TiO2 China Monthly Report

                                          Vol.2 Issue 12. 2009

  Copyright © CCM Internatio...
TiO2 China Monthly Report                                                                               Vol.2 Issue 12.200...
TiO2 China Monthly Report                                                             Vol.2 Issue 12.2009

TiO2 China Monthly Report                                                                                                 ...
TiO2 China Monthly Report                                                                                           Vol.2 ...
TiO2 China Monthly Report                                                                                      Vol.2 Issue...
TiO2 China Monthly Report                                                                                   Vol.2 Issue 12...
TiO2 China Monthly Report                                                                                  Vol.2 Issue 12....
TiO2 China Monthly Report                                                                                       Vol.2 Issu...
TiO2 China Monthly Report                                                                                              Vol...
TiO2 China Monthly Report                                                                                      Vol.2 Issue...
TiO2 China Monthly Report                                                                                        Vol.2 Iss...
TiO2 China Monthly Report                                                                                      Vol.2 Issue...
TiO2 China Monthly Report                                                                                   Vol.2 Issue 12...
TiO2 China Monthly Report                                                                                         Vol.2 Is...
TiO2 China Monthly Report                                                                                                 ...
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Titanium dioxide China News Sample - Published by CCM International Ltd


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Titanium dioxide China News is a monthly report with 12 issues per annum published by CCM International Limited. It's your gateway to know what is happening in China Market. Key columns include supply & demand, upstream, company dynamic, downstream,price update, policy & legislation, special report,etc. If you are interested in this newsletter or ask for the latest sample, please contact emarket10@cnchemicals.com or 86-20-38767072.

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Titanium dioxide China News Sample - Published by CCM International Ltd

  1. 1. TiO2 China Monthly Report Vol.2 Issue 12. 2009 Copyright © CCM International Limited
  2. 2. TiO2 China Monthly Report Vol.2 Issue 12.2009 Supply & Demand 1 China’s TiO2 trade in October 1 ISK’s TiO2 distribution in China 2 Upstream 3 Titanium resource draws wide attention 3 TiO2 industry is expected to enjoys ample sulfuric acid supply in the long-term 4 Huge new mining resource to be proved 4 Titanium metal industry sets target for 12th Five Year 5 Ching-Hing acquires titanium mining right 5 Company Dynamic 5 Jinan Yuxing to start rutile TiO2 pilot production 5 Pangang Titanium’s rutile TiO2 output hits new record 5 Rutile TiO2 competition to be intensified 6 Downstream 7 Furniture coating to boost TiO2 consumption 7 Indian coating industry boosts TiO2 consumption 8 Yip’s Chemical achieves huge profit growth in coating 8 Price Update 8 Price update in December 2009 8 Policy & Legislation 10 Policy interpretation related to TiO2 industry 10 -- By Liu Changhe 10 Raised transport cost curbs TiO2 price downturn 10 China continues tariff-free titanium slag import 11 Special Report 11 Review of Chinese TiO2 industry 2009 11 ----- policy, raw material, production 11 Profitability to shrink in Q1 2010 12 Latest reports related to TiO2 from CCM - Production and Market of Masterbatch in China Made in July 2008 - The Survey of Titanium Dioxide in China-3rd Edition Published in April 2009 - The Future of Carbon Black in China The second edition was made in June 2008. - Production and Market of Pigment in China The second edition was made in June 2008. Trade Report of product related to TiO2 from CCM: - Titanium Dioxide Production and Trade in China 2007 - - Commodity Titanium Dioxide in China June.2009 The third edition was made in June 2008. CCM coming newsletter related to TiO2 - Specialty Titanium Dioxide in China - Inks China News The third edition was made in June 2008. Contact us for details of the researches in year 2009 from CCM. 2 CCM International Limited www.cnchemicals.com
  3. 3. TiO2 China Monthly Report Vol.2 Issue 12.2009 Editor Note Headlines of TiO2 China Monthly Report 0912 Welcome to the December issue of the TiO2 China Monthly Report. • China’s TiO2 imports show steady growth, while exports decline in October. The domestic TiO2 industry has recovered rapidly from the financial crisis in H1 2009, has • As an essential raw material of TiO2, the experienced ,thanks to a series of supporting gradually exhausted titanium resource with rising policies released by the government, a rebound value is attracting wide attention in China. in growth in H2 2009. • The TiO2 industry enjoys an ample supply of On November 26th, 2009, China’s State sulfuric acid, which is expected to continue for Council has set its target on carbon emission five to ten years. reduction that China will cut its 2005 unit carbon emission of GDP by 40%~45% by the • China’s rutile TiO2 capacity is expected to end of 2020. As a 2H1R industry (resource- soar next year, which will intensify domestic based industries with high energy consumption competition. and heavy pollution), the TiO2 industry will be forced to become more environmentally • Chinese furniture coating is to boost TiO2 friendly as it confronts stricter environmental consumption, which drives Huihuang Xiangying protection requirements. to expand production scale. With TiO2 demand entering a slack season, • China is likely to promulgate Standards for Tax TiO2 price weakened starting in November Rebate of TiO2 Export and Entry Criteria for 2009 and will keep this downtrend throughout TiO2 Production soon. Q1 2010. TiO2 capacity expansion will continue in 2010 in China, especially for rutile • Boosted by supporting policies, China’s TiO2 TiO2, which will intensify industry competition production has recovered rapidly by the end of . Coupled with rising production costs, this 2009, drawing wide attention. will cause manufacturers’ profitability to shrink. However, as a consequence the TiO2 • TiO2 profitability is expected to shrink in Q1 industry may gain more government support 2010 with price downturn. such as resumption of a tax rebate for export next year. The capacity expansion will certainly boost Main companies covered in this issue titanium ore demand, which is in increasingly tight supply. This has drawn wide attention from related producers. However, TiO2 industry will enjoy ample supply of another raw material, namely sulfuric acid, for five to ten years. 3 CCM International Limited www.cnchemicals.com
