Analysis of Development and Change Direction of Titanium Dioxide Industry in China

In 2011, the titanium dioxide industry was an eventful event. At the end of October, it was suspected that the use of unlicensed DuPont chlorination titanium dioxide technology, the chairman of Panzhihua Iron and Steel Co., Ltd. Titanium Corporation was detained during business negotiations in the United States, but also to titanium The white powder industry is really a "fire".

In recent years, no matter the production scale or actual output of titanium dioxide in China, the growth has been extremely rapid, and it has become one of the most important forces in the titanium dioxide industry in the world. According to statistics from the China Coating Industry Association Titanium Dioxide Industry Branch, in the next five years, the new production capacity of titanium dioxide in China's mainland will be 1.5 million to 2 million tons, including 300,000 to 500,000 tons of chlorination titanium dioxide, and the total production capacity in 2015 will reach 370. 10,000 to 4.1 million tons. However, although China is already the largest producer of titanium dioxide, it is constrained by the technological level. More than 98% of the production capacity is still the ** process that the United States abandoned in the 1990s.

Market demand is weak

In China, more than 67% of pigment grade titanium dioxide is used in the coatings industry, of which 38% is used for architectural coatings and 11% is used for anticorrosive coatings. In recent years, with the development of construction, industry and other fields, the coating industry has developed rapidly. From the total output of 7,554,400 tons in 2009 to 9,966,300 tons in 2010, the titanium dioxide industry is advancing with the hot coating market. The golden age of development. The annual growth rate of total coating output of more than 2 million tons makes the industry look forward to an increase in the titanium dioxide industry in 2011. However, the debt crisis in Europe has intensified. As the crisis continues to escalate and the international market is weak, the titanium dioxide industry is on the verge of crisis.

At the same time, as titanium dioxide is an important raw material for paint production, it is closely related to the development of real estate. When the real estate industry grows at high speed, titanium dioxide also grows and develops. The domestic titanium dioxide began to be tight in the second half of 2009. Since the real estate industry has just recovered from the downturn in 2008, the retaliatory rebound of real estate followed by a geometric increase in the volume of housing transactions, and the price has been rising by leaps and bounds. Titanium dioxide sales are also rising.

After the purchase restriction measures were introduced in 2011, there was a stage of stalemate in real estate. At the same time, there was a price cut for titanium dioxide in July. In October 2011, the price of titanium dioxide was already close to the price at the beginning of the year. In November, most manufacturers across the country have corresponding price adjustments. Downstream demand market is weak, and the company's profit space is becoming more and more severe. It is expected that titanium dioxide will fall below the price of 16,000 yuan/ton at the end of the year.

It is understood that due to many negative factors, the current market for raw materials titanium concentrate titanium concentrate colder, the price continues to decline. At the same time, titanium dioxide owns overcapacity in its own industry, and weak demand in the downstream, coupled with the downturn in the real estate market and the accumulation of many negative factors, makes the overall price of titanium dioxide difficult to rise significantly. It is expected that there will be no improvement at the end of this year, and the price of titanium dioxide will be stabilized at the current price.

Sharp increase in production capacity increases risk

According to preliminary statistics, the titanium dioxide production of the whole industry will record a new record in 2011, reaching 1.6 million to 1.8 million tons, of which rutile products will reach more than 1 million tons. With the advancement of titanium dioxide industry, the total production capacity of titanium dioxide in China will increase to 4.1 million tons by 2015, according to the ** method of 60% to 70% operating rate, chlorination 75% to 80% operating rate calculation, by then, titanium The annual output of white powder will reach 2.5 million to 3 million tons. Expert analysis pointed out that the sharp increase in production capacity will increase the operational risks of the industry.

Affected by the increase in price of raw titanium ore (slag), the market for titanium dioxide in the first half of 2011 continued to rise. Anatase-type products have rapidly increased from RMB 95,500 to RMB 105,500 last year to RMB 18,500 to RMB 20,000. The price has doubled; the rutile-type product has increased from RMB 13,000 to RMB 14,000 last year to RMB 23,000 to RMB 24,000 when it was the highest. The increase reached 10,000 yuan.

