Titanium dioxide China News Sample - Published by CCM International Ltd

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TiO2 China Monthly Report

Vol.2 Issue 12. 2009

TiO2 China Monthly Report Vol.2 Issue 12.2009

www.cnchemicals.com CCM International Limited2

Supply & Demand 1China’s TiO2 trade in October 1ISK’s TiO2 distribution in China 2

Upstream 3Titanium resource draws wide attention 3TiO2 industry is expected to enjoys ample sulfuric acid supply in the long-term 4Huge new mining resource to be proved 4Titanium metal industry sets target for 12th Five Year 5Ching-Hing acquires titanium mining right 5

Company Dynamic 5Jinan Yuxing to start rutile TiO2 pilot production 5Pangang Titanium’s rutile TiO2 output hits new record 5Rutile TiO2 competition to be intensified 6

Downstream 7Furniture coating to boost TiO2 consumption 7Indian coating industry boosts TiO2 consumption 8Yip’s Chemical achieves huge profit growth in coating 8

Price Update 8Price update in December 2009 8

Policy & Legislation 10Policy interpretation related to TiO2 industry 10-- By Liu Changhe 10Raised transport cost curbs TiO2 price downturn 10China continues tariff-free titanium slag import 11

Special Report 11Review of Chinese TiO2 industry 2009 11----- policy, raw material, production 11Profitability to shrink in Q1 2010 12

Latest reports related to TiO2 from CCM

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

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

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

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

- Production and Market of Masterbatch in ChinaMade in July 2008

- The Future of Carbon Black in ChinaThe 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

CCM coming newsletter related to TiO2- Inks China News

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

http://www.cnchemicals.com/reports/0013T001/0013T001_3_commodity_titanium_dioxide.shtml

http://www.cnchemicals.com/reports/0013P001/0013P001_2_pigments.shtml

http://www.cnchemicals.com/reports/0013T001/0013T001_2_commodity_titanium_dioxide.shtml

http://www.cnchemicals.com/reports/0013T002/0013T002_2_specialty_titanium_dioxide.shtml

http://www.cnchemicals.com/reports/0013M001/0013M001_1_masterbatch.shtml

http://www.cnchemicals.com/reports/0013C003/0013C003_2_carbon_black.shtml

http://www.cnchemicals.com/reports/0013T003/0013T003_1_titanium_dioxide.shtml

http://www.cnchemicals.com/reports/0013T003/0013T003_1_titanium_dioxide.shtml

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Main companies covered in this issue

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 (resource-based 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.

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.

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.



Supply & DemandChina’s TiO2 trade in October

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

export volume decreased.

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.

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.

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

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

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.

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).

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.

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 price hike, which has been in effect in Asia since December 1st, 2009, will provide room for import prices to rise, in the coming months, though the extent might not be large .

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.

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

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jan-

07

Mar-07

May-0

7

Jul-0

7

Sep-

07

Nov-0

7

Jan-

08

Mar-08

May-0

8

Jul-0

8

Sep-

08

Nov-0

8

Jan-

09

Mar-09

May-0

9

Jul-0

9

Sep-

09

Vo

lum

e, t

on

ne

0

500

1,000

1,500

2,000

2,500

3,000

Pri

ce, U

SD

/t

Import Export Import price Export price

Source: China Customs, CCM International

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

2009, tonne

Segment Jan-Oct 07

Nov-Dec 07

Jan-Oct 08

Nov-Dec 08

Jan-Oct 09

Coating 53,670 10,398 50,090 6,224 49,388 Plastic 41,998 7,987 38,256 5,097 31,295 Rubber 12,589 2,415 14,134 1,836 6,692

Fiber 13,569 2,588 11,919 1,603 5,657 Papermaking 5,607 1,700 7,920 1,280 6,600 Ink 1,348 324 1,800 196 1,581 Leather 1,345 174 987 427 617 Cosmetics 207 45 246 28 616 Food 87 180 1,187 0 358 Other 1,725 473 1,678 152 1,854 Rutile (Uncertain application)

106,831 21,253 102,550 12,348 100,681

Anatase(Uncertain application)

6,546 1,188 3,241 473 2,500




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.

