Looking back at the growth of the
Chinese talc industry, Figure 1 shows the quantitative change
of talc exports from 1970 to 2009 (see panel on Chinese
This can be divided into three
stages: the growth period before 1995; the declining period
from 1996 to 1999; and the stable period after 2000.
It was a speedy growth period from
the early 1970s to 1995, the annual average growth was 5.95%,
and the growth rate reached 14.5% between 1990 and 1995.
Pingdu Talc Co. Ltds mine near Pingdu,
Shandong has a 150,000 tpa crude talc
The export volume for 1970 was only 104,900 tonnes, and it
reached 1.59m. tonnes in 1995, which was the highest record in
history, the export volume occupied 67% of the worlds
trading volume in the same period. Since the 1980s, China has
been the largest talc exporter in the world.
China started to implement
administrative control over talc export quotas in 1996. The
export volume was swiftly reduced from 1.59m. tonnes in 1995 to
1.03m. tonnes in 1996.
The first issue was the outcome of
controlling the export quota volume, followed by the reaction
towards market changes.
Before the mid-1990s, the majority
of Chinese talc was used for paper filler. However, this part
of the business started to shrink rapidly starting in the
1990s. Even without the limitation of export volumes in 1996,
talc exports began to dwindle quickly after 1996.
After the 1990s, talc demand grew
from the plastic market boom, this was the most important
application and growth point for Chinese talc exports after
1995. At present, 50% of the export market is destined for
plastics demand, followed by paint and cosmetic products.
If the development drive of the Chinese talc
industry in the past 30 years was from the
export market, then domestic demand will
now exceed the drive for exports in the future,
Dr Jia Xiu Zhuang, Haichen Minchem Co. Ltd.
Export license system
The paid use of non-exempt export licenses and the tendering
method is an important feature of Chinas talc export
sector. Qualification for participation in the tender and the
tendering process follow the rules and regulation as stipulated
in Invitation to Tenders for Export Quotas
Procedures and Invitation to Tenders for Industrial
Product Export Quotas Implementing Rules.
Products that have been included
under talc export quota control are:
Unmilled and unpowdered talc (HS: 25261020)
Talc powder (HS: 25262020.01)
Other milled or powdered natural talc (HS: 25262020.90)
Talcum mixture with 50% of talc by weight (HS: 38249091)
In recent years, the total export
quota volume has been about 610,000 tonnes. Owing to the impact
of the financial crisis in 2009, this volume has decreased to
400,000 tonnes. The volume resumed to 610,000 tonnes in 2010,
in which 366,000 tonnes was for the first half of the year, and
244,000 tonnes for the second half of the year.
A total of 40 companies acquired
tender qualification and received relevant export quotas.
The main producing regions for Chinese talc exports are
Liaoning, Shandong, and Guangxi provinces (Figures
The overall trend is that the
export proportion of Liaoning has shown a gradual reduction
over the years, while that for Guangxi has shown an annual
up-scale trend. Shandong has shown rather minor fluctuations.
There are signs of a slow down in these trends in recent
Figure 3 is the export proportion
for talc type in 2009, ie. raw materials and powder. Liaoning
has the largest export volume for powder, which is about 55%,
while Guangxi accounts for 36%.
Guangxi has the largest raw
material volume, which accounts for 54.3%, while Liaoning
accounts for 30%.
Overall, Liaoning has reduced its
volume from 61% in 1994 to 44.6% in 2009, but Guangxis
volume has increased from 21% in 1996 to 45.6% in 2009. The
export volumes of Liaoning and Guangxi are about the same at
present. Liaoning has the export advantage in powder while
Guangxis advantage is in raw material.
Hand sorting talc at Aihai Talc Co. Ltds mine
near Haicheng, Liaoning.
China also exports about 30,000 tpa of talcum mixture and
chlorite (talc content <50%). The source of this material is
mainly Liaoning and Shandong.
Talcum mixture normally refers to
the gangue or disposable remainder, after the pure talc has
been extracted. It is mainly exported to Japan, South Korea,
and South East Asia.
According to export rules and
regulations in 2009, talc for export that has >50% content
of mixture shall be treated as talc, which is subject to an
Domestic market outlook
The international market has always been the major driver of
Chinese talc industrial development. However, changes in the
domestic market have captured attention in recent years.
