Chris Wu, CCM International Ltd.10.12.11
The strong demand for titanium dioxide (TiO2) in recent has spurred China’s capacity and output of TiO2 to increase quickly. In 2010 China became the largest TiO2 producer in the world. During the first half of 2011, with 61 active producers, China’s capacity of TiO2 reached 2,192,000 tons per annum with an output of 862,600 tons.
Along with increased output and improved quality, China has also become the largest net exporter of TiO2. In the first half of 2011, China's export volume of TiO2 was 234,900 tons and import volume was 135,691 tons.
At the same time, after experiencing a year of sharp increases, the domestic price of rutile TiO2 in China reached USD3088/t, which set a new record. However, prices have dropped in the past two months.
Despite such positive growth indicators, China's production technology is outdated, and most of China's producers adopt a sulfate process to produce TiO2. With blind capacity expansion, China's TiO2 industry is now burdened by overcapacity as well as stiff domestic competition. (See Figure 1 Capacity and output of TiO2 in China, 2006~H1, 2011)
China's TiO2 capacity increased from 1,268,400t/a in 2006 to 2,071,000t/a in 2010, with a CAGR of 13.04 percent. Also from 2006 to 2010, output increased from 810,800 tons to 1,466,000 tons, with a CAGR of 15.59 percent.
On the heels of national policies designed to boost domestic demand and other relevant policies adopted in 2010, the TiO2 downstream industries, especially the paint and coatings industry and plastics industry, had been developing rapidly. The demand for TiO2 from these industries continues to get stronger and stronger. In 2010, China's output increased further, up 10.23 percent compared to 2009. And in the first half of 2011, stimulated by the continuously increasing price of TiO2, the output of TiO2 has increased further, with a growth rate of 28.6 percent compared with the first half of 2010.
In China, from June 2009 to July 2011, the average prices of domestic rutile TiO2 and anatase TiO2 witnessed an increasing trend. Particularly during the period from Aug. 2010 to July 2011, the average price of domestic rutile TiO2 increased from USD2,109/t to USD3,549/t, with a growth rate of 68.35 percent; the average price of domestic anatase TiO2 increased from USD1,570/t to USD3,064/t, with a growth rate of 95.12 percent. Such staggering increases are due to tight supply of titanium ore, the high price of raw materials and strong overseas demand. (See Figure 2 Price trends of TiO2 in China, Jun. 2009~Sep. 2011)
In Aug. 2011, while some international producers such as DuPont continued to raise their TiO2 prices, domestic TiO2 prices dropped due to weak demand. According to CCM's investigation, in Aug. 2011, the TiO2 stock in China is large and the actual supply of TiO2 in China has exceeded the demand.
From 2006 to 2010, China's annual TiO2 import volume stayed in the range of 250,000 to 300,000 tons. By contrast, from 2008 to 2010, with increasing domestic output and improving quality, China's export volume of TiO2 witnessed an increasing trend. In 2010 and 2011, China's export volume of TiO2 increased sharply. In 2010, China's export volume of TiO2 reached 327,307 tons, becoming the largest net exporter of TiO2 in the world. And in the first half of 2011, China's export volume was 234,900 tons, an increase of 83.74 percent compared with the first half of 2010. (See Figure 3 Import and export situation of TiO2 in China, 2006~H1, 2011)
As prices have been driven up many times by the main TiO2 producers in the world, the average import price of TiO2 in China witnessed a quick increasing trend from 2006 to 2010. From Jan. 2010 to June 2011, the import price of TiO2 increased more quickly. In July 2011, the average import price of TiO2 reached a new historical record of USD3059/t, with a growth rate of 35.31 percent compared with that in Jan. 2010.
As a result of the improved quality of domestic TiO2, a supply shortage in the world and continuously increasing international prices, China's TiO2 export price has increased quickly since 2009, especially from Sept. 2010 to June 2011. In June 2011, the average TiO2 export price reached USD3116/t.
The global financial crisis and debt crisis in the United States and Europe have impacted the world's TiO2 production since 2009. Some TiO2 plants in these regions have been closed, aggravating the tight supply of TiO2 in the world. This is the main driving factor for the international price increase.
In addition, all TiO2 producers in China have adopted a sulfate process to produce TiO2 except Jinzhou Titanium Industry Co., Ltd. More manufacturers are willing to use titanium ore and acid-soluble titanium slag mixture as raw materials. Though China's sulfate process and products made by it were greatly improved, it is still hard to develop further due to its high pollution. At the same time China's technology for chloride process is poor. Though there are some new projects with chloride process in China in the coming five years, the technologies of these projects are not complete as they have been introduced by foreign consulting companies.