  4. 4. TiO2 China Monthly Report Vol.2 Issue 12.2009 Supply & Demand China’s TiO2 trade in October C hina’s TiO2 import and export trends have diverged in October, with import volume steadily increasing, while The booming real estate industry and automobile industry have driven, and will continue to drive coating, plastic and export volume decreased. papermaking (mainly decor paper) consumption upward. It is worth noting that TiO2 for some particular end-use sectors Thanks to the stable demand and the negotiable price (despite is mainly imported from a few manufacturers. For instance, several price hikes announced by multinational importers), 95% imported TiO2 for papermaking in 2009 is produced by TiO2 import volume in October hit a record high for the past DuPont in Mexico (TABLE 1). three years of 25,099 tonnes, up 2.1% over this September. However, owing to weak imports in Q1 2009, the cumulative TABLE 1: China’s TiO2 import situation by end use sector, 2007-Oct. import volume in the first ten months of 2009 is still lower than that in the same period of 2008. 2009, tonne Segment Jan- Nov- Jan-Oct Nov- Jan- TiO2 export volume in October declines by 13.4% over Oct 07 Dec 07 08 Dec 08 Oct 09 September, only amounting to 12,883 tonnes. The export Coating 53,670 10,398 50,090 6,224 49,388 volume downtrend is caused by continually rising export price Plastic 41,998 7,987 38,256 5,097 31,295 in October. Despite the downtrend, cumulative export volume Rubber 12,589 2,415 14,134 1,836 6,692 by October in 2009 has seen a remarkable 41.6% growth year Fiber 13,569 2,588 11,919 1,603 5,657 on year. Papermaking 5,607 1,700 7,920 1,280 6,600 Ink 1,348 324 1,800 196 1,581 In the autumn, domestic TiO2 manufacturers tried to narrow Leather 1,345 174 987 427 617 the gap between import price and export price by continually Cosmetics 207 45 246 28 616 raising export price. Average export price rose 5.0% in Food 87 180 1,187 0 358 October, following a 3.7% increase in September. Average import price declined slightly in October, despite several Other 1,725 473 1,678 152 1,854 rounds of announced price hikes, as consumers refused to Rutile (Uncertain 106,831 21,253 102,550 12,348 100,681 application) accept the increases (FIGURE 1). Anatase(Uncertain 6,546 1,188 3,241 473 2,500 application) Import growth stable Source: China Customs, CCM International As predicted previously (See issue 0911, page 1 ), China’s TiO2 imports keep increasing in Q4 2009. There is an obvious TiO2 import volume increase from Australia and Mexico because of their product’s price Encountering consumer resistance to price hikes in China; advantage, while imports from U.S. and Japan decrease a lot many TiO2 multinationals adopted flexible prices in actual (TABLE 2). With the establishment of CAFTA from January deals to maintain their market position. With a rising 2010 that enables free tariff for TiO2 trade between China domestic operating rate, TiO2 supply in China is ample and and ASEAN countries, TiO2 imports from Malaysia and competition is intense. Accordingly, the average import price Singapore will increase in the future. of TiO2 decreased by USD48/t over September. In the coming months, China’s TiO2 demand will remain FIGURE 1: China’s TiO2 trade situation, Jan. 2007-October 2009 robust, which will certainly drive up TiO2 imports. The strong demand, 35,000 3,000 coupled with DuPont’s announced price hike, which has been in effect in 30,000 Asia since December 1st, 2009, will 2,500 provide room for import prices to rise, 25,000 in the coming months, though the 2,000 extent might not be large . Volume, tonne Price, USD/t 20,000 1,500 Exports Decline --Export Price 15,000 Increases Reduce Chinese Export 1,000 Volume in October. 10,000 5,000 500 Driven by increasing global price and booming domestic demand, 0 0 some Chinese TiO2 manufacturers have initiated TiO2 price increases 07 08 07 08 09 Se 7 Se 8 9 7 8 9 07 08 09 7 8 9 l-0 l-0 l-0 -0 -0 -0 -0 -0 -0 v- v- n- n- n- in October, especially large p- p- p- ay ay ay ar ar ar Ju Ju Ju No No Ja Ja Ja Se M M M M M M manufacturers, such as Shandong Import Export Import price Export price Dongjia and Henan Billions. Accordingly, average export price of TiO2 in October rose by USD77/t over Source: China Customs, CCM International September, leading to 13.4% decline in export volume. 1 CCM International Limited www.cnchemicals.com
  5. 5. TiO2 China Monthly Report Vol.2 Issue 12.2009 It is worth noting that some TiO2 TABLE 2: China’s TiO2 import situation by origin, 2007-Oct. 2009, tonne manufacturers who initiated the price hike Origin Jan-Oct 07 Nov-Dec 07 Jan-Oct 08 Nov-Dec 08 Jan-Oct 09 have not experienced a volume decline Taiwan 66,645 13,521 59,640 5,737 56,617 as they have endeavored to explore new global markets. Take Shandong Dongjia Australia 48,983 9,015 46,510 4,957 52,076 for example, its average export price U.S. 33,971 6,191 41,612 7,456 29,780 increased by USD62/t and export volume Japan 35,861 6,191 31,776 3,283 22,881 increased slightly to 1,094 tonnes in Germany 13,096 2,660 10,819 1,681 7,669 October. Mexico 5,359 1,650 9,100 2,000 9,240 Malaysia 8,296 1,288 6,661 393 7,093 Though total export volume obviously UK 2,818 781 6,501 301 5,894 declined, the export value shows a Singapore 7,035 1,527 3,172 1,358 6,126 relatively modest decline of only 9.1%, Saudi Arabia 9,207 2,587 7,783 1,280 5,013 because of the price hike. Accordingly, Other 14,251 3,312 10,433 1,218 5,448 domestic manufacturers might continue Source: China Customs, CCM International to raise export prices given the booming domestic market. Meanwhile, domestic manufacturers are seeking to enhance competitiveness TABLE 3: China’s TiO2 export situation by destination, 2007-Oct. 2009, tonne by improving product quality Region Jan-Oct 07 Nov-Dec 07 Jan-Oct 08 Nov-Dec 08 Jan-Oct 09 instead of relying solely on Volume Share Volume Share Volume Share Volume Share Volume Share price based competition. Africa 2,255 1.45% 422 1.86% 2,249 2.62% 622 5.25% 3,074 2.53% Asia Asia Pacific has been the main 64,948 41.77% 10,136 44.66% 37,652 43.82% 5,739 48.41% 62,713 51.56% Pacific export destination of Chinese Europe 34,402 22.13% 3,852 16.97% 16,279 18.95% 1,367 11.53% 11,545 9.49% TiO2. Domestic manufacturers Middle will continue to consolidate 17,027 10.95% 2,375 10.47% 8,347 9.72% 667 5.63% 12,225 10.05% East current market share in Asia North Pacific and make effort to 25,025 16.10% 4,042 17.81% 14,194 16.52% 2,757 23.25% 20,332 16.72% America exploit new markets in other South regions (TABLE 3). 