After China’s accession to the WTO, especially during the 13th and 14th Five-Year Plans, the titanium dioxide industry has maintained a stable expansion. The annual growth rate of titanium dioxide production is approximately 7%, exceeding GDP growth. Simultaneously, with positive policy guidance, the industry is rapidly developing towards environmental protection. Environmentally friendly chloride route has achieved industrial scale, and the hydrochloric acid route has entered the initial stage of industrialization.
China is the world’s largest titanium dioxide producer. In 2022, the country’s total titanium dioxide industry capacity reached 4.87 million tons/year (52% of global capacity), with a production of 3.86 million tons and an industry operating rate of 79%. China also holds the title of the world’s largest exporter, with 1.41 million tons exported in 2022. From 2019 to 2022, the annual growth rate of China’s titanium dioxide exports was 12%. In 2022, the country imported about 120,000 tons of titanium dioxide, with a low external dependency, mainly consisting of high-end products.
The industry comprises 43 active enterprises, with a high concentration. In 2022, the top five enterprises accounted for 46% of domestic capacity, and the top ten enterprises produced approximately 70% of the national output, leaving the remaining small and medium-sized enterprises with less than 30% of the production share.
Domestic policies encourage the chloride process, but currently, many enterprises adopt the sulphate route
Based on the actual situation of natural resource types, the domestic titanium dioxide industry primarily utilizes the sulphate route to process titanium ore and produce titanium dioxide, with the concurrent production of a substantial amount of heptahydrate ferrous sulfate. Meanwhile, the chloride route faces challenges due to high raw material requirements and a shortage of raw material supply, resulting in a slow development of the domestic industry. The titanium ore consumed by the titanium dioxide industry in China mainly comes from domestic sources, constituting approximately 70% of the total consumption, while a significant amount still needs to be imported from abroad. The country restricts the export of titanium ore, leading to extremely low export volumes.
In China, titanium dioxide production enterprises primarily employ the sulphate route with capacity accounts for 80% of the total capacity, chloride route capacity constitutes 18%, and hydrochloric acid route capacity represents 2%. Currently, among the 43 titanium dioxide production enterprises in operation, the majority adopt the sulphate route. Specifically, 37 enterprises exclusively use the sulphate route, 2 enterprises employ chloride route (such as CITIC Titanium Industry, Yibin Tianyuan Groupt), 3 enterprises simultaneously use both sulphate and chloride route (Longbai, Pangang Groupt, and Lubei Chemical), and 1 company (Kuncai Technology) utilizes the hydrochloric acid route.
In terms of output of titanium dioxide in China, the sulfuric acid process accounts for 87%, while the chloride process constitutes 13%. In 2022, the first industrial-scale hydrochloric acid process titanium dioxide production facility constructed by Kuncai Technology just commenced production, with hydrochloric acid process production being negligible.
The country has introduced a series of relevant industry policies aimed at encouraging the titanium dioxide industry to optimize the product structures of the sulfate and chloride routes. Enterprises are encouraged to prioritize the adoption of the chloride route and to give priority to the construction of chloride route titanium dioxide production capacities exceeding 30,000 tons per year. Regarding the sulfate route, there are restrictions and efforts to phase out capacities below 30,000 tons per year, but there will be no restrictions on the continued construction of capacities exceeding 30,000 tons per year.
Enterprises actively adjusted their industrial development direction, undertaking new constructions and expanding capacities to exceed 3.66 million tons per year.
Industry enterprises, guided by policies, are actively adjusting their industrial development direction. According to publicly available information, there are a total of 11 titanium dioxide planned new construction and expansion projects, with a combined capacity of 3.66 million tons per year. Among them: chloride process capacity of 1.86 million tons per year, sulfate process capacity of 0.7 million tons per year, hydrochloric acid process capacity of 1.1 million tons per year (with a target of 0.6 million tons per year by 2025).
To address the challenges of substantial waste generated in the process of sulphate route and the tight supply of raw materials in the chloride route, China is also developing high titanium slag (TiO2 content ≥75%) products with relatively low iron content and relatively high titanium content. However, due to the fact that most of China’s titanium ore is rock ore with high calcium oxide and magnesium oxide content, high-titanium slag produced from such materials cannot fully meet the requirements of titanium dioxide production. Additionally, there is a need to improve the industry’s production technology, as the current scale of the high-titanium slag industry is small, and its development is slow. It is not yet able to completely replace titanium ore as the primary raw material for downstream titanium dioxide production.
Titanium dioxide is primarily used in downstream industries such as the coating industry, followed by the plastic and paper industries. It is anticipated that in the next 10 years, the growth rate of domestic titanium dioxide consumption will be generally in line with the growth rate of the domestic GDP. The growth rate of exports will be similar to the global GDP growth rate, and the import volume of titanium dioxide is expected to remain relatively stable. With the continuous expansion of domestic titanium dioxide production capacity, there is a possibility of gradual overcapacity in the industry in the future.
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