Wednesday, March 12, 2014

China's titanium feedstock supply in 2013 flat from 2012

It is widely expected that China's economic growth will slow down. The former investment-led growth model, which depended on the real estate industry, is no longer in effect. This is causing a decrease in the demand for architecture coatings. Such a change in the domestic environment has determined the future development of the TiO2 industry. China's TiO2 output increased from 308,000tonnes to 1,803,000 tonnes in 2011 at a CAGR of 19.33%. Assuming that 2001-2011 is classified as the growth stage of China's TiO2 industry, the industry has entered a stabilisation stage since the beginning of 2012, according to Titanium China Monthly Report issued by CCM in Feburary.

It can be judged from the actions taken by the TiO2 multinationals that China's TiO2 industry has entered a stabilisation stage. As the world's largest TiO2 consuming and producing country, China's developments are closely watched by the TiO2 multinationals During the stabilisation stage, an industry's growth will slow down or even stop.

In Sept. 2013, Huntsman Corporation acquired Rockwood Holdings, Inc's titanium dioxide business, which has caused a further rise in the concentration of the overseas titanium dioxide industry. In addition, DuPont, the world's largest TiO2 producer with a large market share in China, has decided to spin off its titanium dioxide segment, because the company predicted that such a highly cyclical segment will develop at a low speed in the future. DuPont will pay attention to high-speed investment opportunities in order to maximise opportunities for its shareholders.

Various TiO2 producers in China are gradually increasing the differentiation of its products and reducing the homogeneity of their product mix. The market has been subdivided and is maturing. For example, Sichuan Lomon Titanium Co., Ltd.'s TiO2, which is widely believed to have good performance in every aspect, has a high price; Shandong Doguide Group Co., Ltd.'s TiO2 has good stability performance; Yunnan Dahutong Investment Group Company's TiO2 has high covering power; and BlueStar New Chemical Materials Co., Ltd. Guangxi Branch's TiO2 has high whiteness.

The product mix has changed from being dominated by anatase TiO2 of low added value to rutile TiO2 of high added value. The TiO2 (general type) has been subdivided into coating grade TiO2, paper grade TiO2, and plastic grade TiO2, and others. The overcapacity, and the slowdown in the exports of TiO2 implies that China's TiO2 has been gradually entering a stabilization stage.

TiO2 exports substantially increase at the growth stage but decline when entering the stabilisation stage. Correspondingly, TiO2 exports fluctuated at a high level in 2012-2013, following strong growth in 2009-2011. Concerning the production capacity and output, survey data from CCM shows that the production capacity and output of China's TiO2 industry were 2.98 million t/a and 1.90million tonnes in 2013, and the operating rate was 63.76%.

The analysis method for product life cycle is only used to statistically analyse the current stage of a product. However, the development of an industry is dynamic and ever-changing, and technological breakthroughs can change the direction of the industry. For example, a recent study found that the surface of TiO2 can be photocatalysed to produce hydrogen, and if the technology is a breakthrough and related products reach mass production, the future development of the TiO2 industry will be boosted, and will re-enter the growth stage from the current stabilisation stage. Therefore, this article only provides an analytical point of view.

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China's titanium feedstock supply in 2013 flat from 2012
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Henan Billions forecasts 87.22% decrease in net profit for 2013
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Changes in pattern of China's titanium feedstock imports
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Titanium Dioxide China Monthly Report, issued by CCM on 25th, is mainly comprised of five columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business opportunities through the latest and helpful information provided in the report.

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