The future of China’s TiO2 industry: Consolidation and clean up

By Albert Li
Published: Thursday, 17 December 2015

Chinese TiO2 consolidation to continue; chloride route breakthroughs needed and overcapacity must be addressed.

Industry participants at the Deyang Phosphor-Titanium Chemical Green Development Forum held at the start of December in China have predicted that consolidation in China’s titanium dioxide (TiO2) industry is set to continue as the country adapts to an international market. 

Speakers also forecast that, in the long term, China will use both the sulphuric acid (sulphate) and chloride-routes for TiO2 production, though the industry will have stricter environmental policies to adhere to.

Yijiang Fu, vice secretary of the TiO2 branch at the China Coating Industry Association, suggested that China should work harder to make breakthroughs in chloride-route production, which is considered to be a more efficient process and produces higher quality TiO2

Currently, China lacks ilmenite resources and must import expensive feedstock material, while there have been no major breakthroughs in the chloride technique in the country.

Fu additionally suggested that, at the same time, producers should perfect the sulphate-route production technique to satisfy stricter environmental requirements.

A major barrier to the adoption of chloride-route TiO2 production in China is the high cost of developing the technology; importing it or developing it through R&D is likely to cost billions of Chinese renminbi (Rmb).

Speaking at the conference, Xingrong Xu, vice chief engineer at Donghua Project Technology Co., noted that more stringent environmental regulations in the form of the Discharge Standard for Pollutants in Oil and Chemical Industry will come into effect on
1 July 2017, which will result
in restrictions on sulphate-route TiO2 producers, giving chloride-route production a chance to develop.

According to Xiaokui Zhou, vice president of Lomon Group, sulphate-route TiO2 is likely to remain the main product in the industry. 

The key to sustainable manufacturing should be clean production and a circular economy, with extensive use of sulphate-route TiO2 waste and byproducts, Xiaokui said. He added that the company relies on the rich ilmenite resources in the Panzhihua area and has plans to speed up R&D on a circular sulphuric TiO2 technique. 

Consolidation won’t cut capacity 

Speakers at the conference also said that consolidation trends would continue in China, with producers becoming larger but fewer in number. With pressure from the market and environmental regulations, speakers said it was inevitable that smaller companies with 100,000 tpa and 50,000 tpa capacities would be gradually eliminated. 

However, experts warned that unless the serious overcapacity problem is addressed, the whole industry will remain in its current depressed state and that TiO2 prices may decline further to extreme lows, with no hope of a price recovery this year. 

Despite the overcapacity issue, new TiO2 capacity is slated to come online by the end of this year. 

Jiangsu Taibai Chemical Co., a subsidiary of Jilin Gpro Titanium Co., finished its 80,000 tpa TiO2 project on 30 November and is now ready to begin production, two years after the venture was started. 

The project, located in the industrial park in Xuzhou city, consisted of Rmb 870m ($135m*)-worth of investment as part of the its plan to move industrial companies out of the city and into the park. Production will also consist of an additional 300,000 tpa sulphuric acid and 250,000 tpa ferrous sulphate, addressing the the demand gap for high end rutile TiO2.

Additionally, the newly merged entity of China Henan Billions Chemicals Co. and Sichuan Lomon Titanium Industry Co., has announced plans to expand its output with 100,000 tpa additional chloride-route TiO2 capacity over the coming years. 

According to figures from the China National Chemical Industry Productivity Centre, China’s production capacity for TiO2 is set to reach 3.2m tonnes this year,
up from 3.06m tonnes in 2014. However, of the 3.06m installed capacity China registered last year, actual output was just 2.44m tonnes, up 13% year-on-year
(y-o-y).

Today, there are 46 large scale manufacturers in China, running a total of 56 plants. Four of these are central government state-owned enterprises (SOEs), while three are local government SOEs and four are listed companies, with the remainder under private ownership.

Domestic feedstock developments

While China lacks the high quality feedstock needed for chloride-route TiO2 production, which hinders developments owing to the need to import feedstock, Angang Group Research Institute has announced it has made a breakthrough in relying on domestic feedstock.

Angang said it used ilmenite from Panzhihua in Sichuan province as a source material to develop a titanium slag upgrade technique to produce high quality titanium-rich material, with a TiO2 content of 88%-95%, SiO2 less than 2.5%, CaO less than 0.15% and MgO less than 1%, to satisfy chloride route requirements.

*Conversion made December 2015