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 to raise export prices given the booming domestic market. Meanwhile, domestic manufacturers are seeking to enhance competitiveness by improving product quality instead of relying solely on 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).

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 world-wide. 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 2: China’s TiO2 import situation by origin, 2007-Oct. 2009, tonne

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

Taiwan 66,645 13,521 59,640 5,737 56,617 Australia 48,983 9,015 46,510 4,957 52,076 U.S. 33,971 6,191 41,612 7,456 29,780

Japan 35,861 6,191 31,776 3,283 22,881 Germany 13,096 2,660 10,819 1,681 7,669 Mexico 5,359 1,650 9,100 2,000 9,240 Malaysia 8,296 1,288 6,661 393 7,093 UK 2,818 781 6,501 301 5,894 Singapore 7,035 1,527 3,172 1,358 6,126 Saudi Arabia 9,207 2,587 7,783 1,280 5,013 Other 14,251 3,312 10,433 1,218 5,448


TABLE 3: China’s TiO2 export situation by destination, 2007-Oct. 2009, tonne

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

Volume Share Volume Share Volume Share Volume Share Volume ShareAfrica 2,255 1.45% 422 1.86% 2,249 2.62% 622 5.25% 3,074 2.53%Asia Pacific

64,948 41.77% 10,136 44.66% 37,652 43.82% 5,739 48.41% 62,713 51.56%

Europe 34,402 22.13% 3,852 16.97% 16,279 18.95% 1,367 11.53% 11,545 9.49%Middle East

17,027 10.95% 2,375 10.47% 8,347 9.72% 667 5.63% 12,225 10.05%

North America

25,025 16.10% 4,042 17.81% 14,194 16.52% 2,757 23.25% 20,332 16.72%

South America

11,816 7.60% 1,867 8.23% 7,196 8.38% 704 5.94% 11,750 9.66%


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 7,007 1,217 15,410 2,080 17,285 Sichuan Lomon 21,522 3,935 6,573 1,005 16,938 Shandong Dongjia 20,443 2,151 3,990 775 10,805

Guangxi Jinmao 4,721 659 4,732 493 8,467 Wuxi Haopu 1,766 386 1,344 191 5,934 Guangxi Yazhao 6,861 1,009 6,500 361 5,166 Zhenjiang Titanium 9,393 657 1,677 381 4,295 Pangang Group 10,781 1,111 2,596 269 4,359 Shanghai Jianghu 2,855 431 3,398 210 4,202 Pinggui Feidie 4,477 795 3,663 662 3,904 Other 65,647 10,343 36,036 5,429 40,285


ISK’s TiO2 distribution in China

Ishihara 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.

ISK has set up strategic cooperation with a local trade company, Hangzhou Harmony Chemical Raw Material Co, Ltd. (Harmony Chemical), to develop its business in China. This has indeed helped ISK expand its Chinese market share. Fifty five percent of ISK’s TiO2 business in China was through Harmony Chemical by October 2009.

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

End user23.50%

Trader76.50%




UpstreamTitanium resource draws wide attention

As 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.

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.

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...

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 this field.

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.

Additionally, Hongda Group, China’s third largest electrolytic zinc company, in August 2008, has set up a joint venture with other nine companies including Panzhihua Gangcheng Group Co, Ltd, Panzhihua Jinjiang 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)

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.

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.

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.

TABLE 5: TiO2 manufacturers with their own titanium resource, 2009

Company 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 CityFumin Longteng Titanium Yunnan Fuming County

Note: *Southern area of Hongge Mining is captured by Hongda Group (2.0 billion tonnes*11% grade)Source: CCM International



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

Yunfu 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.

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.

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.

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

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. 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.

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

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.

