Titanium dioxide China News Sample - Published by CCM International Ltd

TiO2 China Monthly Report Vol.2 Issue 12. 2009

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Supply & Demand

1

China’s TiO2 trade in October ISK’s TiO2 distribution in China

1 2

Upstream

3

Titanium resource draws wide attention TiO2 industry is expected to enjoys ample sulfuric acid supply in the long-term Huge new mining resource to be proved Titanium metal industry sets target for 12th Five Year Ching-Hing acquires titanium mining right

3 4 4 5 5

Company Dynamic

5

Jinan Yuxing to start rutile TiO2 pilot production Pangang Titanium’s rutile TiO2 output hits new record Rutile TiO2 competition to be intensified

5 5 6

Downstream

7

Furniture coating to boost TiO2 consumption Indian coating industry boosts TiO2 consumption Yip’s Chemical achieves huge profit growth in coating

7 8 8

Price Update

8

Price update in December 2009

8

Policy & Legislation

10

Policy interpretation related to TiO2 industry -- By Liu Changhe Raised transport cost curbs TiO2 price downturn China continues tariff-free titanium slag import

10 10 10 11

Special Report

11

Review of Chinese TiO2 industry 2009 ----- policy, raw material, production Profitability to shrink in Q1 2010

11 11 12

Latest reports related to TiO2 from CCM

- Production and Market of Masterbatch in China Made in July 2008

- The Survey of Titanium Dioxide in China-3rd Edition Published in April 2009

- The Future of Carbon Black in China The second edition was made in June 2008.

- Production and Market of Pigment in China The second edition was made in June 2008.

Trade Report of product related to TiO2 from CCM: - Titanium Dioxide Production and Trade in China 2007 June.2009

- Commodity Titanium Dioxide in China The third edition was made in June 2008.

CCM coming newsletter related to TiO2 - Inks China News

- Specialty Titanium Dioxide in China The third edition was made in June 2008.

Contact us for details of the researches in year 2009 from CCM.

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Editor Note Welcome to the December issue of the TiO2 China Monthly Report.

The domestic TiO2 industry has recovered rapidly from the financial crisis in H1 2009, has experienced ,thanks to a series of supporting policies released by the government, a rebound in growth in H2 2009.

On November 26th, 2009, China’s State Council has set its target on carbon emission reduction that China will cut its 2005 unit carbon emission of GDP by 40%~45% by the end of 2020. As a 2H1R industry (resourcebased industries with high energy consumption and heavy pollution), the TiO2 industry will be forced to become more environmentally friendly as it confronts stricter environmental protection requirements.

With TiO2 demand entering a slack season, TiO2 price weakened starting in November 2009 and will keep this downtrend throughout Q1 2010. TiO2 capacity expansion will continue in 2010 in China, especially for rutile TiO2, which will intensify industry competition . Coupled with rising production costs, this will cause manufacturers’ profitability to shrink. However, as a consequence the TiO2 industry may gain more government support such as resumption of a tax rebate for export next year.

Headlines of TiO2 China Monthly Report 0912 •

China’s TiO2 imports show steady growth, while exports decline in October.

•

As an essential raw material of TiO2, the gradually exhausted titanium resource with rising value is attracting wide attention in China.

•

The TiO2 industry enjoys an ample supply of sulfuric acid, which is expected to continue for five to ten years.

•

China’s rutile TiO2 capacity is expected to soar next year, which will intensify domestic competition.

•

Chinese furniture coating is to boost TiO2 consumption, which drives Huihuang Xiangying to expand production scale.

•

China is likely to promulgate Standards for Tax Rebate of TiO2 Export and Entry Criteria for TiO2 Production soon.

•

Boosted by supporting policies, China’s TiO2 production has recovered rapidly by the end of 2009, drawing wide attention.

•

TiO2 profitability is expected to shrink in Q1 2010 with price downturn.

The capacity expansion will certainly boost titanium ore demand, which is in increasingly tight supply. This has drawn wide attention from related producers. However, TiO2 industry will enjoy ample supply of another raw material, namely sulfuric acid, for five to ten years.

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Main companies covered in this issue

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Supply & Demand China’s TiO2 trade in October

C

hina’s TiO2 import and export trends have diverged in October, with import volume steadily increasing, while export volume decreased.

The booming real estate industry and automobile industry have driven, and will continue to drive coating, plastic and papermaking (mainly decor paper) consumption upward. It is worth noting that TiO2 for some particular end-use sectors is mainly imported from a few manufacturers. For instance, 95% imported TiO2 for papermaking in 2009 is produced by DuPont in Mexico (TABLE 1).

Thanks to the stable demand and the negotiable price (despite several price hikes announced by multinational importers), TiO2 import volume in October hit a record high for the past three years of 25,099 tonnes, up 2.1% over this September.

However, owing to weak imports in Q1 2009, the cumulative import volume in the first ten months of 2009 is still lower than that in the same period of 2008.

TABLE 1: China’s TiO2 import situation by end use sector, 2007-Oct. 2009, tonne Segment

TiO2 export volume in October declines by 13.4% over September, only amounting to 12,883 tonnes. The export volume downtrend is caused by continually rising export price in October. Despite the downtrend, cumulative export volume

by October in 2009 has seen a remarkable 41.6% growth year on year.

Coating Plastic Rubber Fiber Papermaking Ink Leather Cosmetics Food Other Rutile (Uncertain application) Anatase(Uncertain application)

In the autumn, domestic TiO2 manufacturers tried to narrow the gap between import price and export price by continually raising export price. Average export price rose 5.0% in October, following a 3.7% increase in September. Average import price declined slightly in October, despite several rounds of announced price hikes, as consumers refused to accept the increases (FIGURE 1).

Import growth stable

12,589

2,415

14,134

1,836

6,692

13,569 5,607 1,348 1,345 207 87 1,725

2,588 1,700 324 174 45 180 473

11,919 7,920 1,800 987 246 1,187 1,678

1,603 1,280 196 427 28 0 152

5,657 6,600 1,581 617 616 358 1,854

106,831 6,546

21,253 102,550 1,188

3,241

12,348 100,681 473

2,500

Source: China Customs, CCM International

As predicted previously (See issue 0911, page 1 ), China’s TiO2 imports keep increasing in Q4 2009.

There is an obvious TiO2 import volume increase from Australia and Mexico because of their product’s price advantage, while imports from U.S. and Japan decrease a lot (TABLE 2). With the establishment of CAFTA from January 2010 that enables free tariff for TiO2 trade between China and ASEAN countries, TiO2 imports from Malaysia and Singapore will increase in the future.

