Iron Oxide Industry Development in 2016
Year:2017 ISSUE:10
COLUMN:INORGANICS
Click:353    DateTime:Jun.15,2017
Iron Oxide Industry Development in 2016

By Lin Zhihua, Iron Oxide Industry Sub-association, China Coating Industry Association

China had 700kt/a iron oxide capacity in 2016, a YoY decrease of 50kt; output was 620kt, down by 40kt; sales revenue was RMB3.57 billion, down 1.65%. Apparent consumption was 390kt, down by about 11.36%. For details see Table 1.
Iron oxide exports grew 8.26% by volume in 2016, while the value fell 1.88%; for details see Table 2.
Since the third quarter of 2016, prices of raw materials for the production of iron oxide jumped. Tin prices increased from RMB1 950/t to RMB 2 200 /t, ferrous sulfate rose from RMB190/t to RMB210 /t, liquid caustic raised from RMB800/t to RMB1 200/t, coal rose to RMB1050/t (6000 kcal standard coal). With the implementation of the new transport policy, transportation costs of pigment enterprises for long distances and short distances, direct, climbed by 35% ~ 38%.
The prices of iron oxide yellow from a small or medium-sized enterprise is RMB5700 ~ 5 800/t. Due to the rising costs of raw materials and energy, even if the prices were adjusted to RMB6 000/t, there is no profit to be had. When the price is at least RMB6 200/t, profit is small.
Under the “new normal” economy, China's iron oxide industry faces a slowing market growth, excess capacity and other challenges. The pigment market will not turn favourable this year.
Scientific/technological innovation is the main driving force of the supply side reform in the iron oxide industry. In 2016, an iron oxide yellow workshop was upgraded and technically reformed by Zhejiang Huayuan Company; overall business was transformed and upgraded in Jiangsu Yuxing Group; environmental protection equipment was transformed successfully in Hunan Sanhuan company; an intelligent workshop for iron oxide yellow was built by Jiangsu Yixing Huayi Technology Company; equipment for processing heat-resistant products was upgraded by Changshu Rock Wood Company, Nantong Baoju Ltd. and Tongling Rui Technology Company; and both new technology and new equipment were used in a construction project by Guangdong Jiangmen Everbright Chemical Co., Ltd. Everyone wants to embrace high-end advanced technology, to accelerate transformation of traditional industries, to improve industrial technology, to upgrade functional pigment products and to promote steady and healthy economic development of the iron oxide industry.
During the "13th Five-Year" (2016-2020) period, the iron oxide industry intends to leap from quantitative to qualitative values.The aims are to improve capabilities for technological innovation, adjust product structure and improve product quality.     

Table 1   Apparent consumption of iron oxide in China, 2016 (kt)

Item    Building materials    Coatings    Rubber and plastics    Ceramics and paper    Others    Total
2016    111.2    145.5    77.6    40.6    15.1    390
2015    126.0    165.2    73.6    67.2    12.5    440
YoY/%    -117.4    -119.2    54.3    -352.5    208    -113.6?


Table 2  Exports of iron oxide from China, 2016

Export in 2016    Export in 2015    YoY (%)    Export average unit price (US$/t)
Volume (kt)    Value (US$)    Volume (kt)    Value (US$)    volume    value    2016    2015
324.36    32 444    299.24    33 064    8.26    -1.88    1 000.25    1 105.0