CCM International Ltd. is dedicated to market research in China, as well as the Asia-Pacific Rim and global markets. With a staff of more than 150 professionals CCM offers market data, analysis, reports, newsletters, buyer-trader information and import/export analysis all through its new proprietary product ValoTracer. For more information go to CCM’s website at www.cnchemicals.com, or contact emarket29@cnchemicals.com.
Along with increased output and improved quality, China has also become the largest net exporter of TiO2. In the first half of 2011, China's export volume of TiO2 was 234,900 tons and import volume was 135,691 tons.
At the same time, after experiencing a year of sharp increases, the domestic price of rutile TiO2 in China reached USD3088/t, which set a new record. However, prices have dropped in the past two months.
Despite such positive growth indicators, China's production technology is outdated, and most of China's producers adopt a sulfate process to produce TiO2. With blind capacity expansion, China's TiO2 industry is now burdened by overcapacity as well as stiff domestic competition. (See Figure 1 Capacity and output of TiO2 in China, 2006~H1, 2011)
China's TiO2 capacity increased from 1,268,400t/a in 2006 to 2,071,000t/a in 2010, with a CAGR of 13.04 percent. Also from 2006 to 2010, output increased from 810,800 tons to 1,466,000 tons, with a CAGR of 15.59 percent.
On the heels of national policies designed to boost domestic demand and other relevant policies adopted in 2010, the TiO2 downstream industries, especially the paint and coatings industry and plastics industry, had been developing rapidly. The demand for TiO2 from these industries continues to get stronger and stronger. In 2010, China's output increased further, up 10.23 percent compared to 2009. And in the first half of 2011, stimulated by the continuously increasing price of TiO2, the output of TiO2 has increased further, with a growth rate of 28.6 percent compared with the first half of 2010.
In China, from June 2009 to July 2011, the average prices of domestic rutile TiO2 and anatase TiO2 witnessed an increasing trend. Particularly during the period from Aug. 2010 to July 2011, the average price of domestic rutile TiO2 increased from USD2,109/t to USD3,549/t, with a growth rate of 68.35 percent; the average price of domestic anatase TiO2 increased from USD1,570/t to USD3,064/t, with a growth rate of 95.12 percent. Such staggering increases are due to tight supply of titanium ore, the high price of raw materials and strong overseas demand. (See Figure 2 Price trends of TiO2 in China, Jun. 2009~Sep. 2011)
In Aug. 2011, while some international producers such as DuPont continued to raise their TiO2 prices, domestic TiO2 prices dropped due to weak demand. According to CCM's investigation, in Aug. 2011, the TiO2 stock in China is large and the actual supply of TiO2 in China has exceeded the demand.
From 2006 to 2010, China's annual TiO2 import volume stayed in the range of 250,000 to 300,000 tons. By contrast, from 2008 to 2010, with increasing domestic output and improving quality, China's export volume of TiO2 witnessed an increasing trend. In 2010 and 2011, China's export volume of TiO2 increased sharply. In 2010, China's export volume of TiO2 reached 327,307 tons, becoming the largest net exporter of TiO2 in the world. And in the first half of 2011, China's export volume was 234,900 tons, an increase of 83.74 percent compared with the first half of 2010. (See Figure 3 Import and export situation of TiO2 in China, 2006~H1, 2011)
As prices have been driven up many times by the main TiO2 producers in the world, the average import price of TiO2 in China witnessed a quick increasing trend from 2006 to 2010. From Jan. 2010 to June 2011, the import price of TiO2 increased more quickly. In July 2011, the average import price of TiO2 reached a new historical record of USD3059/t, with a growth rate of 35.31 percent compared with that in Jan. 2010.
As a result of the improved quality of domestic TiO2, a supply shortage in the world and continuously increasing international prices, China's TiO2 export price has increased quickly since 2009, especially from Sept. 2010 to June 2011. In June 2011, the average TiO2 export price reached USD3116/t.
The global financial crisis and debt crisis in the United States and Europe have impacted the world's TiO2 production since 2009. Some TiO2 plants in these regions have been closed, aggravating the tight supply of TiO2 in the world. This is the main driving factor for the international price increase.
In addition, all TiO2 producers in China have adopted a sulfate process to produce TiO2 except Jinzhou Titanium Industry Co., Ltd. More manufacturers are willing to use titanium ore and acid-soluble titanium slag mixture as raw materials. Though China's sulfate process and products made by it were greatly improved, it is still hard to develop further due to its high pollution. At the same time China's technology for chloride process is poor. Though there are some new projects with chloride process in China in the coming five years, the technologies of these projects are not complete as they have been introduced by foreign consulting companies.
CCM International Ltd. is dedicated to market research in China, as well as the Asia-Pacific Rim and global markets. With a staff of more than 150 professionals CCM offers market data, analysis, reports, newsletters, buyer-trader information and import/export analysis all through its new proprietary product ValoTracer. For more information go to CCM’s website at www.cnchemicals.com, or contact emarket29@cnchemicals.com.