11,816 7.60% 1,867 8.23% 7,196 8.38% 704 5.94% 11,750 9.66% America Source: China Customs, CCM International Despite implementing the largest export price increases, TABLE 4: Export situation of China’s TiO2 manufacturers, 2007-Oct. 2009, tonne Henan Billions has surpassed Sichuan Lomon to be the largest TiO2 exporter Manufacturer Jan-Oct 07 Nov-Dec 07 Jan-Oct 08 Nov-Dec 08 Jan-Oct 09 by October 2009. It has not only Henan Billions 7,007 1,217 15,410 2,080 17,285 consolidated its share in major markets Sichuan Lomon 21,522 3,935 6,573 1,005 16,938 such Turkey and Italy, where it now has Shandong Dongjia 20,443 2,151 3,990 775 10,805 the largest share amongst importers , Guangxi Jinmao 4,721 659 4,732 493 8,467 but Henan Billions has also made great Wuxi Haopu 1,766 386 1,344 191 5,934 efforts to exploit new markets world- Guangxi Yazhao 6,861 1,009 6,500 361 5,166 wide. By October, Henan Billions’ sales Zhenjiang Titanium 9,393 657 1,677 381 4,295 network has covered over fifty countries Pangang Group 10,781 1,111 2,596 269 4,359 or regions worldwide. Shanghai Jianghu 2,855 431 3,398 210 4,202 Pinggui Feidie 4,477 795 3,663 662 3,904 China’s TiO2 export is expected to keep Other 65,647 10,343 36,036 5,429 40,285 stable with a more profitable price. Source: China Customs, CCM International ISK’s TiO2 distribution in China FIGURE 2: Distribution channels of ISK’s TiO2 in China, Jan.-Oct.2009 I shihara Sangyo Kaisha Ltd. (ISK) has had 13.9% of China’s TiO2 import market during Jan. - Oct. 2009, with import volume amounting to 28,987 tonnes during this period. Most of ISK’s total import volume (78.9%) End user comes from Japan, as ISK’s R-930 production in Japan is 23.50% specially developed for Chinese consumers, and the rest is from its Singapore plant. ISK has set up strategic cooperation with a local trade Trader company, Hangzhou Harmony Chemical Raw Material Co, 76.50% Ltd. (Harmony Chemical), to develop its business in China. This has indeed helped ISK expand its Chinese market share. Source: China Customs, CCM International Fifty five percent of ISK’s TiO2 business in China was through Harmony Chemical by October 2009. 2 CCM International Limited www.cnchemicals.com
  6. 6. TiO2 China Monthly Report Vol.2 Issue 12.2009 Upstream Titanium resource draws wide attention A s an essential raw material for TiO2 production, titanium ores are being depleted. This has boosted By 2009, the proven titanium reserves in Panzhihua City have been dominated by a few companies, mainly Pangang Group, ore values, and has drawn wide attention from firms both Sichuan Lomon, and Hongda Group. inside and outside the TiO2 industry. High grade titanium ore can contribute to the quality of TiO2 At present, the domestic recovery rate of titanium ore is because of its lower level of impurities, which can improve estimated at 15% which is quite low. Current domestic TiO2 quality. To pursue long-term development, titanium titanium ore mining and refining capacity cannot meet ore holders with stronger vertical integration capability will domestic demand, resulting in China’s annual imports of be able to more effectively raise the recovery rate, or yield, of titanium ore of over one million tonnes, or about 50% of titanium ore and improve TiO2 quality, compared to smaller domestic demand. players. In early 2009, QIT-Fer et Titane Inc. (QIT), one of the world’s Facing limited titanium resource, TiO2 manufacturers would largest titanium slag manufacturers and a wholly owned make efforts to raise the recovery rate in order to realize subsidiary of Rio Tinto, suspended its titanium resource TiO2 industry’s sustainable development. Meanwhile, TiO2 exploitation and titanium slag production in Canada for eight manufacturers can utilize more high-grade titanium ore, weeks from July 12 to September 8, 2009. which can help them improve TiO2 quality to some extent. Likewise, to maximize titanium resource value, private Import volume of titanium slag from Canada decreased to investors will also work hard to raise recovery rate of titanium 7,365 tonnes in first eight months of 2009 from 34,214 tonnes resource. in the prior year. QIT’s supply reduction pushed up import prices of titanium slag from Canada into China during that With the importance of titanium resource widely known period, thus leading to higher production costs for Chinese and more funds injected, titanium resource recovery rate industry... is expected to be raised, which will benefit the long-term development of the TiO2 industry. For example, Panzhihua The heavy dependence on imported titanium feedstocks has government has aimed to raise the recovery rate to 65% put domestic feedstock consumers in a vulnerable position, by 2020. In the future, with the rising recovery rate and arousing increasing concerns about the availability of expanding exploitation capacity, domestic titanium ore titanium feedstocks. In addition, depleted ore reserves, and supply will meet the entire domestic demand, as China holds soaring growing demand indicate significant potential for 35% of world’s titanium reserves. value appreciation of titanium ore reserves. Therefore, many private investment funds are attracted to invest in TABLE 5: TiO2 manufacturers with their own titanium resource, 2009 this field. Company Reserves For instance, China VTM Mining raised funds through Pangang Group Baima Mining: 1.5 billion tonnes (average becoming listed in Hong Kong, in order to expand its grade 6.2%) titanium ore exploitation and titanium slag production (See Panzhihua Mining: 1.3 billion tonnes (average issue 0910, page 6), and Ching-Hing shifted to titanium grade 12%) ore exploitation through acquiring Greater China Mining Sichuan Lomon Northern area of Hongge Mining: 2.0 billion tonnes (average grade 11%)* Resource Limited (See issue 0911, page 9), etc. Yunnan Dahutong Yunnan Fuming County Additionally, Hongda Group, China’s third largest Shandong Dongjia Hebei Chengde City electrolytic zinc company, in August 2008, has set up Fumin Longteng Titanium Yunnan Fuming County a joint venture with other nine companies including Note: *Southern area of Hongge Mining is captured by Hongda Group Panzhihua Gangcheng Group Co, Ltd, Panzhihua Jinjiang (2.0 billion tonnes*11% grade) Titanium Co, Ltd, etc. It claimed that over USD 3.22 Source: CCM International billion will be injected in this joint venture to exploit ores containing titanium in the southern area of Hongge Mining, Panzhihua City. Some domestic TiO2 manufacturers have also begun to work hard on developing more titanium ore reserves. For example, Pangang Group plans to acquire titanium mining exploitation rights in New Zealand by cooperating with New Zealand Steel Mining Limited. Yunnan has started up a new TiO2 plant and a titanium slag plant in Panzhihua City, Sichuan Province, to utilize local Ti ore resources, even though it already has titanium exploitation rights in Yunnan Province. Some new entrants also have their own captive titanium mines, such as Fumin Longteng Titanium Co., Ltd . (TABLE 5) 3 CCM International Limited www.cnchemicals.com