In the past, the domestic market
used to focus mainly on the low grade talc products, such as
paper filler; this market has been rapidly declining since
Contrary to this, middle to high
grade talc used in plastic, paint, and cosmetics has seen
tremendous growth in recent years.
What is worth attention is that the
total annual talc imports of China have already exceeded 20,000
tonnes (Figure 5). Even during the global financial
crisis of 2009, the talc import volume and price showed no
obvious reduction (Table 1).
Table 1 shows a comparison of
import and export prices between 2000 and 2009. The import
prices were $463-697/tonne, and the export prices were
$110-209/tonne during the same period. The import price was
three to four times the export price.
In the coming years, domestic
demand for middle to high grade talc will still maintain
comparatively fast growth. If the development drive of the
Chinese talc industry in the past 30 years was from the export
market, then domestic demand will exceed the drive for exports
in the future.
In 2009, Chinese production of
paper, paint, automobiles, and home appliances reached number
one in the world. These markets are the key application areas
of talc, and each have huge market potential. The Yangtse River
Delta and Pearl River Delta are the main talc consuming
The future key growth market is in
the plastics field, particularly polypropylene, which is used
in the automobile, home appliance, and packaging industries,
their annual growth rate will be maintained at around
Pingdu Talc Co. Ltd in Shandong, has a plant capacity of about
250,000 tpa, although output
is about 100,000 tpa finished product, from 150,000 tpa crude
talc mined (see p.32 for picture).
The plant utilises 12 Raymond mills and one Jetmill to produce
a range of grades. Dolomite
is produced as a by-product which is used as roadstone.
Figure 6 shows the export prices of talc raw material and
powder from 1994. Apart from the impact from 2009s
financial crisis, prices have been rising.
Between 2000 and 2008, talc raw
material prices rose by 143%, and the annual increment was 18%;
powder prices rose 89%, an annual increment of 11%. These
increases in talc prices were far higher than other producing
countries during the same period of time.
There are five main reasons why
prices of Chinese talc had remained excessively low in the
Excessive and disorderly excavation; supply was
seriously larger than demand
Low labour cost
Low resource tax and resource compensation
Little or no input on environmental protection and
Lack of deep understanding of the international
The global market demand for white
talc is still growing. While China did not improve its ability
to supplying talc grades, in fact such ability has even
reduced, Chinese talc is still the significant talc source for
the world market, particularly the Asian market.
For example, in 2008, 94.7% of
Japans talc imports were from China; 95% of South
Koreas talc imports were from China.
Talc from Europe has not been able
to satisfy European demand in recent years, and it is believed
that with the continued balance of supply and demand, the main
talc source will be mainly China.
Chinese talc has been listed as a
high energy consuming, heavy pollution resource
product in recent years. As such, there has taken place major
changes in industrial policies, such as the export tax
incentive being reduced from 2003, and eventually abolished in
A 10% custom tax was imposed in
2009, and a volume reduction policy was implemented
against export volumes, and this export quota was gradually cut
A cultivation resumption charge was
implemented in 2009, and the reform of resource tax is already
in the pipeline. There will be stricter requirements on
The price hike of talc from China
is not only the outcome of the supply and demand relationship
of the market, but also the outcome of continuously increasing
talc production costs and export costs in China.
There is still a great likelihood
of further rises in export prices, especially in the price of
high grade white raw talc and talc powder. Resource tax, labour
cost and the RMB exchange rate are the important factors
driving up the export price.
The decline of production and exports of Chinese talc, price
hikes, tightened supply, and as the largest talc producing,
exporting, and consuming country, the sustainability of the
Chinese talc industry have all received serious local and
overseas attentions in recent years.
The so-called high talc production
in China in the past was built on a plundering attitude in
excavation with little regard for its outcome.
Although this was practiced mainly
in small and medium mines, its negative impact on the market
should not be underestimated. It has been the root cause of
Chinese output exceeding demand, hence its price declined.
The price of the worlds top
grade pink talc produced by China dropped from the level of 15
years ago until the recent $83/tonne mark. Since 2000, the
situation has undergone change.
After 20 years of mining, the
majority of the small and medium mines became exhausted, or
nearly exhausted, and production of Chinese talc started to
In 2005, the Chinese government
carried out a re-organisation of mining and resource companies,
and illegal excavation was minimised.