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

On December 2nd, 2009, Panzhihua City held a ceremony for initiating prospecting of vanadium

titano-magnetite ore resource in Panzhihua-Xichang Region (Panxi Region).

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.

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

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%.



Titanium metal industry sets target for 12th Five Year

China Nonferrous

Metals Industry

Association (CNMIA) sets

its development target for

titanium sponge during

the 12th Five Year Plan

According to the target,

CNMIA aims to keep

national total capacity of

titanium sponge below

100,000t/a in the 12th Five

Year, indicating that there

may be no new titanium

sponge capacity in the

coming five years.

Hence, demand for titanium

ore in titanium sponge

production will not see any

major increase and titanium

ore consumption will

continue to be concentrated

in TiO2 production. In

general, titanium sponge

production utilizes high Ti

content titanium slag (TiO2

content higher than 90%) as

raw material and consumes

about 10% of all titanium

ore consumed in China.

Ching-Hing acquires titanium

mining right

On November 19th,

2009, Ching-Hing

(Hong Kong) Limited

(Ching-Hing) successfully

acquired titanium mining

rights in Ziyang County,

Shaanxi Province.

According to Ching-Hing, it

raises USD245.97 million for

acquiring the entire equity

interest in Greater China

Mining Resource Ltd. which

owns 95% share of Shaanxi

Tai Sheng Da Mining

Company Limited who holds

a titanium mining right

in Ziyang County, Shaanxi

Province (See issue 0911,

page 9).

However, it is uncertain

when the titanium ore can

be exploited, as Ching-

Hing has not obtained an

exploitation license from the

government.

The news about the

acquisition has boosted a

171.4% growth of Ching-

Hing’s stock on the Stock

Exchange of Hong Kong

after resumption of trading

on November 19th, 2009.

Company Dynamic

Jinan Yuxing to start rutile TiO2 pilot production

According to Jinan

Yuxing General

Chemical Plant (Jinan

Yuxing), it will start pilot

production for its new

rutile TiO2 production line

with first phase capacity of

100,000t/a in December

2009.

In fact, the new production

line is part of Jinan Yuxing’s

relocation project. Jinan

Yuxing has to shut down its

original production line for

relocation, due to its heavy

pollution to Xiaoqing

River. As scheduled, Jinan

Yuxing starts relocation at

the end of December and

will formally launch rutile

TiO2 production in the new

location in Q1 2010.

Before the relocation, Jinan

Yuxing had capacity of

20,000t/a for rutile TiO2 and

10,000t/a for anatase TiO2.

Jinan Yuxing plans to invest

in the second phase with

capacity of 200,000t/a,

aiming at a total capacity of

300,000t/a by 2012.

Pangang Titanium’s rutile TiO2 output hits new record

According to Pangang Group, Pangang Group

Titanium Panzhihua Plant (Pangang Titanium)

produced 1,930 tonnes rutile TiO2 in November 2009,

hitting a new monthly record.

Pangang Titanium’s current rutile TiO2 production line is

the first phase project with capacity of 20,000t/a launched

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.

Additionally, Pangang Group Mining Plant (Pangang

Mining) produced titanium concentrate ore of 25,590

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



Rutile TiO2 competition to be intensified

According to CCM’s survey, rutile TiO2 capacity under

construction in China currently has reached 385,000t/

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

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

In November 2009, Hubei Wuhan Fangyuan Titanium

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

of its rutile production line, with the first phase capacity of

20,000t/a.

According to Mr. Yang, sales director of Wuhan Fangyuan, the

company has started its rutile production line construction

early in 2007. But owing to difficulties with land acquisition

and the outbreak of the financial crisis, it is not until TiO2

demand rebounded rapidly in 2009 that Wuhan Fangyuan

started the trial production.

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

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

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

term profitability and development.

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

entrants, are suggested to improve product quality first and

broaden distribution channels to cope with international

competition, especially in the emerging markets in developing

countries like India and others in Southeast Asia.