  7. 7. TiO2 China Monthly Report Vol.2 Issue 12.2009 TiO2 industry is expected to enjoys ample sulfuric acid supply in the long-term Y unfu Pyrite Enterprise Group Corporation (Yunfu Pyrite) started pilot production of its 400,000t/a of nearly 70 million t/a, shared by pyrite-based sulfuric acid (31.3%), sulfuric acid through sulfur-burning (38.7%) and sulfuric acid production line on November 25th, 2009. by product sulfuric acid from smelting gas (28.7%). By 2012, This production line using pyrite as raw material is one of China’s sulfuric acid capacity is expected to reach 90 million the largest production lines in China. t/a, with pyrite-based sulfuric acid increasing by 8 million tonnes, sulfur-burning sulfuric acid by 5 million tonnes and After the formal launch, Yunfu Pyrite, located in Yunfu City, smelting gas sulfuric acid by 7 million tonnes. will supply its sulfuric acid to Yunfu Huiyun Titanium Dioxide Co, Ltd. (Huiyun Titanium) that has anatase TiO2 capacity of TiO2 manufacturers are to benefit greatly from the expected 15,000t/a; and is to launch 30,000t/a rutile TiO2 production abundant sulfuric acid supply. TiO2 Price is expected to line in 2010. Huiyun Titanium will consume 200,000 tonnes continue an uptrend for the foreseeable future and thus TiO2 sulfuric acid in TiO2 production annually by the end of 2010. manufacturers will improve their profitability with a stable Meanwhile, Huiyun Titanium is to set up 200,000t/a sulfuric sulfuric acid cost. acid production line. Hence, Huiyun Titanium can enjoy plenteous sulfuric acid supply for its TiO2 production. Huge new mining resource to be proved The situation with Huiyun Titanium is emblematic of the whole TiO2 industry, which is beginning to experience loosenting sulfuric acid supply. This situation is expected to continue for five to ten years. O n December 2nd, 2009, Panzhihua City held a ceremony for initiating prospecting of vanadium titano-magnetite ore resource in Panzhihua-Xichang The following factors account for the long-term abundant Region (Panxi Region). supply of sulfuric acid to the TiO2 industry. According to Sichuan Bureau of Geology and Mineral Firstly, raw material for sulfuric acid production is rich. Exploration and Development, the reserves of vanadium According to Sulfur 2009 International Conference and titano-magnetite ore resource in Panxi Region is expected Exhibition held during November 8th-11th, 2009, in to increase by an estimated amount of up to 19 billion Vancouver, Canada, global sulfur supply will exceed demand tonnes valued at USD1,669 billion based on current price of for the next ten years, which helps to reduce the production vanadium titano-magnetite ore. If the new reserve is proved, cost sulfuric acid manufactured from burning sulfur. Global total titanium resource ore reserve volume (about 10% of the sulfur supply is expected to increase from 48 million tonnes total vanadium titano-magnetite ore) will triple to 1,9 billion in 2008 to 70 million tonnes in 2017, which might lead to a 15 tonnes o, thus promoting local TiO2 industry development in million tonnes surplus by then, according to Mr. Clark from the future. the Alberta Sulfur Research Center. The prospecting is expected to be finished in the coming In addition, the nonferrous smelting industry will continue to three to five years. drive increased production of sulfuric acid from smelting gas. In general, producing one tonne nonferrous metals produces Early in May 2009, Panzhihua City has made its mid-range about three tonnes sulfuric acid. With the fast growth of the plan by 2020 for vanadium titanium industry, in which it nonferrous smelting industry, China’s sulfuric acid output has is stated that Panzhihua government will invest USD39.98 doubled from 2003 to 2008. According to the multi-national billion in establishing a vanadium-titanium industrial mining and smelting firm Anglo-American, China will lead cluster that can generate USD41 billion (RMB280 billion) development of global nonferrous smelting for the next ten sales revenue by 2020, as well as in raising recovery rate of years, especially for copper smelting. vanadium from 47% to 55%, and that of titanium from 14% to 25%. Capacity expansion of sulfuric acid with smelting gas helps sulfuric acid price avoid the influences from sulfur price fluctuation which are mainly caused by the price fluctuations of crude oil. Secondly, the fertilizer industry, the main downstream consumer of sulfuric acid, will not see growth in demand for sulfuric acid. Generally, sulfuric acid used in fertilizer consumes 60-70% of the total national acid production. China’s fertilizer industry has suffered from redundant construction and will enter a period of slow expansion. By the end of 2008, excess capacity of phosphate fertilizer and urea reached 13 million tonnes and 9 million tonnes respectively. Owing to fertilizer overcapacity, sulfuric acid consumption in fertilizer will not see significant growth. Hence, sulfuric acid price is expected to remain stable for a long time to come. By the end of 2008, China had annual sulfuric acid capacity 4 CCM International Limited www.cnchemicals.com
  8. 8. TiO2 China Monthly Report Vol.2 Issue 12.2009 Titanium may be no new titanium sponge capacity in the Company Dynamic metal industry coming five years. pollution to Xiaoqing sets target for River. As scheduled, Jinan 12th Five Year Hence, demand for titanium Jinan Yuxing to Yuxing starts relocation at ore in titanium sponge start rutile TiO2 the end of December and C hina Nonferrous Metals Industry production will not see any major increase and titanium pilot production will formally launch rutile TiO2 production in the new A Association (CNMIA) sets ore consumption will ccording to Jinan location in Q1 2010. its development target for continue to be concentrated Yuxing General titanium sponge during in TiO2 production. In Chemical Plant (Jinan Before the relocation, Jinan the 12th Five Year Plan general, titanium sponge Yuxing), it will start pilot Yuxing had capacity of production utilizes high Ti production for its new 20,000t/a for rutile TiO2 and According to the target, content titanium slag (TiO2 rutile TiO2 production line 10,000t/a for anatase TiO2. CNMIA aims to keep content higher than 90%) as with first phase capacity of national total capacity of raw material and consumes 100,000t/a in December Jinan Yuxing plans to invest titanium sponge below about 10% of all titanium 2009. in the second phase with 100,000t/a in the 12th Five ore consumed in China. capacity of 200,000t/a, Year, indicating that there In fact, the new production aiming at a total capacity of line is part of Jinan Yuxing’s 300,000t/a by 2012. relocation project. Jinan Yuxing has to shut down its original production line for a titanium mining right relocation, due to its heavy in Ziyang County, Shaanxi Ching-Hing Province (See issue 0911, acquires page 9). titanium Pangang Titanium’s rutile TiO2 mining right However, it is uncertain output hits new record when the titanium ore can O n November 19th, 2009, Ching-Hing be exploited, as Ching- Hing has not obtained an A ccording to Pangang Group, Pangang Group Titanium Panzhihua Plant (Pangang Titanium) (Hong Kong) Limited exploitation license from the produced 1,930 tonnes rutile TiO2 in November 2009, (Ching-Hing) successfully government. hitting a new monthly record. acquired titanium mining rights in Ziyang County, The news about the Pangang Titanium’s current rutile TiO2 production line is Shaanxi Province. acquisition has boosted a the first phase project with capacity of 20,000t/a launched 171.4% growth of Ching- in December 2007. The product branded PTR308 is According to Ching-Hing, it Hing’s stock on the Stock intended to be used in coatings and inks. Thanks to the raises USD245.97 million for Exchange of Hong Kong soaring demand, Pangang Titanium has almost operated at acquiring the entire equity after resumption of trading full capacity this November 2009. interest in Greater China on November 19th, 2009. Mining Resource Ltd. which Additionally, Pangang Group Mining Plant (Pangang owns 95% share of Shaanxi Mining) produced titanium concentrate ore of 25,590 Tai Sheng Da Mining tonnes, which also hit a record high, in November 2009. Company Limited who holds 5 CCM International Limited www.cnchemicals.com