Among the three main white talc
producing regions of China, all mines in Liaoning have been
privatised. Shareholding structural reform for mining companies
has also been completed in Shandong, and mining in Guangxi is
Going forward, it is hoped that the
talc industry of China will develop towards a healthy, steady,
and sustainable direction.
Industrial policy and the future
Despite being listed as a high energy consumption, heavy
pollution resource product, Chinese talc actually has low
emissions in carbon and other pollutants. Carbon emissions of
powder processing are between 150-800kg/tonne.
There are also no issues with
sewage, nitrides, and sulphides, while dust problems can be
effectively solved. Talc can be used in pottery and ceramics to
lower firing temperatures; talc can be used in polypropylene
packing, economising the consumption of resin.
As reserves get exploited, the
quality of raw material may decline, and excavation costs will
rise. Therefore, the shortage of resources is foreseeable could
be a problem that deters further development of the talc
At present, talc raw material
prices in Liaoning are $50-100/tonne higher than other
producing regions in China, and $50-100/tonne higher than
neighbouring countries. Therefore, the historic relative price
advantage of Chinese talc raw material is weakening.
Further development of the Chinese
talc industry can no longer rely on low cost resources, it
should rely on accumulated experience in processing and
technology, develop fine processed products with high added
value, and improve the effective usage of resources.
What is worth highlighting is that
although the size of the Chinese talc industry has shrunk by
50% compared to 15 years ago, production has grown by 500%.
The price of high grade products
has increased from the $200-300/tonne five years ago, to
$500-600/tonne, or even in excess of $1,000/tonne.
Chinese micronised powder output in
2009 reached about 130,000 tonnes. Such higher grades are
increasing in volume and a range of new talc grades have been
established in a variety of sizes and surface modification.
While this is good news, the
critical shortage of raw material may possibly limit the
development of the talc processing industry to develop such
There is a necessity to consider
the following three adjustments of the industry in order to
achieve sustainable development of the Chinese talc
Control of raw material export volume, encourage export
of finished product
Encourage exploration and consumption of medium-low grade
Allow import of material for processing and make use of
For many years, there has been no classification of talc
exports by raw material, primary product, or fine processed
high added value products they are all under the same
In 2008, the central government
imposed an increment of 5-10% of export tax on all talc
products, including the high added value grades.
In Figure 7 (Exports
panel) can be seen the export share between talc raw
material and powder, there has been no obvious reduction in
export of raw material for more than 30 years; it always
occupies more than 40% of the total export volume, and even 65%
The adverse impact caused by a lack
of raw material on processing talc is already visible, and
there has been no obvious increase in the export share of talc
powder over the years.
However, on the other hand, raw
material is still being exported in large volumes. Therefore
the present policy must be questioned.
The talc industry suggests a
different quota control to be imposed separately for the raw
material export and the powder exports, and different tax
measures should also be implemented, while exports of finished
products are to be encouraged.
Exploration & use of middle-low grade
Medium-low grade raw material is a talcum mixture,
the disposable mixture after the mill run, containing 30-70%
talc. This portion of the tailings cannot be extracted
effectively, since it has no talc characteristic and hence
could not be used as talc per se but only as an
ordinary low cost filler, such as in paper, low grade paint,
and agricultural products.
Be it the product itself or the
market application, talc and talc mixture are two
entirely different products.
The domestic market is unable to
consume all talc mixture produced, and exports have always been
its most important market.
Since the Chinese Customs
issuance of its Talcum Mixture Export Management
Announcement in April 2008, mixtures with a content of
>50% talc are all included under the scope of the talc
Although talcum mixture is included
under the scope of tender invitation and quota management
control, the number of quotas have not been increased
correspondingly. This has resulted in tight availability of
export quota licences, and rising prices.
At the same time, as the cost of
the quota license is relatively high and the quota is limited,
it is actually blocking the export channel for 50-70% talcum
mixture, and the share of this portion of talcum mixture
occupies more than 50% of the total volume.
The talc industry should consider
redefining the talcum mixture level included under the export
quota management control, and it is suggested that the talcum
mixture level is raised from the existing 50% to 70% talc
There is also another issue with
the governments definition of another impure talc grade.
The 2008 No.100 Announcement by the Ministry of Commerce and
General Administration of Customs, declares that talcum mixture
with >10% of magnesite or chlorite should be treated as
magnesite, and exportation of such is prohibited.
