Iron Oxide Develops Stably

By Wang Wei

Stable increase of output

China is a large iron oxide production country in the world and
the output accounts for 50% of the world total. The output of
iron oxide in China was 623 thousand tons in 2005, an increase
of 14.3% over 2004. Since 2004 the demand of iron oxide yellow
and iron oxide black in the international market has increased
fast. Many domestic producers have had readjustments to the
product portfolio and some iron oxide red units have shifted to
produce iron oxide yellow or iron oxide black.
   China has nearly a hundred iron oxide producers, but only a
dozen of them have a capacity of over 10 thousand t/a. Producers
with considerable scale are mainly distributed in Zhejiang
province, Jiangsu province, Shanghai and Central/South China.

Market share held by
foreign-funded companies expanded gradually

With further improvements of the investment conditions, more and
more foreign producers have constructed production plants in
China. Lanxess of Germany and Rockwood of Britain, the iron oxide
giants in the world, have all established wholly foreign-owned
or joint venture companies in China. Some Hong Kong based
companies such as Cathay Pigments Group and Sterling have also
constructed production plants. The capacity of these
foreign-funded companies already reached 120 thousand t/a and
both the output and the sales amount reached more than 100
thousand tons in 2005, accounting for 20% of the domestic market.

Export increases steadily

The export of iron oxide in China has increased stably in recent
years. The export amount reached 329.4 thousand tons in 2005,
an increase of 5.4% over 2004. The export value was US$183.537
million, an increase of 13.6%. The average export price was
US$557 per ton, an increase of 7.7%. Iron oxide produced in China
is mainly exported to North America, Europe and Southeast Asia.
   Great quantities of iron oxide products are used as coloring
pigments in construction material, construction coatings,
ceramic, rubber, plastics, papermaking, leather and magnetic
material sectors. The apparent consumption of iron oxide in
China reached 478.5 thousand tons in 2005, an increase of 11.4%
over 2004. The consumption in construction material and coatings
sectors accounted for 75% of the total. With the rapid
development of construction and coatings sectors, the demand of
iron oxide will further grow. It is expected that the total
capacity of primary iron oxide products in China will be more
than 800 thousand t/a and the sales revenue will reach RMB3.0
billion at the end of the Eleventh Five-year Program period
(2006-2010).

Readjustment of product portfolio

The iron oxide industry is defined as a typical
resource/energy-consuming and labor-intensive sector. Domestic
products are low grade and oversupply. Great quantities of
varieties with high added value used in high-tech, new material
and new application sectors have to be imported from abroad,
however.
   Since 2002 China has intensified the development of iron
oxide products with high added value such as color paste variety,
easy-dispersion variety, micro fine variety, granulation
variety, heat-resistant variety, toxicity-free variety and
varieties with special properties and successfully put them into
market. The import amount of iron oxide in China was 184.9
thousand tons in 2005, a drop of 6.7% from 2004. It is expected
that the iron oxide industry in China will fully complete
readjustments to the product portfolio in 2015.

Table 1  Output of Various Iron Oxide Products in China
             in Recent Years
                 (thousand tons)
Year              2002    2003    2004    2005
Iron oxide red    171     195     205     244
Iron oxide yellow    166    180     210     236
Iron oxide black    71    78      100     122
Others               8    7       30      21
Total              416     460     545     623
Source: CNCIC Chemdata

Table 2  Major Iron Oxide Producers in China in 2005
(thousand t/a)
Producer                      Capacity     Output
Shanghai Yipin Pigments Co.         50    45
Zhejiang Deqing Huayuan Pigment Co.    70    65
Hunan Three-Ring Pigments Co.       25    20
Jiangsu Changshu Iron Oxide Factory    10    8
Henan Sanxing Dyestuff Chemical Co.    20    10
Jiangsu Yixing Yuxing Pigment Factory    80    60
Zhejiang Deqing Hangde Chemical Co.    40    30
Lanxess Shanghai Pigment Co.         25    25
Wuxi Black Pearl Ferric Oxide Co.    15    10
Jiangsu Changshu Rockwood Pigment Co.    12    10
Hebei Bazhou Jinhua Industrial Co.    12    8
Hangzhou Qianchao Fine Chemical Co.    10    8
Henan Xinxiang Tiejun Pigments Co.    10    8
Zhejiang Shaoxing Xinghua Ferric Oxide Co.    10    8
Hong Kong Cathay Pigments Group     25    20
Guangdong Shenzhen Elementis Co.    20    20
Source: CNCIC Chemdata