  9. 9. TiO2 China Monthly Report Vol.2 Issue 12.2009 Rutile TiO2 competition to be intensified A ccording to CCM’s survey, rutile TiO2 capacity under construction in China currently has reached 385,000t/ as is their usual strategy. This will do no good for their long- term profitability and development. a all of which is expected to be launched in 2010. China’s rutile TiO2 capacity will soar to 1,201,000t/a by the end of Hence, China’s rutile TiO2 manufacturers, especially the new 2010, up 47.2% year on year (TABLE 6) entrants, are suggested to improve product quality first and broaden distribution channels to cope with international In November 2009, Hubei Wuhan Fangyuan Titanium competition, especially in the emerging markets in developing Dioxide Co., Ltd. (Wuhan Fangyuan) initiated pilot production countries like India and others in Southeast Asia. of its rutile production line, with the first phase capacity of 20,000t/a. TABLE 6: Rutile TiO2 capacity expansion of some manufacturers, 2010 Company Capacity Incremental Remark According to Mr. Yang, sales director of Wuhan Fangyuan, the 2010 capacity, t/a company has started its rutile production line construction Lomon Titanium 120,000 40,000 Expansion early in 2007. But owing to difficulties with land acquisition Jinan Yuxing Relocation & 100,000 80,000 expansion and the outbreak of the financial crisis, it is not until TiO2 Panjin Titanium Expansion demand rebounded rapidly in 2009 that Wuhan Fangyuan 45,000 25,000 (chloride started the trial production. process) Xingzhong Titanium 50,000 30,000 Expansion Xichang Ruikang 60,000 60,000 New entrant Mr. Yang indicates that Wuhan Fangyuan used to be an Fumin Zechang 30,000 30,000 New entrant anatase TiO2 manufacturer with capacity of 10,000t/a. To Jiangxi Tianguang 50,000 50,000 New rutile line strengthen its competitiveness, Wuhan Fangyuan set up a Huiyun Titanium 30,000 30,000 New rutile line Pangang Titanium 40,000 20,000 Expansion rutile TiO2 production line with a design capacity of 60,000t/ Wuhan Fangyuan 20,000 20,000 New rutile line a in 2007. Subtotal 495,000 385,000 -- National total 1,201,000 385,000 -- In fact, besides Wuhan Fangyuan, many other anatase TiO2 Source: CCM International manufacturers in China have shifted to rutile TiO2 production in the past two years, due to the intense competition in the anatase TiO2 market, by building new rutile TiO2 production lines or by engaging in TiO2 post treatment. Take for example, Anhui Annada Titanium Industry Co., Ltd. (Anhui Annada), a listed anatase TiO2 producer; it launched a rutile TiO2 production line in 2009, which has improved its profitability. However, due to depressed TiO2 demand during the economic downturn, some projects have been postponed. The fast expanding rutile TiO2 capacity will certainly intensify competition in Chinese market, and will likely restrict TiO2 price increases in 2010. Based on CCM’s survey, China’s TiO2 apparent consumption in 2008 amounted to 1,216,000 tonnes, with rutile TiO2 at 59.5% of consumption or 720,000 tonnes. Even assuming that China’s demand for rutile TiO2 will increase by 25% in 2010, there will still be an oversupply of rutile TiO2, when all the new capacity is brought on-line. Accordingly, competition will intensify, which will impose pressure on TiO2 manufacturers trying to raise prices. By the end of 2010, with all this new capacity, Chinese companies may start price wars to capture more market share 6 CCM International Limited www.cnchemicals.com
  10. 10. TiO2 China Monthly Report Vol.2 Issue 12.2009 Downstream Furniture coating to boost TiO2 consumption O n November 30th, 2009, Huizhou Huihuang Xiangying Coating Co., Ltd. (Huihuang Xiangying), Besides domestic enterprises, coating multinationals have also China’s well-known furniture coating manufacturer recognized the huge furniture coating market in China and located in Huizhou City, held a ground-breaking ceremony expanded their production capacity in China through for its new coating production factory in Qingyuan City, acquisition. Early in 2006, Valspar acquired the coating Guangdong Province. The factory has a production capacity business of China Resources, one of China’s largest coating of 39,000t/a mainly for furniture coatings. manufacturers, enabling Valspar to capture more market share in China (TABLE 7). According to Mr. Lin, sales director of Huihuang Xiangying, TABLE 7: Main furniture coating companies in China, 2008 to meet the increasing demand and to capture more market Company Output, tonne share, Huihuang Xiangying invested USD14.64 million in the Akzo Nobel (including ICI) 100,000 new facility to expand its production capacity. He indicates Valspar (including China Resources) 90,000 Nippon Paint 50,000 that Huihuang Xiangying accounts for 70% market share of Taiho International 50,000 the high-end market, with its furniture coating used in jewelry, Bauhinia Paints 35,000 instrument, and exhibit cases, selling under the brand name Zhanchenda Chemical 30,000 Xiangying Coating. Carpoly Paint 20,000 Sopel Chemical 20,000 PPG 10,000 The promising future of the furniture coating market, together Source: CCM International with its current supply failing to satisfy customers’ demand, constitutes the main reason for Huihuang Xiangying’s production expansion. Paints and coatings is the largest end use sector of TiO2, and furniture coatings play an important role in coatings. The By September 2009, China has produced 431 million pieces of rapid development of furniture coatings is beneficial to the furniture, with output value of USD79.7 billion, up 7.2% year growth TiO2 consumption. According to the average on year, with about 22.8% of the total value for export sales. consumption of TiO2 in coating, furniture coatings are predicted to consume 110,000 tonnes TiO2 in 2009. Booming furniture production is expected to drive up furniture coatings output in 2009 to exceed 1,100,000 tonnes, According to the purchasing department of Huihuang or about 15% of the total coatings output. Chinese furniture Xiangying, TiO2 is used as a pigment in coating production. coatings output has increased with CAGR of 18% during 2004- As its products are marketed at the high-end sectors that 2009 (FIGURE 3). require TiO2 with excellent physical and chemical properties, Huihuang Xiangying will mainly use FIGURE 3: Production situation of furniture coating in China, 2004-2009 DuPont’s TiO2. 9,000,000 40.0% In the coming years, China 7,500,000 will continue to accelerate the 30.0% urbanization. By the end of 2008, Output, tonne 6,000,000 China’s urbanization rate is 45.7% Growth rate 20.0% and expected to rise to 50% by 2015. 4,500,000 That will boost furniture production, 10.0% 3,000,000 thus driving up demand for furniture coating, especially in high-end market. 0.0% 1,500,000 The high-end market will continue to 0 -10.0% grow and to be captured by imported 2004 2005 2006 2007 2008 2009 Est. TiO2 with relatively good quality in the near-term. Furniture coating Coating Source: CCM International th of furniture coating Grow Grow th of coating 7 CCM International Limited www.cnchemicals.com