Encountering consumer resistance to price hikes in China; many TiO2 multinationals adopted flexible prices in actual deals to maintain their market position. With a rising domestic operating rate, TiO2 supply in China is ample and competition is intense. Accordingly, the average import price of TiO2 decreased by USD48/t over September.

35,000 30,000 25,000 20,000

1,500

15,000

1,000

10,000

500

5,000

0

Ja n07 M ar -0 7 M ay -0 7 Ju l-0 Se 7 p07 No v07 Ja n08 M ar -0 8 M ay -0 8 Ju l-0 Se 8 p08 No v08 Ja n09 M ar -0 9 M ay -0 9 Ju l-0 9 Se p09

0

Import

Export

Import price

Export price

Source: China Customs, CCM International

CCM International Limited

1

Price, USD/t

In the coming months, China’s TiO2 demand will remain robust, which will certainly drive up TiO2 imports. The strong demand, coupled with DuPont’s announced 3,000 price hike, which has been in effect in Asia since December 1st, 2009, will 2,500 provide room for import prices to rise, in the coming months, though the 2,000 extent might not be large .

FIGURE 1: China’s TiO2 trade situation, Jan. 2007-October 2009

Volume, tonne

JanNov- Jan-Oct NovJanOct 07 Dec 07 08 Dec 08 Oct 09 53,670 10,398 50,090 6,224 49,388 41,998 7,987 38,256 5,097 31,295

Exports Decline --Export Price Increases Reduce Chinese Export Volume in October.

Driven by increasing global price and booming domestic demand, some Chinese TiO2 manufacturers have initiated TiO2 price increases in October, especially large manufacturers, such as Shandong Dongjia and Henan Billions.

Accordingly, average export price of TiO2 in October rose by USD77/t over September, leading to 13.4% decline in export volume. www.cnchemicals.com

TiO2 China Monthly Report

Vol.2 Issue 12.2009

It is worth noting that some TiO2 manufacturers who initiated the price hike have not experienced a volume decline as they have endeavored to explore new global markets. Take Shandong Dongjia for example, its average export price increased by USD62/t and export volume increased slightly to 1,094 tonnes in October.

TABLE 2: China’s TiO2 import situation by origin, 2007-Oct. 2009, tonne Origin Taiwan Australia U.S.

Jan-Oct 07 Nov-Dec 07 Jan-Oct 08 Nov-Dec 08

Japan Germany Mexico Malaysia UK Singapore Saudi Arabia Other

66,645 48,983

13,521 9,015

33,971

6,191

35,861 13,096 5,359 8,296 2,818 7,035 9,207 14,251

6,191 2,660 1,650 1,288 781 1,527 2,587 3,312

59,640 46,510

Jan-Oct 09

5,737 4,957

56,617 52,076

41,612

7,456

29,780

31,776 10,819 9,100 6,661 6,501 3,172 7,783 10,433

3,283 1,681 2,000 393 301 1,358 1,280 1,218

22,881 7,669 9,240 7,093 5,894 6,126 5,013 5,448

Though total export volume obviously declined, the export value shows a relatively modest decline of only 9.1%, because of the price hike. Accordingly, domestic manufacturers might continue Source: China Customs, CCM International to raise export prices given the booming domestic market. Meanwhile, domestic manufacturers are seeking to enhance competitiveness TABLE 3: China’s TiO2 export situation by destination, 2007-Oct. 2009, tonne by improving product quality Region Jan-Oct 07 Nov-Dec 07 Jan-Oct 08 Nov-Dec 08 Jan-Oct 09 instead of relying solely on Volume Share Volume Share Volume Share Volume Share Volume Share price based competition.

Asia Pacific has been the main export destination of Chinese TiO2. Domestic manufacturers will continue to consolidate current market share in Asia Pacific and make effort to exploit new markets in other regions (TABLE 3).

Africa Asia Pacific Europe Middle East North America South America

2,255

1.45%

64,948 41.77%

422

1.86%

3,852 16.97%

17,027 10.95%

2,375 10.47%

25,025 16.10%

4,042 17.81%

7.60%

2.62%

5.25%

3,074

2.53%

5,739 48.41%

62,713

51.56%

1,367 11.53%

11,545

9.49%

9.72%

667 5.63%

12,225

10.05%

14,194 16.52%

2,757 23.25%

20,332

16.72%

704 5.94%

11,750

9.66%

10,136 44.66% 37,652 43.82%

34,402 22.13%

11,816

2,249

1,867

8.23%

16,279 18.95% 8,347

7,196

8.38%

622

Source: China Customs, CCM International

Despite implementing the largest export price increases, Henan Billions has surpassed Sichuan Lomon to be the largest TiO2 exporter

by October 2009. It has not only consolidated its share in major markets such Turkey and Italy, where it now has the largest share amongst importers , but Henan Billions has also made great efforts to exploit new markets worldwide. By October, Henan Billions’ sales network has covered over fifty countries or regions worldwide.

China’s TiO2 export is expected to keep stable with a more profitable price.

TABLE 4: Export situation of China’s TiO2 manufacturers, 2007-Oct. 2009, tonne Manufacturer

Jan-Oct 07

Nov-Dec 07 Jan-Oct 08 Nov-Dec 08 Jan-Oct 09

Henan Billions Sichuan Lomon Shandong Dongjia

7,007 21,522

1,217 3,935

15,410 6,573

20,443

2,151

Guangxi Jinmao Wuxi Haopu Guangxi Yazhao Zhenjiang Titanium Pangang Group Shanghai Jianghu Pinggui Feidie Other

4,721 1,766 6,861 9,393 10,781 2,855 4,477 65,647

659 386 1,009 657 1,111 431 795 10,343

2,080 1,005

17,285 16,938

3,990

775

10,805

4,732 1,344 6,500 1,677 2,596 3,398 3,663 36,036

493 191 361 381 269 210 662 5,429

8,467 5,934 5,166 4,295 4,359 4,202 3,904 40,285

Source: China Customs, CCM International

ISK’s TiO2 distribution in China

I

FIGURE 2: Distribution channels of ISK’s TiO2 in China, Jan.-Oct.2009

shihara Sangyo Kaisha Ltd. (ISK) has had 13.9% of China’s TiO2 import market during Jan. - Oct. 2009, with import volume amounting to 28,987 tonnes during this period. Most of ISK’s total import volume (78.9%) comes from Japan, as ISK’s R-930 production in Japan is specially developed for Chinese consumers, and the rest is from its Singapore plant.