This policy now requires
clarification based on a fair and scientific approach.
The majority of mined deposits in
Liaoning contain magnesite. Even the medium-low grade crude
magnesite mined consists of >10% magnesite, but these are
considered impure and not sold or used as
Therefore, the actual effect of
this regulation for talc, is that it only allows the export of
high grade talc while low grade mixtures (containing >10%
magnesite) have to be used in China.
Importing talc looking
Regarding the long term viewpoint, rich raw materials and
upgraded processing ability are the two foundations for further
development of Chinas talc industry.
However, the anticipated shortage
of talc raw material will limit investments and development of
the processing industry.
In recent years, the high grade
talc raw material of neighbouring countries has demonstrated an
obvious price advantage over Chinese talc; this represents a
challenge as well as an opportunity.
For the next step, China not only
needs to consider how to effectively make use of its own
resources, but should also consider making use of the global
At present, China imposes a 5-10%
export tax on talc, and at the same time, imposes a 3% customs
tax on talc raw material import, and prohibits importing
material for processing.
Chinese talc has existed in the
international market for 70 years, but the incentive drive is
different today. If the raw material sold in all those years
was for the sake of survival, then the action required today is
to take part in international market competition and to seek
room for development. China needs to consider how to make use
of global resources.
Without sufficient resource
assurance, any future industrial development can only be
considered empty talk. Relevant policies and measures on
Chinese talc should encourage exploration and exploitation of
resources within China, but also cast a wider view globally to
allow importation of raw material talc from sources
Contributor: Dr Jia Xiu Zhuang, director,
Haichen MinChem Co. Ltd China. This article was adapted from a
paper presented by Dr Jia, The solution to Chinas
new talc challenge, at the 2nd China Liaoning
Talc Industry Exposition, 27-29 September 2010, Shenyang
organised by the Liaoning Magnesite Resources Protection
Chinese talc reserves & production
Up to 2008, a total of 120 talc mines were registered
in China, with 0.26bn. tonnes of resource reserves, 0.138bn. of
resources, 0.121bn. tonnes of basic reserves, 75.15m. tonnes of
measured reserves. The chart shows the distribution of basic
talc reserves in China by province.
The advantages of Chinas talc
resources include not only its significant reserve volume, but
also the superior quality of its white talc. Without export
from China, the global markets demand for white talc is
unlikely to be satisfied.
Talc is a relatively low value
product, its consumption is normally focused on a regional
market. However, Chinese white talc is an exception, even
regions such as Europe and North America, hosting relatively
rich resources themselves, import about 250,000 tpa of medium
to high grade white talc from China.
The status and market applications
of Chinese talc in the Asian market and the global market are
different. In the Asian market, China is the most important
talc supplier and this includes all medium and high grade
Regarding the global market, the
output of Chinese talc represents about 35% of the worlds
production. European and US talc resources are of relatively
high purity, and their total output is larger than
Chinas. Consequently, their respective markets only
require Chinas high quality white talc.
Chinese talc reserves are expected
to fully satisfy the basic demand of both domestic and overseas
markets, and for the foreseeable future, while exports remain
its most important market.
The accompanying table shows an
estimation of production for Chinese talc. At the moment,
annual production is 2m. tonnes.
It is estimated that the talc
industry will undergo a period of consolidation in the next
five years, where production will be maintained at around 2m.
tpa, the export volume will be around 600,000 tonnes.
In ten years, production of high
grade raw material will further decline, and the export volume
will reduce correspondingly. However, the production and export
micronised talc powder will both be increased.
The lifetime of the Chinese talc industry is conservatively
estimated at >30 years, and optimistically, at > 60
Distribution of talc reserves in China in 2008
Chinese talc production
Chinese talc trade
Figure 1. Chinese talc export volumes 1970-2009
Figure 2. Talc exports of Liaoning, Shandong, and
Guangxi 1996-2009 (%)
Figure 3. Talc exports by grade of Liaoning, Shandong
and Guangxi 2009 (%)
Figure 4. Talc exports of Liaoning, Shandong and
Guangxi 2009 (%)
Figure 5. Chinese talc imports 2000-2009 (tonnes)
Figure 6. Chinese talc export prices 1994-2009
Figure 7. Chinese talc exports by grade 1994-2009
Table 1. Comparison of import/export prices of Chinese
talc at ports (US$/tonne)