Functioning of the Titanium Dioxide Sector in China in 2014

By Deng Jie, Zhang Yijie


China’s titanium dioxide output kept rising quickly in 2014, and the output was around 14% higher than the output in 2013. Prices, however, declined, so enterprises had a greater pressure in operation. The market demand for titanium dioxide was down in 2014, and to reduce their inventories titanium dioxide producers in China made sustained reductions to their ex-factory prices. Titanium dioxide enterprises entered a real era of thin profit.

1. Price

The average price of rutile titanium dioxide in China was RMB14 643/t in 2013, but dropped to RMB12 985/t in 2014. The reduction was 12.8%, almost equal to the growth of output. The volume of titanium dioxide exported by China reached a new historical high of 550 kt, an increase of 30% over the previous year. In addition to the factor of low prices for such huge export amount growth, recognition of quality improvement of domestic titanium dioxide in overseas markets is also a significant factor.
The prices of anatase titanium dioxide dropped from RMB11 800-10 800/t in early January to RMB10 800-10 000/t in early April and started a slow recovery to RMB11 300-10 800/t during mid-April and early May. They were stable at RMB11 500-11 000/t during mid-May and early August and declined slightly to RMB11 300-10 800/t during mid-August and early September. Prices stepped up once again to RMB11 600-10 800/t during mid-September and mid-October, only to slide to RMB11 200-10 500/t during late October and mid-November. Starting from late November, the prices slid steadily to RMB10 000-8 300/t. The price has already touched the bottom today, but the possibility for a rising trend in near future cannot be ruled out.
The prices of rutile titanium dioxide in China were stable at RMB13 300-12 500/t during January and early February and started to drop from mid-February all the way to RMB12 300-11 500/t in early April. They then turned around and climbed slowly to RMB13 300-12 500/t during May and mid-June. The prices hit a new high of RMB13 600-12 800/t during late June and mid-July and made a sustained increase to RMB13 900-12 800/t during late July and early September. They reached the peak of RMB14 300-13 600/t during early September and mid-October and then slid again during late October and early November. Prices slid rapidly to RMB13 500-11 600/t during mid-November and mid-December, and the prices at the end of December were already frozen at the lowest level of RMB13 000-11 600/t.

2. Production

The output of titanium dioxide in China was 2 466 kt in 2014. The output of rutile titanium dioxide was 1 757 kt, accounting for 72% of the total. The output of anatase titanium dioxide was 494 kt, accounting for 20% of the total. Based on the actual capacity of 3 210 kt/a in 2014, the average capacity utilization rate was 76.9%, being 2.5 percentage points higher than in the previous year. The apparent consumption was 2 129.2 kt, an increase of 9.43% over the previous year. The output value of the titanium dioxide sector was around RMB35.0 billion in 2014, an increase of around 6% over the previous year.
According to statistics of 46 whole-process titanium dioxide producers with normal production and considerable scale, three producers – Jinzhou Titanium Industry Co., Ltd., Henan Luohe City Xingmao Titanium Industry Co., Ltd. and Yunnan Xinli Nonferrous Metals Co., Ltd. – use the chlorination process and their total output was 43.53 kt, accounting for 1.78% of the national total and being 0.67 percentage points higher than the previous year. Among these 46 titanium dioxide producers, 32 producers (69.6%) increased output. One producer (2.2%) had output equal to the previous year. Thirteen (28.3%) produced less.
The output of titanium dioxide from each of the top six producers (Sichuan Lomon Corporation Titanium Industry Co., Ltd., Billions Chemical Co., Ltd., China Nuclear Titanium Dioxide Co., Ltd., Shandong Dongguide Group Co., Ltd., Ningbo Xinfu Titanium Dioxide Co., Ltd. and Jinan Yuxing Chemical Co., Ltd.) reached or surpassed 100 kt. The output of the biggest producer Sichuan Lomon Corporation Titanium Industry Co., Ltd. was 295 kt. The total output of the top six producers was 1 049.2 kt, accounting for 43.08% of the national total and being 4.72% higher than in the previous year. The total output of the top thirty producers was 2 195 kt, accounting for 90.14% of the national total and being 2.94 percentage points higher than in the previous year.
The titanium dioxide sector in China was slack in the past two years. New and expansion projects have been fewer, and they are mainly concentrated in large enterprises. Small capacities have started to be phased out. Table 1 shows the titanium dioxide projects being constructed or planned for construction in China and the capacities to be phased out. New capacities for producing titanium dioxide in China will be 250 kt/a in 2015, 115 kt/a in 2016 and 100 kt/a in 2017. With the capacity of 3 444 kt/a at the end of 2014 as the base number, the capacity growth will respectively be 7.3%, 3.1% and 2.6%, being much slower than the growth in the past two years.

3. Import and export

China exported 552 kt of titanium dioxide in 2014, an increase of 37.08% over the previous year. The import volume was 216 kt, an increase of 11.32%. The drastic increase of the net export amount eased the inventory pressure of titanium dioxide in China. The quality of titanium dioxide produced in China started to be accepted by overseas markets in 2014, and the price was quite low, so the export volume skyrocketed that year. The new level can hopefully become a new normal state in future.

Table 1   Titanium dioxide projects being constructed or planned and capacity to be phased out in China (kt/a)

Enterprise    Existing
capacity    Capacity
being
constructed    Capacity to
be phased
out    Expected time for
starting production     2015    2016    2017    Remarks
Sichuan Lomon Corporation Titanium Industry Co., Ltd.    300    50        To reach the design capacity in 2015    50            
China Nuclear Titanium Dioxide Co., Ltd.    200    100        To put on stream at the end of 2016            100    Gansu Dongfang Titanium Industry Co., Ltd.
GPRO Titanium Industry Co., Ltd.    100    80        To start trial production in Q2 of 2015    80            Xuzhou Titanium Dioxide Chemical Co., Ltd.
Billions Chemical Co., Ltd.    200    60        To start production in Q1 of 2015    60            Chlorination process
Shandong Dongguide Group Co., Ltd.     180    50        To start production in H2 of 2015    50            
Pangang Titanium Industry Co., Ltd.    140    100        To put on stream in 2015        60        Sulfuric acid process, the original 40 kt/a unit to be relocated at the time of completion
Pangang Titanium Industry Co., Ltd.    140    100        Not yet finalized                Chlorination process
Henan Luohe City Xingmao Titanium Industry Co., Ltd.     120    100        To be completed at the end of 2015        40        Chlorination process second-phase,  the 60 kt/a sulfuric acid process unit to be phased out at the time of completion
Shandong Jinhai Titanium Resources Technology Co., Ltd.    100    50        To be completed in March 2015    50            
Guangdong Huiyun Titanium Industry Co., Ltd.    65    15        To be completed at the end of 2015        15        Anatase
Yunnan Dahutong Titanium Industry Co., Ltd.    30    30        To put on stream in 2015    30            Anatase
Jiangxi Tikon Titanium Co., Ltd.     70        20        -20            Anatase
Guangxi Detian Chemical Cycle Co., Ltd.    20        20        -20            Anatase
CNSIC Hunan Zhuzhou Chemical Industry Group Co., Ltd.    60        30        -30            Anatase
Total net new capacity                    250    115    100    



4. Raw material

The output of titanium ores in China reached over 4 000 kt in 2014 for the first time in history. The total import amount of various titanium ores was over 2 020 kt in 2014, a drop of 10.93% from 2013. The self-sufficiency rate of titanium ores was 67%.