Daily Economic News: Domestic titanium dioxide production capacity accounted for more than 50% of the world, but still stuck in the neck? Xie Bingkun, Chairman of Kuncai Technology: Domestic chlorinated titanium dioxide product quality is not high yet

April 14, Kun color science and technology (SH603826, share price 56.33 yuan, market value of 26.362 billion yuan), chairman of Xie Bingkun accepted, including the "Daily Economic News" reporter, including media interviews.

Titanium dioxide industry giants, fierce market competition, is recognized as the red sea field. Xie Bingkun knows the status quo of the industry, but he has another view, Kuncai science and technology of the extraction method of chlorinated titanium dioxide quality is comparable to or even exceed the quality of international titanium dioxide giants. In Xie Bingkun's words, you can do the cost of sulfuric acid method, chlorination method of the selling price.

"China's titanium dioxide demand is great, and there is no qualified chlorinated titanium dioxide can represent China, neck firmly stuck abroad. For example, white shirts, less than a year on the yellow off; toilet bought back is white, not long after the yellow, is because the sulfate titanium dioxide is extremely unstable." Xie Bingkun said.

Xie Bingkun Photo credit: Interviewee's contribution

Domestic chlorinated titanium dioxide products are not competitive enough

China is the main producer of titanium dioxide (chemically known as titanium dioxide) in the world. Data from the U.S. Geological Survey show that by the end of 2022, there will be a total global production capacity of about 9.4 million tons of titanium dioxide, and China will have about 5 million tons, accounting for 53% of the global production capacity.

China is the main producer of titanium dioxide (chemically known as titanium dioxide) in the world. Data from the U.S. Geological Survey show that by the end of 2022, there will be a total global production capacity of about 9.4 million tons of titanium dioxide, and China will have about 5 million tons, accounting for 53% of the global production capacity.

From the domestic data, a similar situation of overcapacity is also presented. Titanium dioxide industry technology innovation strategy alliance data show that in 2022, China's total effective capacity of 43 titanium dioxide enterprises across the industry is 4.7 million tons, the total output of the year is 3.914 million tons, the industry average capacity utilization rate of 83.28%.

For the production capacity is much larger than the demand, Como analyzed that 60% of the global demand of 6.8 million tons is the demand for high-performance titanium dioxide pigments, and the important reason for the overcapacity is the structural mismatch. "We believe that the capacity utilization of high-performance titanium dioxide pigments is much higher than that of general-purpose, low-performance titanium dioxide pigments." Como said in its 2022 annual report.

Titanium dioxide industry technology innovation strategy alliance secretary-general, chemical industry productivity promotion center titanium white sub-center director Bisheng pointed out in his paper, recently launched iron phosphate project will also produce by-product titanium dioxide.

"It can be expected that several years later, even if only part of such projects can be realized, the total capacity of China's titanium dioxide industry is likely to exceed 10 million tons per year, and at that time, the market outlook and the industry's outlook is really unimaginable." Bisheng said.

In fact, the "general-purpose, low-performance titanium dioxide pigments" referred to by Como are mainly titanium dioxide sulfate pigments.

The National Development and Reform Commission (NDRC) formulated the industrial policy of "Restriction of 'Newly Built Sulfuric Acid-Method Titanium Dioxide'" in the "Guidance Catalogue for the Adjustment of Industrial Structure (2011 Edition)" issued in 2011, encouraging the production of titanium dioxide by chlorination method with a single-line capacity of 30,000 tons/year, and the "Guidance Catalogue for the Adjustment of Industrial Structure (2019 Edition)" promulgated in 2019 maintains this industrial policy.

"Until now, the domestic (titanium dioxide) production situation is 90% of the sulfate method of titanium dioxide, and (the remaining) that 10% of the quality of chlorinated titanium dioxide is still not as good as the last of the ten foreign enterprises." Xie Bingkun said.

According to the titanium dioxide industry technology innovation strategy alliance secretariat and chemical industry productivity promotion center titanium white sub-center statistics, in 2022, the chlorination method of titanium dioxide production accounted for 12.70% of the country's total output of titanium dioxide in the year. 2022, China's titanium dioxide industry in addition to shutdown and closure of the total number of 43 full-process type producers with normal production conditions. Among them, there are 2 pure chlorination process (CITIC Titanium, Yibin Tianyuan Hai Feng and Tai), 3 with both sulfuric acid process and chlorination process (Long Bai, Pangang Vanadium and Titanium, Lubei Chemical), and the remaining 38 are sulfuric acid process.