  11. 11. TiO2 China Monthly Report Vol.2 Issue 12.2009 rate of Indian economy, and this is expected to continue in the coming years. Indian coating industry boosts TiO2 consumption Currently, architectural coatings account for 75% of the coatings capacity in India. The coatings market is K ansai Paint Co., Ltd. (Kansai Paint) plans to invest USD 22 million to expand architectural coatings concentrated amongst a few companies, including Asian Paints, KNP, Berger Paints, and Akzo Nobel, etc. production in its Indian plant, Kansai Nerolac Paints Ltd. (KNP). After the launch of the new capacity (5,000t/ The continually developing coatings industry in India will a) in 2010, Kansai Paint will have architectural coatings certainly drive up TiO2 consumption. Though India has its capacity of 20,000 t/a in India, which will help Kansai own TiO2 plants and levies an anti-dumping duty on Chinese Paint enhance its competitiveness in India. anatase TiO2, India still imports a large volume of TiO2 from China. By October 2009, India had imported 10,233 tonnes In India, coating output has increased with growth rate of 12- TiO2 from China, or 12.9% of India’s total import volume. 15%, approximately 1.5-2 times as fast as the overall growth According to the report, good brand development. According to Yip’s reputation, lower price of raw materials, Chemical, it will continue to expand Yip’s Chemical capacity expansion, and huge market its production capacity in Shanghai achieves huge profit in the mainland, jointly contributed to (architectural coatings), Hebei and growth in coating its profit increase. In May 2009, Yip’s Zhongshan (both for inks), respectively. Chemical launched its new plant in By the end of 2012, Yip’s Chemical’s Y ip's Chemical Holdings Limited (Yip’s Chemical) gained profit Tongxiang, Zhejiang Province, which helped to strengthen its architectural coatings production capacity (including architectural coatings and inks) is of USD18.92 million from its coating coatings and inks businesses. Both expected to increase by 60% or more. business, which constitutes 49% its architectural coatings and inks of the company’s total profit, by businesses achieved a 23% growth rate. Listed on Hong Kong Stock Exchange, September this year, up 129% year on Yip’s Chemical has three core year, according to its 3rd quarterly Propelled by the huge domestic businesses including solvents, coatings, report released on November 26th, market potential, Yip’s Chemical is to and lubricants, with 17 manufacturing 2009. strengthen its competitiveness through plants in China. Yip’s Chemical also capacity expansion and product holds a 5% share of Sichuan Lomon Price Update Price update in December 2009 T iO2 products and the major raw material titanium concentrate ore have maintained a price downtrend with fluctuation in December 2009. On the contrary, sulfuric acid price has continued its short term trend of a strong rise. Ex-factory prices of TiO2 and sulfuric acid in December 2009, USD/t Area Rutile TiO2 Anatase TiO2 Sulfuric acid 98% November December November December November December South west 1,977-2,241 1,977-2,241 1,435-1,933 1,362-1,860 44-66 47-66 East China 1,846-2,007 1,845-2,006 1,435-1,465 1,391-1,435 28-59 29-73 Central China 1,904-2,051 1,904-1,977 1,465-1,538 1,391-1,435 22-37 22-51 South China N/A N/A 1,435-1,509 1,362-1,391 26-44 29-51 Source: CCM International TiO2 With decline in demand, TiO2 price has fallen in December 2009. 8 CCM International Limited www.cnchemicals.com
  12. 12. TiO2 China Monthly Report Vol.2 Issue 12.2009 December is the traditional slack season of the domestic TiO2 industry. Because of the bad weather in North China, many construction projects are suspended, thus leading to decreased demand for coatings. As a result, many coatings manufacturers reduce their purchases of TiO2. With increased inventory levels, TiO2 prices decreased this month, especially anatase TiO2. With oversupply and poor demand, TiO2 price is expected to maintain a downtrend in the coming few months. Sulfuric acid On the whole, sulfuric acid price has continued to advance in December 2009, thanks to an inventory shortage and continuous price increases of its major raw material --sulfur. Recently, some sulfuric acid manufacturers have suspended production to overhaul equipment, such as Jiangxi Copper Corp. which suspended operation of a 600,000t/a production line on 10 Dec. 2009. Therefore, sulfuric acid supply has fallen short. In addition, manufacturers of phosphate fertilizer, an important downstream consumer of sulfuric acid, are running at full capacity, thus further raising their purchase volume of sulfuric acid. With these factors, for the short term, sulfuric acid prices are expected to rise further in China. Ex-factory prices of titanium concentrate ore and titanium slag, Dec. 2009, USD/t Area Titanium concentrate ore Titanium slag Grade November December Grade November December Sichuan 40%-46% 82-117 82-110 74%-78% 366-388 366-388 Hainan 45%-54% 103-125 100-120 N/A N/A N/A Yunnan 45%-47% 92-103 85-100 77%-92% 395-513 425-557 Guangxi 50%-52% 110-117 105-114 N/A N/A N/A Liaoning N/A N/A N/A 92% 571-601 600-615 Source: CCM International Titanium concentrate ore With TiO2 market entering its traditional off-season this month, titanium concentrate ore prices have generally seen a downtrend but with fluctuations due to weak demand. Owing to excessive production before the demand dip, titanium concentrate ore has seen surplus supply this month, leading to a price decline but the extent is slight as many concentrate manufactures are not selling their inventory, but instead waiting for prices to rise. Vietnam titanium concentrate ore price in China also shows signs of decline, mainly attributed to its weak demand and price decreases of domestic titanium concentrate ore. However, due to high shipping charges, Vietnam titanium concentrate ore price never falls very much. Titanium concentrate ore price is predicted to decrease in the following months. Titanium slag As national electricity price is raised, manufacturing cost of titanium slag has risen by about USD18/t, thus leading to price increase of titanium slag this month. However, high titanium slag price fails to show significant advances, which reflects the sluggish demand from its downstream industries such as titanium sponge. Titanium slag price is forecast to remain stable with slight increase in the near future. 9 CCM International Limited www.cnchemicals.com
