stockpile of 10 million tonnes of GBFS, which was later backfilled into mines instead of being used for GGBS. Furthermore, Baotou Steel produces 3.5 million tonnes of GBFS annually, but the local grinding capacity for GGBS is only 1.8 million tonnes per year, leading to an overall utilization rate of just 78%.
The primary reason for this low grinding rate is insufficient market demand for GGBS in China. Several factors contribute to this issue:
Geographic Mismatch: Steel production and concrete production occur in different regions, making it logistically challenging to transport GBFS to GGBS grinding facilities and end users efficiently.
Price Competition with PFA: While GGBS is much cheaper than cement, Pulverized Fly Ash (PFA) is even cheaper and more widely available, with an annual production of 831 million tonnes in China as of 2022. Since both materials are used similarly in cement and concrete production, manufacturers often choose the cheaper alternative.
Competitive Advantages in Production
Labor and Energy Costs: China’s lower labor costs and historically moderate energy costs contribute to cheaper production of GGBS. The cost to produce GGBS in China has been estimated around $10–13 per tonne (for S95 grade) due to inexpensive raw slag and efficient processes.
Raw Material Availability: China has vast reserves of GBFS due to its large steel production industry. However, utilization remains a challenge due to limited local grinding capacity and demand constraints.
Logistics Efficiency: Chinese ports and logistics companies are highly experienced in bulk shipments of commodities, often enabling efficient loading and large vessel use, reducing per-tonne shipping cost.
Quality Standards
Domestic Market Standards
While leading Chinese GGBS suppliers adhere to ASTM C989 and EN 15167, the domestic market has faced quality control challenges. The lack of strict regulatory enforcement has led to concerns about adulteration, as some manufacturers mix substandard materials into GGBS to increase profit margins. A report from the China Concrete and Cement-based Product Association highlighted several industry issues:
"There are still some problems in my country's cement industry that need to be urgently addressed: 1) Adulteration is serious. The tolerance for counterfeit and low-quality cement is zero in developed countries, but it occurs frequently in China; 2) Lack of regulatory enforcement; 3) Lack of traceability for raw materials, making it difficult to pinpoint causes of engineering failures."
"The most serious problem in regional GGBS markets is ‘chaos’, with widespread adulteration of products and price competition leading to poor quality control."
Production Technology & Raw Material Sources
China has modern grinding technology, but underutilization of GBFS means that many grinding plants operate below capacity. Due to inconsistent demand, some non-steel enterprises struggle to secure high-quality GBFS, leading to potential issues with purity and consistency in GGBS products.
Despite these concerns in the domestic market, we ensure that we work exclusively with top-tier providers whose quality is verified by the China Concrete and Cement Product Association and recognized by industry experts such as Dr. Tongbo Sui. These reputable suppliers adhere to strict quality control measures, ensuring that exported GGBS meets international standards for strength, composition, and durability. By sourcing from these trusted producers, we can guarantee consistency and reliability in our GGBS supply, mitigating risks associated with lower-quality providers in the domestic market.
Supply Chain Reliability
Production Capacity and Availability
Despite China's large cement and steel industry, not all GBFS is processed into GGBS. Due to limited market demand, a significant portion of GBFS is either stockpiled, backfilled into mines, or used as aggregate—none of which contribute to carbon reduction benefits. For instance, using GBFS as aggregate does not reduce CO₂ emissions since the carbon footprint of natural aggregates is already minimal.
While China has the infrastructure to scale up GGBS production, current domestic demand is insufficient to drive up grinding rates. In fact, demand for GGBS in China has declined further since the implementation of the latest General Portland Cement standard (GB175-2023) in June 2023. According to industry reports, 60% of GGBS suppliers reported a significant drop in sales following the new regulation.
Export Regulations and Trade Policies
Given the low domestic demand, China has an incentive to export more GGBS, but logistical and regulatory challenges persist. Government approvals for new GBFS stockpile yards suggest that much of the GBFS remains unused rather than being processed into GGBS. Unless demand increases, China may continue to see excess GBFS storage instead of significant export growth.
Market Growth Potential
If market conditions improve, China could gradually increase GGBS consumption. A realistic scenario could involve raising GGBS demand by 20 million tonnes per year over five years, eventually closing the supply-demand gap. However, during this transition period, hundreds of millions of tonnes of GBFS that could have been turned into GGBS will still be wasted.
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