Development and Present Status of Lead-chrome Pigment Sector


1. Development process

Lead-chrome pigments are traditional inorganic color pigments. With people's growing awareness of environmental protection, lead-chrome pigments have been gradually withdrawn from applications such as household appliances, toys, cultural and educational articles, and interior decoration due to the toxicity of lead and chrome. However, because of the pigments' advantages, including bright color, strong coloring and hiding power, and good resistance to light, heat and weather, they are still used in the sectors like coatings, plastics, rubber, synthetic leather coloring as well as advertisement color manufacturing, etc.
T   he global output of lead-chrome pigments was around 120 thousand tons in 1986, of which around 10 thousand tons was made in China, accounting for 8.8% of the world total. Since the end of the 20th century, developed countries and regions such as Europe and the United States have begun to stop the synthesis of lead-chrome pigments and gradually turned to processing of the primary lead-chrome pigment products imported from developing countries. Post treatment reduces mineral resource exploitation, the use of energy and the emission of pollutants, in turn reducing both pollution and the cost of the products. Both the output and sales volume of lead-chrome pigments in China more than doubled during 2001-2010. Due to the impact of the global financial crisis, the domestic economic development has slowed down in the last two years and the development of the lead-chrome pigment sector has also slowed down. Other factors for the slowdown of lead-chrome pigment sector include the increased price of the resource-based raw materials as well as the environmental pollution and the human health impact of lead and chrome.
   The production of lead-chrome pigments in China started in 1940s. In 1990s, the domestic consumption of lead-chrome pigments began to grow and emerging enterprises like Jiangsu Shuangle Chemical Pigment Co Ltd, Shanghai Junma Chemical Co Ltd, Hebei Best Color Chemical Co Ltd, Tianjin Beichen Zhiyuan Chemical Plant and Henan Xinxiang Red Yellow Blue Pigment Co Ltd in lead-chrome pigment sector began to appear. Since 1994, some internationally well-known pigment companies have sought business partners in China, for example, Xinxiang Highland Pigments Co Ltd has cooperated with Cookson of the United States and DDC of Canada in succession, Kikuchi Color & Chemical Corporation of Japan has cooperated with Chongqing Jiangnan Chemical Co Ltd, and NIC of Japan has cooperated with Jiangsu Shuangle Chemical Pigment Co Ltd. In addition, some enterprises has cooperated with the universities and research institutes to develop new products. For example, Jinan Printing Ink Factory and Penglai Xinguang Pigment Chemical Co Ltd have imported manufacturing technology from Korea. Due to changes of ownerships, market forces, safety issues, environmental protection and local industrial structure adjustments, some enterprises like Guangxi Quanzhou No.1 Chemical Plant, Wenxian No.2 Chemical Plant, Qingdao Longda Chemical Co Ltd, Hunan Star & Moon Pigment Liability Co Ltd and Shanghai Chrome Yellow Pigment Factory's production lines in Shanghai have suspended production or closed down.

2. Present Status

The China's lead-chrome pigment enterprises are scattered about the country, with the eastern coastal region being the most active. Enterprises in China use basically the same production process, and fewer than 20 producers have a capacity of over 1 000 t/a. By the end of 2011, China had 44 lead-chrome pigment enterprises with a combined capacity of 83 200 t/a. The output of 19 member enterprises of Lead-chrome Pigment Branch of China National Coatings Industry Association accounted for around 70% of the national total.
   In the last 10 years, quite a few small and medium enterprises in lead-chrome pigment sector have gradually reduced or suspended production because of safety and environmental concerns. Enterprises currently in production or relocation all meet the national environmental protection requirements for management of "the three wastes" (industrial wastewater, waste gases and waste residues).

Capacity, Output and Sales Volume of China's Lead-chrome Pigment Sector    
                                        
Year    2001    2002    2003    2004    2005    2006    2007    2008    2009    2010
Capacity (thousand t/a)     30    30    35    35    40    55    55    65    70    75
Output (thousand tons)    28    31    35    38    40    55    56    58    60    64
Sales volume (thousand tons)    27    29    33    35    40    55    55    52    53    59
Source: CNCIC        

China produced 52 699.9 tons of lead-chrome pigments in 2011, up 0.61% year-on-year, the sales volume was 49 779.3 tons, up 0.99%, the production/sales rate was 94.5% and the sales value reached RMB1.02 billion, a rise of 20%, according to recently completed statistics. The main reason for the 20% growth of sales value is the price rise of products caused by the price growth of raw materials - lead and potassium dichromate. The price of potassium dichromate generally hovered at the high level of RMB16 500-17 500 per ton, a rise of around RMB2 500 per ton compared to the average price in 2010. The price of lead remained at over RMB17 000 per ton from November 2010 to April 2011, and decreased slightly afterwards. The average price of lead in 2011 was around RMB1 500 per ton higher than in 2010, directly causing the product cost to grow over 10%. At present, labor cost has become the main factor in the increase of production costs. Due to two increases in the national minimum wage, each around 25%, in the past two years, an increase of the number of workers who enjoy social insurance and a higher base pay, as well as rising energy prices, transportation fees and pollutant discharge fees, the profit margin of the products has not increased. On the contrary, the margin has continued to shrink, and the whole sector is in a low profit state even though the product prices grew 12%-15% cumulatively over the last two years.
   The export volume of lead-chrome pigments last year was 5 537.5 tons, down 25.4% year-on-year and the export value was US$21.687 million, a drop of 2.47%. The sharp decline in volume is directly related to the European debt crisis, the difficult recovery of the world economy and the continuous appreciation of RMB.
   From the point of product portfolio, the proportion of medium chrome yellow in total output of lead-chrome pigments reduced slightly from 54.2% to 50.5%. The proportion of lemon chrome yellow and molybdate red changed only a little, being 17.4% and 8.9%, respectively. The proportion of zinc chrome yellow and other lead-chrome pigments rose from 3.9% and 15.4% to 4.8% and 18.4%, respectively. In the last two years, consumption of anti-rust pigments and other chrome pigments have grown. The low-toxicity and non-toxic pigments are increasingly favored by consumers, and this is clearly the development trend for pigments.