In recent years, with the increase of production capacity, the dependence on the import of titanium ore raw materials consumed by the titanium dioxide industry in China has become higher and higher. Although compared with 3-4 years ago, the import channels of titanium ore are diversified, and Australia, Vietnam and India have become the major sources of imports. However, Vietnam will adopt a titanium ore export restriction policy in 2012, which will have a greater impact on China’s titanium ore imports. While contending for big projects across the country, the issue of raw material risks became prominent.

Some analysts pointed out that according to the recent domestic and international economic development, if the country does not issue new relevant policies and measures, the industry will maintain its downward trend from the second half of 2011 to the beginning of 2012. With the growing tightening of titanium ore exports and the weak demand under the influence of the European debt crisis, the dramatic increase in titanium dioxide production capacity in China will increase the risk of industrial operations.

Is at the critical stage of transformation and upgrading

Xie Xiangyun, chairman of the Titanium Dioxide Industry Branch of the China National Coatings Industry Association, said that although production has increased significantly in recent years, domestic competitiveness has not been increased. Chinese titanium dioxide is currently in a critical period of transformation and upgrading.

The first is the upgrade period of product structure and technology. At present, China has changed from predominantly TiO2 titanium dioxide to rutile titanium dioxide, and rutile titanium dioxide production has exceeded 70%. This proportion is still rising, but products are still concentrated in In the low grade, high-end titanium dioxide is still imported by a large number of companies. The obvious advantages of domestic product quality are mainly in several large titanium dioxide enterprises.

In addition, chlorinated titanium dioxide products are currently only 30,000 tons in the country, insignificant in the total 1.47 million tons, the next four or five companies plan to develop chlorinated titanium dioxide business, planning capacity of more than 600,000 tons, so This period is a crucial period for changing the product structure, upgrading China's technological level, introducing advanced foreign technology, and digesting and undertaking.

The second is the period of energy saving, emission reduction and environmental protection. Energy conservation, emission reduction, cleaner production, environmental protection, and sustainable development are the clear tasks set by the state's "Twelfth Five-Year Plan". In view of the characteristics of titanium resources in China, the status quo of the titanium dioxide industry, and the difficulty in developing and introducing the chloridizing titanium dioxide technology, the development of the titanium dioxide industry will continue to be dominated by the ** method for some time to come. How to effectively use the waste method produced by the ** method? Things and guide the normative enterprises to take the path of circular economy development, the state and industry organizations are actively working to encourage enterprises to take the road of circular economy in many aspects of policies and regulations. In this process, some companies that fail to meet the standard will be eliminated, which will put more pressure on the survival of the enterprise. For those companies with social responsibility, it is a good time to perfect the industrial layout and enhance the competitive strength.

The third is the opportunity to implement mergers and acquisitions and restructuring. Although China has become a major producer and producer of titanium dioxide in the world, there are still many problems, and there is a significant gap compared with traditional titanium dioxide production and consumption regions such as Europe and the United States. In 2010, China’s output reached 1,474,300 tons, an increase of 40.9% over the previous year. However, the productivity of production was declining. The total output of the top 10 producers was 675,500 tons, accounting for 45.8% of the country’s total output, which was a decrease from the previous year. 5.6 percentage points. According to statistics, there are 60 titanium dioxide producers in China, and only three of them have a single plant output of more than 100,000 tons, showing a pattern of multiple, small, mixed and scattered. Due to the rapid growth in demand for titanium dioxide in China in the past 10 years and the high profits, many companies have entered the market with outdated development. The problem of out-of-order development is more pronounced. It is mainly due to the serious construction of low-end titanium dioxide re-construction. Therefore, although the scale has gone up, The international competitiveness has not improved at the same time. The titanium dioxide industry in China is a highly free-competitive industry. There are few thresholds in mergers and acquisitions, and market-oriented investment and capital operation are easier to achieve.

According to foreign development experience, merger and reorganization of the titanium dioxide industry is becoming a major trend. In the next 5 to 10 years, the joint reorganization between titanium dioxide enterprises will be more frequent, and enterprises with technology, resources, and markets will come to the fore and domestically. There will be three to five titanium dioxide companies with a 300,000-ton or above grade, and a series of low-cost expansion methods, such as mergers and acquisitions, joint reorganizations, will become the main approach. At present, this period is a good opportunity for the implementation of industrial upgrading, M&A and restructuring.