China's Strontium Carbonate Industry Enters an Adjustment Period   

By Wu Weidong, Xu Qing from Nanjing Jinyan Strontium Industry Co Ltd   

1. The market was depressed in 2009

In the first half of 2009, the negative impact of the global economic crisis on the strontium carbonate industry reached its extreme. Due to stagnant sales, many strontium carbonate producers in China were forced to reduce or even cease production. Some operated at only 17% of capacity. With the introduction of various stimulus policies, the downstream magnetic materials market began to bottom out in the second half of 2009. In 2009, China produced 159 000 tons of strontium carbonate in total, with the average operating rate of 38.7%.

China's major strontium carbonate manufacturers in 2009  
Manufacturer    Capacity     Output
              (thousand t/a)    (thousand tons)
Chongqing Red Butterfly Strontium Chemical Co Ltd    110     35
Hebei Xinji Chemical Group Co Ltd                    60      20
Shijiazhuang Jinshi Chemical Co Ltd                 55      35
Chongqing Qinglong Strontium Salt Chemical Co Ltd    20      8
Nanjing Jinyan Strontium Industry Co Ltd               25      15
Jinrui Mineral Development Co Ltd                   35      10
Minle Fuyuan Chemical Co Ltd                        20      8
Zaozhuang Yongli Chemical Co Ltd                     15      8
Chongqing Kailai Industrial Co Ltd                  6       5
Lanping Hexi Strontium Carbonate Plant              15        5
Others                                              50      10
Total                                               411     159
Source: CNCIC


    In 2009, the strontium carbonate consumption of downstream sectors was as follows. (1) The global economic crisis accelerated the popularization of flat panel TV sets and also accelerated the retirement of CRT color TV sets from use. By the end of August 2009, only two color TV tube manufacturers were left in China, and their capacity utilization rates were low. In 2009, China's color TV tube industry consumed about 30 000 tons of strontium carbonate. (2) China's magnetic materials industry actually consumed about 45 000 tons of strontium carbonate, down about 25% yyear on year. (3) Other industries consumed about 62 000 tons of strontium carbonate in total, of which metallurgy consumed about 9 000 tons, fireworks 8 000 tons, electronic components 5 000 tons, fine chemicals 25 000 tons, and others 15 000 tons. In addition, China exported about 15 000 tons of strontium carbonate. In summary, in 2009, the total sales volume of China's strontium carbonate was about 152 000 tons.

2. There are several new features
in the market in 2010

1) The market demand will grow slightly, but the imbalance between supply and demand will remain

    (A) Color TV tube industry
    
After several decades of development, the CRT color TV industry has built a very complete industry chain consisting of production, sales and maintenance units. It has a stable product quality, very mature maintenance technology and low maintenance costs. Meanwhile, with the advance of technology, the cost of LCD TV sets has come down greatly. After years of fostering the market, LCD TVs now dominate the TV market. Therefore, the market share of CRT TVs will decline further. It is expected that the CRT TV industry will consume about 20 000 tons of strontium carbonate in 2010.

   (B) Magnetic materials industry

The biggest consumer of strontium ferrite is the automotive industry, and the next one is the home appliances industry. The high temperature performance of strontium ferrite can hardly be achieved by high-grade NdFeB/ferrite magnets, so strontium ferrite still has a greater development potential. In the future, the magnetic properties of strontium ferrite products will be further improved, requiring higher quality strontium carbonate. This will increase the demand for high-quality strontium carbonate.
   In 2010, the Chinese government is adjusting its stimulus policy on car consumption, but it will still encourage car consumption. This will increase the demand for strontium ferrite. In addition, China's policy to encourage rural residents to buy home appliances will continue in 2010. Along with the economic recovery, the demand for strontium carbonate in the magnetic materials industry is expected to reach 60 000 tons, equal to the pre-crisis level.

    (C) International markets

Because many countries have come out of the shadow of the economic crisis and their economic conditions have gradually improved, international demand for strontium carbonate will grow to a certain degree in 2010. It is expected that the export of strontium carbonate will grow steadily and reach about 20 000 tons in 2010.

    (D) Other industries

In 2010, the strontium carbonate consumption for metallurgy will be about 15 000 tons, for fireworks about 8 000 tons, for fine chemicals about 30 000 tons, and in other industries about 20 000 tons.
   In summary, it is expected that in 2010, China's demand for strontium carbonate will be about 173 000 tons, far less than domestic production capacity. The oversupply will remain extremely severe, and the market competition will still be very fierce.

2) The development and implementation of two standards will speed up industrial restructuring

In the past, due to the low entry threshold of the strontium salt industry, many enterprises blindly entered this industry or expanded their strontium carbonate capacity, making China's strontium salt capacity far larger than the market demand. The retreat of the CRT industry also has a very huge impact on the strontium salt industry. In 2008, in the Chongqing region, much stricter environmental policies were implemented. This has heavily hit more than 50% of China's strontium salt capacity. In 2009, in Chongqing, only four strontium salt production lines pas