TABLE 6: Rutile TiO2 capacity expansion of some manufacturers,

2010

Company Capacity 2010

Incremental capacity, t/a

Remark

Lomon Titanium 120,000 40,000 Expansion Jinan Yuxing

100,000 80,000Relocation & expansion

Panjin Titanium45,000 25,000

Expansion (chloride process)

Xingzhong Titanium 50,000 30,000 Expansion Xichang Ruikang 60,000 60,000 New entrantFumin Zechang 30,000 30,000 New entrant Jiangxi Tianguang 50,000 50,000 New rutile lineHuiyun Titanium 30,000 30,000 New rutile line Pangang Titanium 40,000 20,000 Expansion Wuhan Fangyuan 20,000 20,000 New rutile lineSubtotal 495,000 385,000 --National total 1,201,000 385,000 --

Source: CCM International



Downstream

Furniture coating to boost TiO2 consumption

On November 30th, 2009, Huizhou Huihuang

Xiangying Coating Co., Ltd. (Huihuang Xiangying),

China’s well-known furniture coating manufacturer

located in Huizhou City, held a ground-breaking ceremony

for its new coating production factory in Qingyuan City,

Guangdong Province. The factory has a production capacity

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

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

to meet the increasing demand and to capture more market

share, Huihuang Xiangying invested USD14.64 million in the

new facility to expand its production capacity. He indicates

that Huihuang Xiangying accounts for 70% market share of

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

with its current supply failing to satisfy customers’ demand,

constitutes the main reason for Huihuang Xiangying’s

production expansion.

By September 2009, China has produced 431 million pieces of

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

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

Booming furniture production is expected to drive up

furniture coatings output in 2009 to exceed 1,100,000 tonnes,

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

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

2009 (FIGURE 3).

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

0

1,500,000

3,000,000

4,500,000

6,000,000

7,500,000

9,000,000

2004 2005 2006 2007 2008 2009 Est.

Out

put,

tonn

e

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Gro

wth

rate

Furniture coating Coating

Growth of furniture coating Growth of coatingSource: CCM International

Besides domestic enterprises, coating multinationals have also

recognized the huge furniture coating market in China and

expanded their production capacity in China through

acquisition. Early in 2006, Valspar acquired the coating

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

manufacturers, enabling Valspar to capture more market

share in China (TABLE 7).

TABLE 7: Main furniture coating companies in China, 2008

Company Output, tonne

Akzo Nobel (including ICI) 100,000Valspar (including China Resources) 90,000Nippon Paint 50,000

Taiho International 50,000Bauhinia Paints 35,000Zhanchenda Chemical 30,000Carpoly Paint 20,000Sopel Chemical 20,000PPG 10,000


Paints and coatings is the largest end use sector of TiO2, and

furniture coatings play an important role in coatings. The

rapid development of furniture coatings is beneficial to the

growth TiO2 consumption. According to the average

consumption of TiO2 in coating, furniture coatings are

predicted to consume 110,000 tonnes TiO2 in 2009.

According to the purchasing department of Huihuang

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

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

require TiO2 with excellent physical and chemical properties,

Huihuang Xiangying will mainly use

DuPont’s TiO2.

In the coming years, China

will continue to accelerate the

urbanization. By the end of 2008,

China’s urbanization rate is 45.7%

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

grow and to be captured by imported

TiO2 with relatively good quality in the

near-term.



Indian coating industry boosts TiO2 consumption

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

USD 22 million to expand architectural coatings

production in its Indian plant, Kansai Nerolac Paints

Ltd. (KNP). After the launch of the new capacity (5,000t/

a) in 2010, Kansai Paint will have architectural coatings

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

Paint enhance its competitiveness in India.

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

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

rate of Indian economy, and this is expected to continue in

the coming years.