End user 23.50%

ISK has set up strategic cooperation with a local trade Trader company, Hangzhou Harmony Chemical Raw Material Co, 76.50% Ltd. (Harmony Chemical), to develop its business in China.

This has indeed helped ISK expand its Chinese market share. Source: China Customs, CCM International Fifty five percent of ISK’s TiO2 business in China was through Harmony Chemical by October 2009.

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Upstream Titanium resource draws wide attention

A

s an essential raw material for TiO2 production, titanium ores are being depleted. This has boosted ore values, and has drawn wide attention from firms both inside and outside the TiO2 industry.

By 2009, the proven titanium reserves in Panzhihua City have been dominated by a few companies, mainly Pangang Group, Sichuan Lomon, and Hongda Group.

High grade titanium ore can contribute to the quality of TiO2 because of its lower level of impurities, which can improve TiO2 quality. To pursue long-term development, titanium ore holders with stronger vertical integration capability will be able to more effectively raise the recovery rate, or yield, of titanium ore and improve TiO2 quality, compared to smaller players.

At present, the domestic recovery rate of titanium ore is estimated at 15% which is quite low. Current domestic titanium ore mining and refining capacity cannot meet domestic demand, resulting in China’s annual imports of titanium ore of over one million tonnes, or about 50% of domestic demand.

In early 2009, QIT-Fer et Titane Inc. (QIT), one of the world’s largest titanium slag manufacturers and a wholly owned subsidiary of Rio Tinto, suspended its titanium resource exploitation and titanium slag production in Canada for eight weeks from July 12 to September 8, 2009.

Facing limited titanium resource, TiO2 manufacturers would make efforts to raise the recovery rate in order to realize TiO2 industry’s sustainable development. Meanwhile, TiO2 manufacturers can utilize more high-grade titanium ore, which can help them improve TiO2 quality to some extent.

Likewise, to maximize titanium resource value, private investors will also work hard to raise recovery rate of titanium resource.

Import volume of titanium slag from Canada decreased to 7,365 tonnes in first eight months of 2009 from 34,214 tonnes in the prior year. QIT’s supply reduction pushed up import prices of titanium slag from Canada into China during that period, thus leading to higher production costs for Chinese industry...

With the importance of titanium resource widely known and more funds injected, titanium resource recovery rate is expected to be raised, which will benefit the long-term development of the TiO2 industry. For example, Panzhihua government has aimed to raise the recovery rate to 65% by 2020. In the future, with the rising recovery rate and expanding exploitation capacity, domestic titanium ore supply will meet the entire domestic demand, as China holds 35% of world’s titanium reserves.

The heavy dependence on imported titanium feedstocks has put domestic feedstock consumers in a vulnerable position, arousing increasing concerns about the availability of titanium feedstocks. In addition, depleted ore reserves, and soaring growing demand indicate significant potential for value appreciation of titanium ore reserves. Therefore, many private investment funds are attracted to invest in TABLE 5: TiO2 manufacturers with their own titanium resource, 2009 this field.

Company

For instance, China VTM Mining raised funds through becoming listed in Hong Kong, in order to expand its titanium ore exploitation and titanium slag production (See issue 0910, page 6), and Ching-Hing shifted to titanium ore exploitation through acquiring Greater China Mining Resource Limited (See issue 0911, page 9), etc.

Reserves

Pangang Group

Baima Mining: 1.5 billion tonnes (average grade 6.2%) Panzhihua Mining: 1.3 billion tonnes (average grade 12%) Sichuan Lomon Northern area of Hongge Mining: 2.0 billion tonnes (average grade 11%)* Yunnan Dahutong Yunnan Fuming County Shandong Dongjia Hebei Chengde City Fumin Longteng Titanium Yunnan Fuming County

Additionally, Hongda Group, China’s third largest electrolytic zinc company, in August 2008, has set up Note: *Southern area of Hongge Mining is captured by Hongda Group a joint venture with other nine companies including (2.0 billion tonnes*11% grade) Panzhihua Gangcheng Group Co, Ltd, Panzhihua Jinjiang Source: CCM International Titanium Co, Ltd, etc. It claimed that over USD 3.22 billion will be injected in this joint venture to exploit ores containing titanium in the southern area of Hongge Mining, Panzhihua City.

Some domestic TiO2 manufacturers have also begun to work hard on developing more titanium ore reserves.

For example, Pangang Group plans to acquire titanium mining exploitation rights in New Zealand by cooperating with New Zealand Steel Mining Limited. Yunnan has started up a new TiO2 plant and a titanium slag plant in Panzhihua City, Sichuan Province, to utilize local Ti ore resources, even though it already has titanium exploitation rights in Yunnan Province. Some new entrants also have their own captive titanium mines, such as Fumin Longteng Titanium Co., Ltd .

(TABLE 5)

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

TiO2 industry is expected to enjoys ample sulfuric acid supply in the long-term

Y

unfu Pyrite Enterprise Group Corporation (Yunfu Pyrite) started pilot production of its 400,000t/a sulfuric acid production line on November 25th, 2009.

This production line using pyrite as raw material is one of the largest production lines in China.

of nearly 70 million t/a, shared by pyrite-based sulfuric acid (31.3%), sulfuric acid through sulfur-burning (38.7%) and by product sulfuric acid from smelting gas (28.7%). By 2012, China’s sulfuric acid capacity is expected to reach 90 million t/a, with pyrite-based sulfuric acid increasing by 8 million tonnes, sulfur-burning sulfuric acid by 5 million tonnes and smelting gas sulfuric acid by 7 million tonnes.

After the formal launch, Yunfu Pyrite, located in Yunfu City, will supply its sulfuric acid to Yunfu Huiyun Titanium Dioxide Co, Ltd. (Huiyun Titanium) that has anatase TiO2 capacity of 15,000t/a; and is to launch 30,000t/a rutile TiO2 production line in 2010. Huiyun Titanium will consume 200,000 tonnes sulfuric acid in TiO2 production annually by the end of 2010.

Meanwhile, Huiyun Titanium is to set up 200,000t/a sulfuric acid production line. Hence, Huiyun Titanium can enjoy plenteous sulfuric acid supply for its TiO2 production.

TiO2 manufacturers are to benefit greatly from the expected abundant sulfuric acid supply. TiO2 Price is expected to continue an uptrend for the foreseeable future and thus TiO2 manufacturers will improve their profitability with a stable sulfuric acid cost.