  13. 13. TiO2 China Monthly Report Vol.2 Issue 12.2009 Policy & Legislation Policy interpretation related to TiO2 industry -- By Liu Changhe Editor note: in order to restrict blind expansion and gain with the national development trend of energy saving and more supports from the government, China National environmental protection, and will drive the TiO2 industry Coatings Industry Association (CNCIA)’s titanium dioxide branch held an annual meeting in Chengdu City on December toward sustainable development, as well as represent TiO2 3rd-5th, 2009. In the meeting, CNCIA drew up Declaration manufacturers’ benefits, they are very likely to be adopted by of Green TiO2 industry (See issue 0909, page 17), and also the government in the near future. discussed the drafts of Standards for Tax Rebate of TiO2 Export (Standards) and Entry Criteria for TiO2 Production (Entry Criteria). Mr. Liu Changhe, leader of CNCIA TiO2 Guided by the Standards and Entry Criteria, as well as the expert group, will interpret the Standards and Entry Criteria Declaration of Green TiO2 industry, China’s TiO2 industry is for you. expected to gain more support from the government and will develop more healthily in the coming years. W ith the purpose of promoting TiO2 industry development, the Chinese government used to implement such preferential policies as an export tax rebate. However, in the past two years, the Chinese TiO2 industry has expanded rapidly without adequate concerns for environmental protection, which thus impelled the government to cancel the tax rebate in 2007. This has caused a great impact on TiO2 industry development. To gain more support from the government, the CNCIA Liu Changhe Chief and senior expert in domestic titanium dioxide titanium dioxide branch drafted the Standards and Entry production by chloride process, senior adviser and Criteria, both of which are intended to promote sustainable former vice president of Jinzhou Ferroalloy Co., Ltd. industry development over the long term. (China’s unique TiO2 manufacturer adopting chloride process) is appointed as the leader of the expert As the Standards suggest, the government should reinstitute group of the TiO2 branch of China National Coatings the tax rebate for TiO2 exports. However, only TiO2 Industry manufacturers that pass ISO9001, ISO14000 and obtain clean production certifications from local governments will be able to enjoy the tax rebate. This draft also emphasizes that no matter how large the production scale is, TiO2 manufacturers Raised transport cost curbs should have their own treatment facilities for three kinds of TiO2 price downturn wastes. Otherwise, they won’t be able to gain the export tax rebate. A ccording to National Development and Reform Commission, rail transport cost is raised from USD To arouse deeper concern from TiO2 manufacturers on 0.014/t.Km to USD 0.015/t.Km effective December 13th, environmental protection, TiO2 industry also released the 2009. Declaration of Green TiO2 industry to help change the public’s bad impression of the TiO2 industry. The adjustment of rail transport cost will go against inland TiO2 manufacturers’ product distribution, especially in For the Entry Criteria, it aims at restricting excessive TiO2 Panzhihua City. Generally, railway is a major means of capacity expansion by raising the entry threshold for new transport for delivering TiO2 produced in Panzhihua City, a entrants, requiring that the minimum unit capacity should region whose TiO2 capacity share is over 20% of the national be at least 50,000t/a for sulfate process and 60,000t/a for total. The increased cost will also impact Panzhihua’s chloride process. In addition, the Entry Criteria suggests that titanium ore transportation costs the government should promote TiO2 industrial integration to eliminate inefficient capacity as the coal-mining industry does. The increased transportation costs help to slow down TiO2 price downturn that has begun since TiO2 demand started to Since the drafts of the Standards and Entry Criteria are in line enter the slack season in November. 10 CCM International Limited www.cnchemicals.com
  14. 14. TiO2 China Monthly Report Vol.2 Issue 12.2009 China continues tariff-free titanium slag import O n December 8th, 2009, the Sate Council approved the scheme for eliminating the tariff on imported titanium slag (HS Code: 38249099) in 2010. According to the scheme, China will continue with a zero tariff on imported titanium slag, which has been implemented since 2007. In addition, the government will subsidize imports of resource-based products and introduction of key technologies by paying borrowing costs for loans. The exact details of the policy have not been revealed yet. The resource-based products cover titanium ore, copper ore, lead ore, etc. To protect domestic titanium resources, it will levy tariffs of 10% on exported titanium ore (HS Code: 26140000). Enjoying the preferential policy, China’s imports of titanium ore resource have experienced rapid increases. By October 2009, China has imported 1,154,665 tonnes titanium concentrate ore (HS Code: 26140000) and over 150,000 tonnes titanium slag (HS Code: 38249099). Special Report Review of Chinese TiO2 industry 2009 ----- policy, raw material, production C hinese TiO2 industry has experienced ups and downs in package.. Driven by these supportive policies, China has become the world’s Dingxing, Panzhihua Taihai, etc, suspended their production due to their the past two years. After the decline largest automobile manufacturer and inadequate environmental protection caused by the global financial crisis the largest automobile market by measures. In order to improve at the end of 2008, the industry October 2009, which will stimulate environmental protection awareness has seen an obvious rebound since TiO2 consumption in coatings, plastics and sense of social responsibility, China Q2 2009. Both production and and other end-use sectors. National Coatings Industry Association consumption of TiO2 are booming in (CNCIA) Titanium Dioxide Branch H2 2009, thanks to the government’s There are also preferential policies released a Declaration of Green TiO2 supportive policies. The current closely related to TiO2 industry. For Industry Guidelines in August 2009. thriving TiO2 industry has driven instance, Chinese government has up demand for titanium ore that is abolished import tariffs on titanium Next year, the government is expected gradually depleting existing reserves concentrate ore (HS Code: 26140000) to raise entry threshold for new entrants and feedstock production capabilities. and titanium slag (HS Code: 38249099), in TiO2 industry and to resume tax The anticipated increasing tightness and also lowered the tariffs on sulfuric rebates that were discontinued in 2007, of feedstock supplies, has attracted acid (HS Code: 28070000) in 2009. for TiO2 manufacturers who implement widespread attention, and increasing Meanwhile, to protect domestic TiO2 adequate environmental protection investment in new ore resources from producers, it subsidizes titanium ore measures. investors and mining firms. and feedstock imports payment of interest expense on loans for working Raw material Policy capital or approved projects since September 2009. Compared with 2008, Chinese TiO2 To cope with the 2008-2009 financial industry enjoyed a relatively stable raw crisis, the Chinese Environmentally related policy material market in 2009. is another driver for domestic government promulgated a series of TiO2 development. In 2009, the For sulfuric acid, owing to the rapid supportive policies, including stimulus government heightened environmental capacity expansion and slow demand plans for ten industries and USD586 requirements for TiO2 production. growth, Chinese sulfuric acid capacity billion for an economic stimulation Some manufacturers, such as Panzhihua has experienced redundant construction 11 CCM International Limited www.cnchemicals.com