Currently, architectural coatings account for 75% of

the coatings capacity in India. The coatings market is

concentrated amongst a few companies, including Asian

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

The continually developing coatings industry in India will

certainly drive up TiO2 consumption. Though India has its

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

anatase TiO2, India still imports a large volume of TiO2 from

China. By October 2009, India had imported 10,233 tonnes

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

Yip’s Chemical achieves huge profit

growth in coating

Yip's Chemical Holdings Limited

(Yip’s Chemical) gained profit

of USD18.92 million from its coating

business, which constitutes 49%

of the company’s total profit, by

September this year, up 129% year on

year, according to its 3rd quarterly

report released on November 26th,

2009.

According to the report, good brand

reputation, lower price of raw materials,

capacity expansion, and huge market

in the mainland, jointly contributed to

its profit increase. In May 2009, Yip’s

Chemical launched its new plant in

Tongxiang, Zhejiang Province, which

helped to strengthen its architectural

coatings and inks businesses. Both

its architectural coatings and inks

businesses achieved a 23% growth rate.

Propelled by the huge domestic

market potential, Yip’s Chemical is to

strengthen its competitiveness through

capacity expansion and product

development. According to Yip’s

Chemical, it will continue to expand

its production capacity in Shanghai

(architectural coatings), Hebei and

Zhongshan (both for inks), respectively.

By the end of 2012, Yip’s Chemical’s

coatings production capacity (including

architectural coatings and inks) is

expected to increase by 60% or more.

Listed on Hong Kong Stock Exchange,

Yip’s Chemical has three core

businesses including solvents, coatings,

and lubricants, with 17 manufacturing

plants in China. Yip’s Chemical also

holds a 5% share of Sichuan Lomon

Price Update

Price update in December 2009

TiO2 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.

TiO2

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

Ex-factory prices of TiO2 and sulfuric acid in December 2009, USD/t

Area Rutile TiO2 Anatase TiO2 Sulfuric acid 98%

November December November December November DecemberSouth west 1,977-2,241 1,977-2,241 1,435-1,933 1,362-1,860 44-66 47-66East China 1,846-2,007 1,845-2,006 1,435-1,465 1,391-1,435 28-59 29-73

Central China 1,904-2,051 1,904-1,977 1,465-1,538 1,391-1,435 22-37 22-51South China N/A N/A 1,435-1,509 1,362-1,391 26-44 29-51




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.

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.

Ex-factory prices of titanium concentrate ore and titanium slag, Dec. 2009, USD/t

Area Titanium concentrate ore Titanium slag

Grade November December Grade November DecemberSichuan 40%-46% 82-117 82-110 74%-78% 366-388 366-388Hainan 45%-54% 103-125 100-120 N/A N/A N/A

Yunnan 45%-47% 92-103 85-100 77%-92% 395-513 425-557Guangxi 50%-52% 110-117 105-114 N/A N/A N/ALiaoning N/A N/A N/A 92% 571-601 600-615




Policy & LegislationPolicy interpretation related to TiO2 industry

-- By Liu ChangheEditor 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 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.

To gain more support from the government, the CNCIA

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

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

rebate.

To arouse deeper concern from TiO2 manufacturers on

environmental protection, TiO2 industry also released the

Declaration of Green TiO2 industry to help change the public’s

bad impression of the TiO2 industry.

For the Entry Criteria, it aims at restricting excessive TiO2

capacity expansion by raising the entry threshold for new

entrants, requiring that the minimum unit capacity should

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

chloride process. In addition, the Entry Criteria suggests that

the government should promote TiO2 industrial integration to

eliminate inefficient capacity as the coal-mining industry does.

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

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.

Liu ChangheChief 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

Raised transport cost curbs TiO2 price downturn

According to National Development and Reform

Commission, rail transport cost is raised from USD

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

2009.

The adjustment of rail transport cost will go against inland

TiO2 manufacturers’ product distribution, especially in

Panzhihua City. Generally, railway is a major means of

transport for delivering TiO2 produced in Panzhihua City, a

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

total. The increased cost will also impact Panzhihua’s

titanium ore transportation costs

The increased transportation costs help to slow down TiO2

price downturn that has begun since TiO2 demand started to

enter the slack season in November.