Huge new mining resource to be proved

The situation with Huiyun Titanium is emblematic of the whole TiO2 industry, which is beginning to experience loosenting sulfuric acid supply. This situation is expected to continue for five to ten years.

O

n December 2nd, 2009, Panzhihua City held a ceremony for initiating prospecting of vanadium titano-magnetite ore resource in Panzhihua-Xichang Region (Panxi Region).

The following factors account for the long-term abundant supply of sulfuric acid to the TiO2 industry.

According to Sichuan Bureau of Geology and Mineral Exploration and Development, the reserves of vanadium titano-magnetite ore resource in Panxi Region is expected to increase by an estimated amount of up to 19 billion tonnes valued at USD1,669 billion based on current price of vanadium titano-magnetite ore. If the new reserve is proved, total titanium resource ore reserve volume (about 10% of the total vanadium titano-magnetite ore) will triple to 1,9 billion tonnes o, thus promoting local TiO2 industry development in the future.

Firstly, raw material for sulfuric acid production is rich.

According to Sulfur 2009 International Conference and Exhibition held during November 8th-11th, 2009, in Vancouver, Canada, global sulfur supply will exceed demand for the next ten years, which helps to reduce the production cost sulfuric acid manufactured from burning sulfur. Global sulfur supply is expected to increase from 48 million tonnes in 2008 to 70 million tonnes in 2017, which might lead to a 15 million tonnes surplus by then, according to Mr. Clark from the Alberta Sulfur Research Center.

The prospecting is expected to be finished in the coming three to five years.

In addition, the nonferrous smelting industry will continue to drive increased production of sulfuric acid from smelting gas.

In general, producing one tonne nonferrous metals produces about three tonnes sulfuric acid. With the fast growth of the nonferrous smelting industry, China’s sulfuric acid output has doubled from 2003 to 2008. According to the multi-national mining and smelting firm Anglo-American, China will lead development of global nonferrous smelting for the next ten years, especially for copper smelting.

Early in May 2009, Panzhihua City has made its mid-range plan by 2020 for vanadium titanium industry, in which it is stated that Panzhihua government will invest USD39.98 billion in establishing a vanadium-titanium industrial cluster that can generate USD41 billion (RMB280 billion) sales revenue by 2020, as well as in raising recovery rate of vanadium from 47% to 55%, and that of titanium from 14% to 25%.

Capacity expansion of sulfuric acid with smelting gas helps sulfuric acid price avoid the influences from sulfur price fluctuation which are mainly caused by the price fluctuations of crude oil.

Secondly, the fertilizer industry, the main downstream consumer of sulfuric acid, will not see growth in demand for sulfuric acid. Generally, sulfuric acid used in fertilizer consumes 60-70% of the total national acid production.

China’s fertilizer industry has suffered from redundant construction and will enter a period of slow expansion. By the end of 2008, excess capacity of phosphate fertilizer and urea reached 13 million tonnes and 9 million tonnes respectively. Owing to fertilizer overcapacity, sulfuric acid consumption in fertilizer will not see significant growth.

Hence, sulfuric acid price is expected to remain stable for a long time to come.

By the end of 2008, China had annual sulfuric acid capacity CCM International Limited

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Company Dynamic

Titanium metal industry sets target for 12th Five Year

may be no new titanium

C

ore in titanium sponge

Association (CNMIA) sets

ore consumption will

its development target for

continue to be concentrated

titanium sponge during

A

TiO2 production in the new

in TiO2 production. In

the 12th Five Year Plan

Chemical Plant (Jinan

general, titanium sponge

Before the relocation, Jinan

Yuxing), it will start pilot

production utilizes high Ti

Yuxing had capacity of

production for its new

sponge capacity in the coming five years.

pollution to Xiaoqing River. As scheduled, Jinan

Jinan Yuxing to Yuxing starts relocation at start rutile TiO2 the end of December and pilot production will formally launch rutile

Hence, demand for titanium

hina Nonferrous

production will not see any

Metals Industry

major increase and titanium

ccording to Jinan

location in Q1 2010.

Yuxing General

According to the target,

content titanium slag (TiO2

CNMIA aims to keep

content higher than 90%) as

national total capacity of

20,000t/a for rutile TiO2 and rutile TiO2 production line 10,000t/a for anatase TiO2. with first phase capacity of

raw material and consumes

titanium sponge below

100,000t/a in December

about 10% of all titanium

Jinan Yuxing plans to invest

100,000t/a in the 12th Five

2009.

ore consumed in China.

in the second phase with capacity of 200,000t/a,

Year, indicating that there

In fact, the new production

aiming at a total capacity of line is part of Jinan Yuxing’s 300,000t/a by 2012. relocation project. Jinan Yuxing has to shut down its original production line for

a titanium mining right

Ching-Hing acquires titanium mining right

O

relocation, due to its heavy

in Ziyang County, Shaanxi Province (See issue 0911, page 9).

Pangang Titanium’s rutile TiO2 output hits new record

However, it is uncertain when the titanium ore can

n November 19th,

be exploited, as Ching-

2009, Ching-Hing

Hing has not obtained an

(Hong Kong) Limited

exploitation license from the

(Ching-Hing) successfully

government.

A

ccording to Pangang Group, Pangang Group Titanium Panzhihua Plant (Pangang Titanium)

produced 1,930 tonnes rutile TiO2 in November 2009, hitting a new monthly record.

acquired titanium mining rights in Ziyang County,

The news about the

Shaanxi Province.

acquisition has boosted a

Pangang Titanium’s current rutile TiO2 production line is the first phase project with capacity of 20,000t/a launched

171.4% growth of ChingAccording to Ching-Hing, it

Hing’s stock on the Stock

raises USD245.97 million for

Exchange of Hong Kong

acquiring the entire equity

after resumption of trading

interest in Greater China

on November 19th, 2009.

in December 2007. The product branded PTR308 is intended to be used in coatings and inks. Thanks to the soaring demand, Pangang Titanium has almost operated at full capacity this November 2009.

Mining Resource Ltd. which

Additionally, Pangang Group Mining Plant (Pangang

owns 95% share of Shaanxi

Mining) produced titanium concentrate ore of 25,590

Tai Sheng Da Mining

tonnes, which also hit a record high, in November 2009.