  15. 15. TiO2 China Monthly Report Vol.2 Issue 12.2009 and oversupply, which it is expected to in acquiring mining rights abroad. its post treatment. Capacity expansion maintain for many years to come. But and production shifts can actually help with shrinking capacity share of sulfur- Despite the rapid development of the manufacturers to improve their burning process, sulfuric acid price will domestic titanium ore resources, China profitability in the short term but also play a less important role in influencing still relies heavily on imported titanium has greatly intensified the competition sulfur price, which is mainly influenced ore. By October 2009, it has imported amongst Chinese producers. by crude oil price. Besides, many TiO2 a total of 1,154,665 tonnes titanium ore manufacturers have built their own concentrate, up 8.2% over previous year. Some manufacturers, such as Panyu sulfuric acid production lines to match Titanium, are working hard on with their TiO2 production. Benefiting In the foreseeable future, oversupply of competitiveness enhancement through from stable sulfuric acid prices, TiO2 sulfuric acid and heavy dependence on product quality improvement, instead manufacturers improved profitability in imported titanium ore are expected to of capacity expansion. This has helped 2009. remain unchanged. them capture more high-end markets. For titanium ore, its demand keeps Production In 2009, China has set a target that TiO2 increasing with slight price fluctuation capacity utilizing the chloride process in 2009. However, with gradually With rebounding demand and will account for 15% of the national total exhausting resources and soaring improved environmental protection, by 2015, which seems too optimistic. demand, titanium ores and feedstocks TiO2 operating rates have seen rapid Nevertheless, Jinzhou Titanium, have drawn wide attention from many increases this year, reaching nearly 90% China’s first manufacturer adopting TiO2 manufacturers and mining in Q4 2009, as the soaring titanium ore the chloride process, has doubled its companies that have plans to invest imports indicates. capacity to 30,000t/a in 2009, and its more in the ore sector. Some enterprises second chloride process line is under including JNMC and Pangang Group Rutile TiO2 capacity expansion is on- construction and proceeding smoothly. even have attempted to acquire titanium going in 2009. Besides rutile TiO2 In the coming years, capacity expansion ore exploitation rights abroad. But manufacturers expanding capacity, will continue in China and TiO2 JNMC’s failure indicates that domestic many anatase TiO2 manufacturers are production will be more environmentally enterprises may still have long way to go shifting to rutile TiO2 production or friendly. Profitability to shrink in Q1 2010 W ith TiO2 demand entering a slack season, TiO2 price has dropped gradually since November 2009, which in Q3 2009, up 91.5% over Q2 2009 and experienced increase of its unit profitability by USD 0.007. will impair TiO2 manufacturers’ profitability in the short term, despite the huge profit manufacturers have gained in Besides huge domestic profit margins, export value of TiO2 past few months. manufacturers’ also rose. Driven by soaring domestic demand and price hikes initiated Export price increased by 4.9% and 2.3% for rutile and anatase by multinationals, domestic TiO2 price (FIGURE 4) went up TiO2 respectively during Jul. ~ Oct. 2009. However, TiO2 gradually from Jun. ~ Oct. 2009, during which domestic ex- sales volume does not seem to be affected by the price surge. factory prices increased by 8.9% for rutile TiO2 and 5.7% On the contrary, some manufacturers’ TiO2 export volume for anatase TiO2. Though there may be lots of room for has increased through entry into new markets. Take Henan negotiation, prices in actual deals have indeed risen. For Billions for example, its average export price increased from instance, the export price (FIGURE 4) increased by 4.9% and USD1,621/t in June to USD1,758/t in October, but its monthly 2.3% respectively for rutile and anatase TiO2. export volume also rose from 1,674 tonnes to 2,067 tonnes over the same time period. This achievement is attributed to TiO2 manufacturers have gained huge profits in the domestic Henan Billions’ strengthened efforts in its new markets in market in the past few months. Take Anhui Annada for Kazakhstan, Columbia, etc, in H2 2009. example, benefiting from booming demand and soaring prices, it gained USD16.84 million sales value from its TiO2 business Increases in export price and volume jointly contributed to 12 CCM International Limited www.cnchemicals.com
  16. 16. TiO2 China Monthly Report Vol.2 Issue 12.2009 a soaring export value. For instance, FIGURE 4: TiO2 price, Jun. ~ Dec. 2009 Henan Billions’ monthly export value 2,100 increased from USD2.71 million in June to USD3.64 million in October, up 1,950 34.3%. 1,800 USD/t 1,650 Besides, though prices of sulfuric acid 1,500 and titanium ore also increased by 25.0% and 4.0% respectively during 1,350 June and October (FIGURE 5), it only 1,200 pushed up production cost of TiO2 by ly e er st r r r n be be be Ju gu ob Ju about USD 40/t. m m em Au ct ve ce O pt No De Se Accordingly, even taking the increased Exfactory rutile Exfactory anatase Export rutile Export anatase production cost into consideration, the profitability of TiO2 business increased Note: ex-factory price is usually higher than price in actual deals as there may be certain room for negotiation. by about USD50/t during June- Source: CCM International October. Nevertheless, with TiO2 demand FIGURE 5: Prices of titanium ore and sulfuric acid, Jun. ~ Dec. 2009 entering a slack season because of 120 the coming Spring Festival, TiO2 prices have dropped slightly since 105 November 2009 and are likely to 90 USD/t keep declining throughout Q1 2010. 75 In addition, possible increases in 60 electricity price and transportation 45 cost, as well as the gradual rise of 30 raw material prices will push up ly e er production costs of TiO2 in the near t r r r us n be be be Ju ob Ju ug em em em ct future. A O ov ec pt Se N D Hence, price downturn and rising Sulfuric acid Titanium concentrate ore production cost will jointly shrink the Source: CCM International profitability of TiO2 manufacturers in Q1 2010. 13 CCM International Limited www.cnchemicals.com
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