China continues tariff-free titanium slag import

On 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 ReportReview of Chinese TiO2 industry 2009----- policy, raw material, production

Chinese TiO2 industry has

experienced ups and downs in

the past two years. After the decline

caused by the global financial crisis

at the end of 2008, the industry

has seen an obvious rebound since

Q2 2009. Both production and

consumption of TiO2 are booming in

H2 2009, thanks to the government’s

supportive policies. The current

thriving TiO2 industry has driven

up demand for titanium ore that is

gradually depleting existing reserves

and feedstock production capabilities.

The anticipated increasing tightness

of feedstock supplies, has attracted

widespread attention, and increasing

investment in new ore resources from

investors and mining firms.

Policy

To cope with the 2008-2009 financial

crisis, the Chinese

government promulgated a series of

supportive policies, including stimulus

plans for ten industries and USD586

billion for an economic stimulation

package.. Driven by these supportive

policies, China has become the world’s

largest automobile manufacturer and

the largest automobile market by

October 2009, which will stimulate

TiO2 consumption in coatings, plastics

and other end-use sectors.

There are also preferential policies

closely related to TiO2 industry. For

instance, Chinese government has

abolished import tariffs on titanium

concentrate ore (HS Code: 26140000)

and titanium slag (HS Code: 38249099),

and also lowered the tariffs on sulfuric

acid (HS Code: 28070000) in 2009.

Meanwhile, to protect domestic TiO2

producers, it subsidizes titanium ore

and feedstock imports payment of

interest expense on loans for working

capital or approved projects since

September 2009.

Environmentally related policy

is another driver for domestic

TiO2 development. In 2009, the

government heightened environmental

requirements for TiO2 production.

Some manufacturers, such as Panzhihua

Dingxing, Panzhihua Taihai, etc,

suspended their production due to their

inadequate environmental protection

measures. In order to improve

environmental protection awareness

and sense of social responsibility, China

National Coatings Industry Association

(CNCIA) Titanium Dioxide Branch

released a Declaration of Green TiO2

Industry Guidelines in August 2009.

Next year, the government is expected

to raise entry threshold for new entrants

in TiO2 industry and to resume tax

rebates that were discontinued in 2007,

for TiO2 manufacturers who implement

adequate environmental protection

measures.

Raw material

Compared with 2008, Chinese TiO2

industry enjoyed a relatively stable raw

material market in 2009.

For sulfuric acid, owing to the rapid

capacity expansion and slow demand

growth, Chinese sulfuric acid capacity

has experienced redundant construction



and oversupply, which it is expected to

maintain for many years to come. But

with shrinking capacity share of sulfur-

burning process, sulfuric acid price will

play a less important role in influencing

sulfur price, which is mainly influenced

by crude oil price. Besides, many TiO2

manufacturers have built their own

sulfuric acid production lines to match

with their TiO2 production. Benefiting

from stable sulfuric acid prices, TiO2

manufacturers improved profitability in

2009.

For titanium ore, its demand keeps

increasing with slight price fluctuation

in 2009. However, with gradually

exhausting resources and soaring

demand, titanium ores and feedstocks

have drawn wide attention from many

TiO2 manufacturers and mining

companies that have plans to invest

more in the ore sector. Some enterprises

including JNMC and Pangang Group

even have attempted to acquire titanium

ore exploitation rights abroad. But

JNMC’s failure indicates that domestic

enterprises may still have long way to go

in acquiring mining rights abroad.

Despite the rapid development of

domestic titanium ore resources, China

still relies heavily on imported titanium

ore. By October 2009, it has imported

a total of 1,154,665 tonnes titanium ore

concentrate, up 8.2% over previous year.

In the foreseeable future, oversupply of

sulfuric acid and heavy dependence on

imported titanium ore are expected to

remain unchanged.