Company Limited who holds

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Rutile TiO2 competition to be intensified

A

ccording to CCM’s survey, rutile TiO2 capacity under

as is their usual strategy. This will do no good for their long-

construction in China currently has reached 385,000t/

term profitability and development.

a all of which is expected to be launched in 2010. China’s rutile TiO2 capacity will soar to 1,201,000t/a by the end of

Hence, China’s rutile TiO2 manufacturers, especially the new

2010, up 47.2% year on year (TABLE 6)

entrants, are suggested to improve product quality first and broaden distribution channels to cope with international

In November 2009, Hubei Wuhan Fangyuan Titanium

competition, especially in the emerging markets in developing

Dioxide Co., Ltd. (Wuhan Fangyuan) initiated pilot production

countries like India and others in Southeast Asia.

of its rutile production line, with the first phase capacity of TABLE 6: Rutile TiO2 capacity expansion of some manufacturers, 2010

20,000t/a.

Company

According to Mr. Yang, sales director of Wuhan Fangyuan, the company has started its rutile production line construction

Lomon Titanium Jinan Yuxing

early in 2007. But owing to difficulties with land acquisition and the outbreak of the financial crisis, it is not until TiO2

Panjin Titanium

demand rebounded rapidly in 2009 that Wuhan Fangyuan started the trial production.

Xingzhong Titanium Xichang Ruikang Fumin Zechang Jiangxi Tianguang Huiyun Titanium Pangang Titanium Wuhan Fangyuan Subtotal National total

Mr. Yang indicates that Wuhan Fangyuan used to be an anatase TiO2 manufacturer with capacity of 10,000t/a. To strengthen its competitiveness, Wuhan Fangyuan set up a rutile TiO2 production line with a design capacity of 60,000t/ a in 2007.

In fact, besides Wuhan Fangyuan, many other anatase TiO2

Capacity Incremental Remark 2010 capacity, t/a 120,000 40,000 Expansion Relocation & 100,000 80,000 expansion Expansion 45,000 25,000 (chloride process) 50,000 30,000 Expansion 60,000 60,000 New entrant 30,000 30,000 New entrant 50,000 50,000 New rutile line 30,000 30,000 New rutile line 40,000 20,000 Expansion 20,000 20,000 New rutile line 495,000 385,000 -1,201,000 385,000 --

Source: CCM International

manufacturers in China have shifted to rutile TiO2 production in the past two years, due to the intense competition in the anatase TiO2 market, by building new rutile TiO2 production lines or by engaging in TiO2 post treatment. Take for example, Anhui Annada Titanium Industry Co., Ltd. (Anhui Annada), a listed anatase TiO2 producer; it launched a rutile TiO2 production line in 2009, which has improved its profitability.

However, due to depressed TiO2 demand during the economic downturn, some projects have been postponed.

The fast expanding rutile TiO2 capacity will certainly intensify competition in Chinese market, and will likely restrict TiO2 price increases in 2010.

Based on CCM’s survey, China’s TiO2 apparent consumption in 2008 amounted to 1,216,000 tonnes, with rutile TiO2 at 59.5% of consumption or 720,000 tonnes. Even assuming that China’s demand for rutile TiO2 will increase by 25% in 2010, there will still be an oversupply of rutile TiO2, when all the new capacity is brought on-line. Accordingly, competition will intensify, which will impose pressure on TiO2 manufacturers trying to raise prices.

By the end of 2010, with all this new capacity, Chinese companies may start price wars to capture more market share

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Downstream Furniture coating to boost TiO2 consumption

O

Besides domestic enterprises, coating multinationals have also

China’s well-known furniture coating manufacturer

recognized the huge furniture coating market in China and

located in Huizhou City, held a ground-breaking ceremony

expanded their production capacity in China through

for its new coating production factory in Qingyuan City,

acquisition. Early in 2006, Valspar acquired the coating

Guangdong Province. The factory has a production capacity

business of China Resources, one of China’s largest coating

of 39,000t/a mainly for furniture coatings.

manufacturers, enabling Valspar to capture more market

n November 30th, 2009, Huizhou Huihuang Xiangying Coating Co., Ltd. (Huihuang Xiangying),

share in China (TABLE 7).

According to Mr. Lin, sales director of Huihuang Xiangying,

TABLE 7: Main furniture coating companies in China, 2008

to meet the increasing demand and to capture more market

Company

share, Huihuang Xiangying invested USD14.64 million in the

Output, tonne

Akzo Nobel (including ICI) Valspar (including China Resources) Nippon Paint

new facility to expand its production capacity. He indicates that Huihuang Xiangying accounts for 70% market share of

100,000 90,000 50,000

Taiho International Bauhinia Paints Zhanchenda Chemical Carpoly Paint Sopel Chemical PPG

the high-end market, with its furniture coating used in jewelry, instrument, and exhibit cases, selling under the brand name Xiangying Coating.

The promising future of the furniture coating market, together

50,000 35,000 30,000 20,000 20,000 10,000

Source: CCM International

with its current supply failing to satisfy customers’ demand, constitutes the main reason for Huihuang Xiangying’s production expansion.

Paints and coatings is the largest end use sector of TiO2, and furniture coatings play an important role in coatings. The

By September 2009, China has produced 431 million pieces of

rapid development of furniture coatings is beneficial to the

furniture, with output value of USD79.7 billion, up 7.2% year

growth TiO2 consumption. According to the average

on year, with about 22.8% of the total value for export sales.

consumption of TiO2 in coating, furniture coatings are predicted to consume 110,000 tonnes TiO2 in 2009.

Booming furniture production is expected to drive up furniture coatings output in 2009 to exceed 1,100,000 tonnes,

According to the purchasing department of Huihuang

or about 15% of the total coatings output. Chinese furniture

Xiangying, TiO2 is used as a pigment in coating production.

coatings output has increased with CAGR of 18% during 2004-

As its products are marketed at the high-end sectors that

2009 (FIGURE 3).

require TiO2 with excellent physical and chemical properties, Huihuang Xiangying will mainly use

FIGURE 3: Production situation of furniture coating in China, 2004-2009

DuPont’s TiO2.

Output, tonne

7,500,000

30.0%

6,000,000

20.0%

4,500,000 10.0%

3,000,000

0.0%

1,500,000

In the coming years, China will continue to accelerate the urbanization. By the end of 2008, China’s urbanization rate is 45.7%

Growth rate

40.0%

9,000,000

and expected to rise to 50% by 2015.

That will boost furniture production, thus driving up demand for furniture coating, especially in high-end market.

The high-end market will continue to

-10.0% grow and to be captured by imported

0 2004

2005

2006

2007

2008

2009 Est.

TiO2 with relatively good quality in the near-term.

