The Chinese market has become an important part of the global titanium market
Since the new century, China's titanium industry has made great progress. The annual production of titanium sponge in China has jumped from 2-3 thousand tons at the beginning of this century to more than 70,000 tons, accounting for one-third of the world's total output; the annual output of titanium dioxide has grown from 300,000 tons at the beginning of the century to nearly 3 million tons. , accounting for 45% of the total global production. With the rapid increase in the output of downstream products, China's demand for titanium raw materials has also increased rapidly. At present, China's annual consumption of titanium raw materials accounts for more than 45% of the global total demand. In addition, the previously mentioned sponge titanium production accounts for one-third of the world's total, and titanium dioxide production accounts for 45% of the world. It can be said that the current China has become The most important component of the global titanium industry. The quality of China's titanium market and the progress of China's titanium industry will have an important impact on the global titanium industry.
External influence is short-term internal development is the long-term factor
Some people believe that the changes in the international trade environment last year led to a slowdown in the Chinese market. However, the author believes that the impact of Sino-US trade friction on the market is overestimated by some people. China's titanium and titanium dioxide exports to the US account for only 1.6% of the total output, and the dependence is not high. In 2018, the tense trade friction between the two countries not only did not affect the export of the United States, but also prompted US customers to increase the purchase of Chinese titanium dioxide, resulting in more than double the annual export volume to the United States in 2018. From the perspective of long-term development, if the Sino-US trade friction escalates, it will be more favorable to the development of China's titanium dioxide market. China is building a chlorinated titanium dioxide plant. From the perspective of product structure, China's exports to the United States are mainly sulfuric acid titanium dioxide, and the main import is chlorinated titanium dioxide. If tariff barriers arise, China can easily digest the 45,000 tons of sulfuric acid titanium dioxide that is exported to the United States every year, and reject the 40,000 tons of chlorinated titanium dioxide imported from the United States every year to make a new chlorinated titanium dioxide factory in China. Out of the market space, is conducive to the development of domestic chlorination titanium dioxide. In 2018, export markets, including the United States, continued to grow at a high rate. In contrast, the slowdown in domestic market growth is a more important issue.
In recent years, some new policies and market changes have had an ongoing impact on the Chinese titanium industry. In the face of these effects, Chinese companies are constantly making adjustments. The most influential factor in the market in recent years is the pressure from environmental protection policies. Since 2016, the Chinese government has strengthened the intensity of environmental verification and will no longer tolerate corporate emissions. This makes it necessary for companies to increase their investment in environmentally friendly equipment. For some small and medium-sized enterprises, the funding threshold for improving environmental protection equipment exceeds the capacity of enterprises, causing some small and medium-sized enterprises to stop production and withdraw from the market. In addition, some companies have limited capacity to dispose of waste. In order to ensure compliance, these companies have to reduce production to match the output of waste to the processing capacity. In order to reduce the production of waste, some companies have also chosen higher quality raw materials, but this has also pushed up their production costs.
Overseas investment and process improvement are important means to solve future supply of raw materials
China's titanium industry has also shown some problems in the process of rapid development. First, domestic titanium ore production growth has been relatively slow, resulting in a gradual increase in dependence on imported ore. China's self-sufficiency rate for titanium mines reached 67% in 2014, but has now fallen back to 58%. Secondly, while the demand for imported titanium ore increased, some major importing countries experienced fluctuations, which led some downstream enterprises to have no stable supply of raw materials, which had an impact on production. The instability of raw material supply has adversely affected the product quality and production cost of titanium dioxide enterprises. In addition, the quality of imported titanium ore has been declining in recent years. Among them, the decrease of TiO2 content leads to a decrease in the production efficiency of titanium dioxide enterprises, and also brings more waste production. After 2016, China's environmental protection requirements have been significantly strengthened, and the increase in waste has caused tremendous pressure on titanium dioxide enterprises. Some regions have reduced production or temporarily stopped production due to emission problems. The decrease in the content of TiO2 is generally accompanied by an increase in the content of impurity elements, which also affects the quality of downstream products. Downstream companies need to invest more in production to eliminate the impact.
As China's demand for titanium raw materials increases rapidly, more and more companies are beginning to invest in mines overseas. At present, Africa is the region with the most concentrated investment by Chinese enterprises. Australia is also a non-ideal investment destination. Some ideal titanium mine projects are under development around Perth. We also hope to see more successful cases of cooperation with Chinese companies and achieving a win-win situation. In China, due to the huge demand caused by future chlorination projects, some companies are developing new technologies to allow more low-grade titanium ore to be processed to meet the requirements of chlorinated titanium dioxide production, thereby improving low-grade titanium ore. the value of. If such technologies are industrialized smoothly, they will solve the material dilemma faced by China. So far, China's demand for titanium raw materials is mainly based on sulfuric acid method, but the future growth point has become raw materials such as chlorinated titanium ore and rutile. China's domestic titanium minerals cannot be used as raw materials for chlorination, and almost all rely on imports. This is also the fundamental reason why China is striving to develop new technologies for changing the suitability of titanium ore. Before the emergence of new technologies, China's huge demand for chlorinated raw materials in the future will inevitably push up its prices.