Production

With rebounding demand and

improved environmental protection,

TiO2 operating rates have seen rapid

increases this year, reaching nearly 90%

in Q4 2009, as the soaring titanium ore

imports indicates.

Rutile TiO2 capacity expansion is on-

going in 2009. Besides rutile TiO2

manufacturers expanding capacity,

many anatase TiO2 manufacturers are

shifting to rutile TiO2 production or

its post treatment. Capacity expansion

and production shifts can actually help

the manufacturers to improve their

profitability in the short term but also

has greatly intensified the competition

amongst Chinese producers.

Some manufacturers, such as Panyu

Titanium, are working hard on

competitiveness enhancement through

product quality improvement, instead

of capacity expansion. This has helped

them capture more high-end markets.

In 2009, China has set a target that TiO2

capacity utilizing the chloride process

will account for 15% of the national total

by 2015, which seems too optimistic.

Nevertheless, Jinzhou Titanium,

China’s first manufacturer adopting

the chloride process, has doubled its

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

second chloride process line is under

construction and proceeding smoothly.

In the coming years, capacity expansion

will continue in China and TiO2

production will be more environmentally

friendly.

Profitability to shrink in Q1 2010

With TiO2 demand entering a slack season, TiO2 price

has dropped gradually since November 2009, which

will impair TiO2 manufacturers’ profitability in the short

term, despite the huge profit manufacturers have gained in

past few months.

Driven by soaring domestic demand and price hikes initiated

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

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

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

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

negotiation, prices in actual deals have indeed risen. For

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

2.3% respectively for rutile and anatase TiO2.

TiO2 manufacturers have gained huge profits in the domestic

market in the past few months. Take Anhui Annada for

example, benefiting from booming demand and soaring prices,

it gained USD16.84 million sales value from its TiO2 business

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

of its unit profitability by USD 0.007.

Besides huge domestic profit margins, export value of TiO2

manufacturers’ also rose.

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

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

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

On the contrary, some manufacturers’ TiO2 export volume

has increased through entry into new markets. Take Henan

Billions for example, its average export price increased from

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

export volume also rose from 1,674 tonnes to 2,067 tonnes

over the same time period. This achievement is attributed to

Henan Billions’ strengthened efforts in its new markets in

Kazakhstan, Columbia, etc, in H2 2009.

Increases in export price and volume jointly contributed to



a soaring export value. For instance,

Henan Billions’ monthly export value

increased from USD2.71 million in

June to USD3.64 million in October, up

34.3%.

Besides, though prices of sulfuric acid

and titanium ore also increased by

25.0% and 4.0% respectively during

June and October (FIGURE 5), it only

pushed up production cost of TiO2 by

about USD 40/t.

Accordingly, even taking the increased

production cost into consideration, the

profitability of TiO2 business increased

by about USD50/t during June-

October.

Nevertheless, with TiO2 demand

entering a slack season because of

the coming Spring Festival, TiO2

prices have dropped slightly since

November 2009 and are likely to

keep declining throughout Q1 2010.

In addition, possible increases in

electricity price and transportation

cost, as well as the gradual rise of

raw material prices will push up

production costs of TiO2 in the near

future.

Hence, price downturn and rising

production cost will jointly shrink the

profitability of TiO2 manufacturers

in Q1 2010.

FIGURE 4: TiO2 price, Jun. ~ Dec. 2009

1,200

1,350

1,500

1,650

1,800

1,950

2,100

June

July

August

Septem

ber

October

Novembe

r

Decem

ber

USD

/t

Exfactory rutile Exfactory anatase Export rutile Export anatase

Note: ex-factory price is usually higher than price in actual deals as there may be certain room for negotiation. Source: CCM International

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

30

45

60

75

90

105

120

June

July

August

Septem

ber

October

Novembe

r

Decem

ber

USD

/t

Sulfuric acid Titanium concentrate ore


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Titanium dioxide China News Sample - Published by CCM International Ltd