Furniture coating Source: CCM International Grow th of furniture coating

CCM International Limited

Coating Grow th of coating

7

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TiO2 China Monthly Report

Vol.2 Issue 12.2009 rate of Indian economy, and this is expected to continue in the coming years.

Indian coating industry boosts TiO2 consumption

Currently, architectural coatings account for 75% of the coatings capacity in India. The coatings market is

K

ansai Paint Co., Ltd. (Kansai Paint) plans to invest

concentrated amongst a few companies, including Asian

USD 22 million to expand architectural coatings

Paints, KNP, Berger Paints, and Akzo Nobel, etc.

production in its Indian plant, Kansai Nerolac Paints Ltd. (KNP). After the launch of the new capacity (5,000t/

The continually developing coatings industry in India will

a) in 2010, Kansai Paint will have architectural coatings

certainly drive up TiO2 consumption. Though India has its

capacity of 20,000 t/a in India, which will help Kansai

own TiO2 plants and levies an anti-dumping duty on Chinese

Paint enhance its competitiveness in India.

anatase TiO2, India still imports a large volume of TiO2 from China. By October 2009, India had imported 10,233 tonnes

In India, coating output has increased with growth rate of 12-

TiO2 from China, or 12.9% of India’s total import volume.

15%, approximately 1.5-2 times as fast as the overall growth

According to the report, good brand

development. According to Yip’s

Yip’s Chemical achieves huge profit growth in coating

reputation, lower price of raw materials,

Chemical, it will continue to expand

capacity expansion, and huge market

its production capacity in Shanghai

in the mainland, jointly contributed to

(architectural coatings), Hebei and

its profit increase. In May 2009, Yip’s

Zhongshan (both for inks), respectively.

Y

Chemical launched its new plant in

By the end of 2012, Yip’s Chemical’s

ip's Chemical Holdings Limited

Tongxiang, Zhejiang Province, which

coatings production capacity (including

(Yip’s Chemical) gained profit

helped to strengthen its architectural

architectural coatings and inks) is

of USD18.92 million from its coating

coatings and inks businesses. Both

expected to increase by 60% or more.

business, which constitutes 49%

its architectural coatings and inks

of the company’s total profit, by

businesses achieved a 23% growth rate.

September this year, up 129% year on

Listed on Hong Kong Stock Exchange, Yip’s Chemical has three core

year, according to its 3rd quarterly

Propelled by the huge domestic

businesses including solvents, coatings,

report released on November 26th,

market potential, Yip’s Chemical is to

and lubricants, with 17 manufacturing

2009.

strengthen its competitiveness through

plants in China. Yip’s Chemical also

capacity expansion and product

holds a 5% share of Sichuan Lomon

Price Update Price update in December 2009

T

iO2 products and the major raw material titanium concentrate ore have maintained a price downtrend with fluctuation in December 2009. On the contrary, sulfuric acid price has continued its short term trend of a strong rise.

Ex-factory prices of TiO2 and sulfuric acid in December 2009, USD/t Area South west East China Central China South China

Rutile TiO2

Anatase TiO2

Sulfuric acid 98%

November 1,977-2,241

December 1,977-2,241

November December November 1,435-1,933 1,362-1,860 44-66

December 47-66

1,846-2,007

1,845-2,006

1,435-1,465

1,391-1,435

28-59

29-73

1,904-2,051 N/A

1,904-1,977 N/A

1,465-1,538 1,435-1,509

1,391-1,435 1,362-1,391

22-37 26-44

22-51 29-51

Source: CCM International

TiO2 With decline in demand, TiO2 price has fallen in December 2009.

CCM International Limited

8

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

December is the traditional slack season of the domestic TiO2 industry. Because of the bad weather in North China, many construction projects are suspended, thus leading to decreased demand for coatings. As a result, many coatings manufacturers reduce their purchases of TiO2. With increased inventory levels, TiO2 prices decreased this month, especially anatase TiO2.

With oversupply and poor demand, TiO2 price is expected to maintain a downtrend in the coming few months.

Sulfuric acid On the whole, sulfuric acid price has continued to advance in December 2009, thanks to an inventory shortage and continuous price increases of its major raw material --sulfur.

Recently, some sulfuric acid manufacturers have suspended production to overhaul equipment, such as Jiangxi Copper Corp. which suspended operation of a 600,000t/a production line on 10 Dec. 2009. Therefore, sulfuric acid supply has fallen short.

In addition, manufacturers of phosphate fertilizer, an important downstream consumer of sulfuric acid, are running at full capacity, thus further raising their purchase volume of sulfuric acid. With these factors, for the short term, sulfuric acid prices are expected to rise further in China.

Ex-factory prices of titanium concentrate ore and titanium slag, Dec. 2009, USD/t Area Sichuan Hainan Yunnan Guangxi Liaoning

Titanium concentrate ore

Titanium slag

Grade 40%-46%

November 82-117

December 82-110

Grade November 74%-78% 366-388

December 366-388

45%-54%

103-125

100-120

N/A

N/A

N/A

45%-47% 50%-52% N/A

92-103 110-117 N/A

85-100 105-114 N/A

77%-92% N/A 92%

395-513 N/A 571-601

425-557 N/A 600-615

Source: CCM International

Titanium concentrate ore With TiO2 market entering its traditional off-season this month, titanium concentrate ore prices have generally seen a downtrend but with fluctuations due to weak demand.

Owing to excessive production before the demand dip, titanium concentrate ore has seen surplus supply this month, leading to a price decline but the extent is slight as many concentrate manufactures are not selling their inventory, but instead waiting for prices to rise.

Vietnam titanium concentrate ore price in China also shows signs of decline, mainly attributed to its weak demand and price decreases of domestic titanium concentrate ore. However, due to high shipping charges, Vietnam titanium concentrate ore price never falls very much.

Titanium concentrate ore price is predicted to decrease in the following months.

Titanium slag As national electricity price is raised, manufacturing cost of titanium slag has risen by about USD18/t, thus leading to price increase of titanium slag this month.

However, high titanium slag price fails to show significant advances, which reflects the sluggish demand from its downstream industries such as titanium sponge.

Titanium slag price is forecast to remain stable with slight increase in the near future.

