March 30, 2012 “National Development and Reform Commission” reported:
In 2011, due to multiple price hikes in the international market, increased domestic market demand, etc., the output of the titanium dioxide industry steadily increased, the product structure was continuously optimized, the profitability enhanced, and the overall situation showed a favorable development trend.
I. Basic Situation of Industry Operations
(1) Output has steadily increased and the product structure has been optimized.
In 2011, the total output of titanium dioxide in the entire industry was 181.2 million tons, increasing by 22.9% compared to the previous year. Among them, the output of rutile type was 132.4 million tons, increasing by 50.7% year-on-year; the output of anatase type was 42.4 million tons, decreasing by 14.4% compared to the previous year. As can be seen from Table 1, in the past five years, the product structure of the titanium dioxide industry in China has been continuously optimized. In 2011, the proportion of rutile type products reached 73.1%, an increase of nearly 33 percentage points compared to 2007. However, compared with other major producers in the world, the proportion of rutile type is still 10-15 percentage points lower.
Table 1: Titanium Dioxide Production and Product Composition from 2007 to 2011 (in millions)
By region, currently, the production of titanium dioxide in China is mainly concentrated in the coastal areas of East China with their advantages in funds and technology, as well as the Panzhihua area in Southwest China with its resource advantages. In 2011, the output of these two regions accounted for 66.5% of the national total. Among them, the output in East China was 64.4 thousand tons, accounting for 35.5%; the output in Southwest China was 56.2 thousand tons, accounting for 31%. The Central China and South China regions accounted for 17.9% and 14% of the total output respectively.
(2) Prices have risen significantly, and profitability has improved.
In 2011, due to multiple rounds of price hikes in the international market, rising raw material costs, and increased market demand, the price of titanium dioxide soared. Taking rutile-type titanium dioxide (BA01-01) as an example, it showed a continuous upward trend since January, rising from 13,500 yuan per ton to the annual peak of 19,800 yuan per ton on October, with a year-on-year increase of 46.7%. In November, although affected by the slowdown in downstream demand growth, the product price slightly declined, but the average price for the whole year still reached 16,930 yuan per ton, an increase of 27.8% compared to the second half of last year. Due to the significant increase in product prices, a certain profit margin was formed in the industry, and the profits and financial conditions of most enterprises improved.
(3) Export growth was rapid, and the products were largely self-sufficient.
With the increase in domestic titanium dioxide production capacity and the improvement in product quality, currently, except for some high-end products, self-sufficiency has been achieved basically. In 2011, China became a net exporter for the first time. Throughout the year, the total volume of titanium dioxide imports and exports was 627,000 tons, with a year-on-year growth of 17.3%. Among them, the export volume was 398,000 tons, with a year-on-year increase of 49.6%; the import volume was 229,000 tons, with a year-on-year decrease of 15%.
II. Main Problems Existing in the Industry
(1) Excessive expansion of production capacity
In 2011, China’s titanium dioxide production capacity was approximately 26 million tons, with the plant utilization rate being only 70%. The industry was already experiencing overcapacity. However, due to the growth in industry profits in recent years, enterprises have been expanding their production capacity. It is estimated that if all the planned production capacity increases are completed and put into operation as scheduled, the total industry capacity in 2015 will reach around 44 million tons. In 2011, the apparent consumption of titanium dioxide in China was 16.4 million tons, with a year-on-year growth of 11%. Even if calculated at an average annual growth rate of 15%, the demand in 2015 will only be 29 million tons.
(2) Technical bottlenecks of the chlorination method
At present, the production of titanium dioxide in our country mainly relies on the traditional sulfuric acid method. We still haven’t fully mastered the chlorination method of production, which features low energy consumption, less waste, high automation level and large production capacity. Although domestic enterprises have jointly conducted technological research with research institutions for many years and have made certain progress, the core technologies such as chlorination and oxidation still need to be broken through.
(3) Shortage of high-quality titanium ore resources
The titanium resources in our country are mainly composed of vanadium-titanium magnetite. The high-grade titanium resources are limited. Currently, due to the constraints of factors such as the technological level of resource utilization, the development of the industry relies on imported raw materials. In 2011, 21.7 million tons of imported titanium concentrate were used, accounting for 49.3% of the total demand for titanium ores. If the technical bottlenecks in resource utilization cannot be broken through as soon as possible, the supply of high-grade titanium ore resources will become an important factor affecting the stable development of the titanium white powder industry in our country.
Note: The data in this article is provided by the Titanium Dioxide Branch of the China Inorganic Chemical Industry Association.