CCM International Limited

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

Policy & Legislation Policy interpretation related to TiO2 industry -- By Liu Changhe Editor note: in order to restrict blind expansion and gain more supports from the government, China National Coatings Industry Association (CNCIA)’s titanium dioxide branch held an annual meeting in Chengdu City on December 3rd-5th, 2009. In the meeting, CNCIA drew up Declaration of Green TiO2 industry (See issue 0909, page 17), and also discussed the drafts of Standards for Tax Rebate of TiO2 Export (Standards) and Entry Criteria for TiO2 Production (Entry Criteria). Mr. Liu Changhe, leader of CNCIA TiO2 expert group, will interpret the Standards and Entry Criteria for you.

with the national development trend of energy saving and environmental protection, and will drive the TiO2 industry toward sustainable development, as well as represent TiO2 manufacturers’ benefits, they are very likely to be adopted by the government in the near future.

Guided by the Standards and Entry Criteria, as well as the Declaration of Green TiO2 industry, China’s TiO2 industry is expected to gain more support from the government and will develop more healthily in the coming years.

W

ith the purpose of promoting TiO2 industry development, the Chinese government used to

implement such preferential policies as an export tax rebate. However, in the past two years, the Chinese TiO2 industry has expanded rapidly without adequate concerns for environmental protection, which thus impelled the government to cancel the tax rebate in 2007. This has caused a great impact on TiO2 industry development.

Liu Changhe

To gain more support from the government, the CNCIA

Chief and senior expert in domestic titanium dioxide production by chloride process, senior adviser and former vice president of Jinzhou Ferroalloy Co., Ltd. (China’s unique TiO2 manufacturer adopting chloride process) is appointed as the leader of the expert group of the TiO2 branch of China National Coatings Industry

titanium dioxide branch drafted the Standards and Entry Criteria, both of which are intended to promote sustainable industry development over the long term.

As the Standards suggest, the government should reinstitute the tax rebate for TiO2 exports. However, only TiO2 manufacturers that pass ISO9001, ISO14000 and obtain clean production certifications from local governments will be able to enjoy the tax rebate. This draft also emphasizes that no

Raised transport cost curbs TiO2 price downturn

matter how large the production scale is, TiO2 manufacturers should have their own treatment facilities for three kinds of wastes. Otherwise, they won’t be able to gain the export tax

A

ccording to National Development and Reform

rebate.

Commission, rail transport cost is raised from USD

To arouse deeper concern from TiO2 manufacturers on

0.014/t.Km to USD 0.015/t.Km effective December 13th,

environmental protection, TiO2 industry also released the

2009.

Declaration of Green TiO2 industry to help change the public’s The adjustment of rail transport cost will go against inland

bad impression of the TiO2 industry.

TiO2 manufacturers’ product distribution, especially in For the Entry Criteria, it aims at restricting excessive TiO2

Panzhihua City. Generally, railway is a major means of

capacity expansion by raising the entry threshold for new

transport for delivering TiO2 produced in Panzhihua City, a

entrants, requiring that the minimum unit capacity should

region whose TiO2 capacity share is over 20% of the national

be at least 50,000t/a for sulfate process and 60,000t/a for

total. The increased cost will also impact Panzhihua’s

chloride process. In addition, the Entry Criteria suggests that

titanium ore transportation costs

the government should promote TiO2 industrial integration to The increased transportation costs help to slow down TiO2

eliminate inefficient capacity as the coal-mining industry does.

price downturn that has begun since TiO2 demand started to enter the slack season in November.

Since the drafts of the Standards and Entry Criteria are in line

CCM International Limited

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TiO2 China Monthly Report

Vol.2 Issue 12.2009

China continues tariff-free titanium slag import

O

n December 8th, 2009, the Sate Council approved the scheme for eliminating the tariff on imported titanium slag (HS Code: 38249099) in 2010.

According to the scheme, China will continue with a zero tariff on imported titanium slag, which has been implemented since 2007. In addition, the government will subsidize imports of resource-based products and introduction of key technologies by paying borrowing costs for loans. The exact details of the policy have not been revealed yet. The resource-based products cover titanium ore, copper ore, lead ore, etc. To protect domestic titanium resources, it will levy tariffs of 10% on exported titanium ore (HS Code: 26140000).

Enjoying the preferential policy, China’s imports of titanium ore resource have experienced rapid increases. By October 2009, China has imported 1,154,665 tonnes titanium concentrate ore (HS Code: 26140000) and over 150,000 tonnes titanium slag (HS Code: 38249099).

Special Report

C

Review of Chinese TiO2 industry 2009 ----- policy, raw material, production

hinese TiO2 industry has

package.. Driven by these supportive

Dingxing, Panzhihua Taihai, etc,

experienced ups and downs in

policies, China has become the world’s

suspended their production due to their

the past two years. After the decline

largest automobile manufacturer and

inadequate environmental protection

caused by the global financial crisis

the largest automobile market by

measures. In order to improve

at the end of 2008, the industry

October 2009, which will stimulate

environmental protection awareness

has seen an obvious rebound since

TiO2 consumption in coatings, plastics

and sense of social responsibility, China

Q2 2009. Both production and

and other end-use sectors.

National Coatings Industry Association

consumption of TiO2 are booming in

(CNCIA) Titanium Dioxide Branch

H2 2009, thanks to the government’s

There are also preferential policies

released a Declaration of Green TiO2

supportive policies. The current

closely related to TiO2 industry. For

Industry Guidelines in August 2009.

thriving TiO2 industry has driven

instance, Chinese government has

up demand for titanium ore that is

abolished import tariffs on titanium

Next year, the government is expected

gradually depleting existing reserves

concentrate ore (HS Code: 26140000)

to raise entry threshold for new entrants

and feedstock production capabilities.

and titanium slag (HS Code: 38249099),

in TiO2 industry and to resume tax

The anticipated increasing tightness

and also lowered the tariffs on sulfuric

rebates that were discontinued in 2007,

of feedstock supplies, has attracted

acid (HS Code: 28070000) in 2009.

for TiO2 manufacturers who implement

widespread attention, and increasing

Meanwhile, to protect domestic TiO2

adequate environmental protection

investment in new ore resources from

producers, it subsidizes titanium ore

measures.

investors and mining firms.

and feedstock imports payment of interest expense on loans for working

Policy

September 2009.

Compared with 2008, Chinese TiO2

To cope with the 2008-2009 financial crisis, the Chinese

Raw material

capital or approved projects since industry enjoyed a relatively stable raw Environmentally related policy

material market in 2009.

is another driver for domestic government promulgated a series of

TiO2 development. In 2009, the

For sulfuric acid, owing to the rapid

supportive policies, including stimulus

government heightened environmental

capacity expansion and slow demand

plans for ten industries and USD586

requirements for TiO2 production.

growth, Chinese sulfuric acid capacity

billion for an economic stimulation

Some manufacturers, such as Panzhihua

has experienced redundant construction

CCM International Limited

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TiO2 China Monthly Report and oversupply, which it is expected to

Vol.2 Issue 12.2009 in acquiring mining rights abroad.

maintain for many years to come. But

its post treatment. Capacity expansion and production shifts can actually help

with shrinking capacity share of sulfur-

Despite the rapid development of

the manufacturers to improve their

burning process, sulfuric acid price will

domestic titanium ore resources, China

profitability in the short term but also

play a less important role in influencing

still relies heavily on imported titanium

has greatly intensified the competition

sulfur price, which is mainly influenced

ore. By October 2009, it has imported

amongst Chinese producers.

by crude oil price. Besides, many TiO2

a total of 1,154,665 tonnes titanium ore

manufacturers have built their own

concentrate, up 8.2% over previous year.

sulfuric acid production lines to match

Some manufacturers, such as Panyu Titanium, are working hard on

with their TiO2 production. Benefiting

In the foreseeable future, oversupply of

competitiveness enhancement through

from stable sulfuric acid prices, TiO2

sulfuric acid and heavy dependence on

product quality improvement, instead

manufacturers improved profitability in

imported titanium ore are expected to

of capacity expansion. This has helped

2009.

remain unchanged.

them capture more high-end markets.

For titanium ore, its demand keeps

Production

In 2009, China has set a target that TiO2

increasing with slight price fluctuation

capacity utilizing the chloride process

in 2009. However, with gradually

With rebounding demand and

will account for 15% of the national total

exhausting resources and soaring

improved environmental protection,

by 2015, which seems too optimistic.

demand, titanium ores and feedstocks

TiO2 operating rates have seen rapid

Nevertheless, Jinzhou Titanium,

have drawn wide attention from many

increases this year, reaching nearly 90%

China’s first manufacturer adopting

TiO2 manufacturers and mining

in Q4 2009, as the soaring titanium ore

the chloride process, has doubled its

companies that have plans to invest

imports indicates.

capacity to 30,000t/a in 2009, and its

more in the ore sector. Some enterprises

second chloride process line is under

including JNMC and Pangang Group

Rutile TiO2 capacity expansion is on-

construction and proceeding smoothly.

even have attempted to acquire titanium

going in 2009. Besides rutile TiO2

In the coming years, capacity expansion

ore exploitation rights abroad. But

manufacturers expanding capacity,

will continue in China and TiO2

JNMC’s failure indicates that domestic

many anatase TiO2 manufacturers are

production will be more environmentally

enterprises may still have long way to go

shifting to rutile TiO2 production or

friendly.

Profitability to shrink in Q1 2010

W

ith TiO2 demand entering a slack season, TiO2 price

in Q3 2009, up 91.5% over Q2 2009 and experienced increase

has dropped gradually since November 2009, which

of its unit profitability by USD 0.007.

will impair TiO2 manufacturers’ profitability in the short term, despite the huge profit manufacturers have gained in

Besides huge domestic profit margins, export value of TiO2

past few months.

manufacturers’ also rose.

Driven by soaring domestic demand and price hikes initiated

Export price increased by 4.9% and 2.3% for rutile and anatase

by multinationals, domestic TiO2 price (FIGURE 4) went up

TiO2 respectively during Jul. ~ Oct. 2009. However, TiO2

gradually from Jun. ~ Oct. 2009, during which domestic ex-

sales volume does not seem to be affected by the price surge.

factory prices increased by 8.9% for rutile TiO2 and 5.7%

On the contrary, some manufacturers’ TiO2 export volume

for anatase TiO2. Though there may be lots of room for

has increased through entry into new markets. Take Henan

negotiation, prices in actual deals have indeed risen. For

Billions for example, its average export price increased from

instance, the export price (FIGURE 4) increased by 4.9% and

USD1,621/t in June to USD1,758/t in October, but its monthly

2.3% respectively for rutile and anatase TiO2.

export volume also rose from 1,674 tonnes to 2,067 tonnes over the same time period. This achievement is attributed to

TiO2 manufacturers have gained huge profits in the domestic

Henan Billions’ strengthened efforts in its new markets in

market in the past few months. Take Anhui Annada for

Kazakhstan, Columbia, etc, in H2 2009.

example, benefiting from booming demand and soaring prices, it gained USD16.84 million sales value from its TiO2 business CCM International Limited

Increases in export price and volume jointly contributed to

12

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TiO2 China Monthly Report FIGURE 4: TiO2 price, Jun. ~ Dec. 2009

Henan Billions’ monthly export value

2,100

increased from USD2.71 million in

1,950

34.3%.

1,800 1,650

Accordingly, even taking the increased

Exfactory rutile

production cost into consideration, the

Exfactory anatase

No

be r De ce m

ve m

be r

er ct ob

e Ju n

about USD 40/t.

O

1,200

pushed up production cost of TiO2 by

be r

June and October (FIGURE 5), it only

em

1,350

Se pt

25.0% and 4.0% respectively during

gu st

1,500

and titanium ore also increased by

Au

Besides, though prices of sulfuric acid

USD/t

June to USD3.64 million in October, up

Ju ly

a soaring export value. For instance,

Vol.2 Issue 12.2009

Export rutile

Export anatase

profitability of TiO2 business increased Note: ex-factory price is usually higher than price in actual deals as there may be certain room by about USD50/t during June-

for negotiation.

Source: CCM International

October.

FIGURE 5: Prices of titanium ore and sulfuric acid, Jun. ~ Dec. 2009

entering a slack season because of

120

the coming Spring Festival, TiO2

105

November 2009 and are likely to

90

production cost will jointly shrink the

ec em D

N

ov em

be r

be r

er ct ob

Sulfuric acid

O

Hence, price downturn and rising

Se pt

future.

A

production costs of TiO2 in the near

30

be r

raw material prices will push up

45

em

cost, as well as the gradual rise of

60

ug us t

electricity price and transportation

75

e

In addition, possible increases in

Ju n

keep declining throughout Q1 2010.

USD/t

prices have dropped slightly since

Ju ly

Nevertheless, with TiO2 demand

Titanium concentrate ore

Source: CCM International

profitability of TiO2 manufacturers in Q1 2010.

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CCM International Limited 17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong Road Guangzhou, 510070, P.R.China Tel: +86-20-37616606 Fax: +86-20-37616968 E-mail: econtact@cnchemicals.com Website: www.cnchemicals.com