Pricing is lower than foreign competitors

The main product of Kuncai Technology has been the pearlescent material.

"90% of pearlescent customers use titanium dioxide, Kuncai made a statistic, we now (pearlescent) customers cover 60% ~ 70% of the global demand for titanium dioxide. We have a complete global market network system, including warehousing, logistics, sales settlement and service" Xie Bingkun said.

Thumbnail sketch of Kuncai Technology's titanium dioxide plant Image source: reporter Zhao Li Nan photo

It is also because of the intersection of pearlescent materials and titanium dioxide, making Xie Bingkun determined to enter the industry.

"The ratio of the market size of pearlescent materials and titanium dioxide is 1:100, if the pearlescent materials global (market size) is 100,000 tons, then titanium dioxide is 10 million tons. The current statistics are incomplete, the official statistics are more than 8 million tons, and then I added up the enterprises that did not have statistics, totaling nearly 9 million tons."

Xie Bingkun said: "do pearlescent materials need a lot of titanium tetrachloride, titanium tetrachloride because of the transportation radius and price instability, to the enterprise's generation has brought a lot of trouble, early we just want to use the extraction method to produce titanium dichloride instead of titanium tetrachloride. In the observation, we found that the quality of titanium dioxide produced by titanium dichloride is very good, even more than the chlorination method (titanium dioxide). But in the process of industrialization, we encountered too many difficulties. 13 years, we practiced the feasibility of the process, the reliability of the material and the stability of the equipment."

Kuncai Technology Extractive Chlorinated Titanium White Production Workshop Image Source: Interviewee's Picture

Kuncai Technology said in a previous announcement that it uses the extraction method, which is the third generation of titanium dioxide production method. The company introduced the extraction method process to ilmenite powder as raw material, the use of hydrochloric acid to dissolve ilmenite powder, freezing crystallization of ferrous chloride, solid-liquid separation of titanium ions containing the acid solution. After extraction and reverse extraction separation to get titanium dichloride, titanium dichloride after hydrolysis, solid-liquid separation, calcination, post-treatment to get the finished product of titanium dioxide. Ferrous chloride is roasted at high temperature to prepare iron oxide and recover hydrogen chloride. In the whole system, hydrochloric acid and extractant are recycled.

"Now the quality of titanium dioxide should be able to reach or exceed the quality of the first foreign brands, 200,000 tons of production lines have been built, and in the future we strive to put in six production lines, that is, with a capacity of 800,000 tons. The development plan of the whole project is expected to reach about 1.5 million tons." Xie Bingkun said.

Baichuan Yingfu data show that the downstream of titanium dioxide mainly includes coatings, plastics, paper and ink, accounting for about 59%, 23%, 10% and 3% respectively.

Data from the China Coatings Industry Association (CCOIA) shows that China's coatings production declined in 2022, mainly due to the downturn in the real estate industry.

Data source: wind, every reporter charting

Along with the downstream downturn of titanium dioxide and the continuous expansion of low-end production capacity in the industry, the price of titanium dioxide also declined in 2022. The export price of China's titanium dioxide declined from about US$3,000 per ton at the beginning of the year to about US$2,000 per ton at the end of the year. However, the price of imported titanium dioxide increased instead of declining in 2022.

In February this year, converted to RMB, China's imported titanium dioxide prices are higher than exported titanium dioxide prices of about 10,000 yuan / ton. In other words, the gap between import and export prices is the price gap between high-end titanium dioxide and low-end titanium dioxide.

"This year Kuncai's titanium dioxide large number of the market, these customers are a large amount of various industries or leading enterprises, they have a special demand for the cost, to cultivate new suppliers. We are currently positioning the market is cheaper than foreign imports competitors 1000 yuan, this price is recognized by the customer, which will be able to respond to customer recognition." Xie Bingkun claimed.

In Xie Bingkun's view, the company's extraction method of chlorinated titanium dioxide has a clear advantage in cost, "Kun Cai sells the price of chlorinated titanium dioxide, while the cost is the price of titanium dioxide sulfate."

"We are highly concerned about the manufacturing costs of our foreign counterparts, the international first-tier brands about 28,000 yuan / ton cost, we positioned within 30,000, the cost of foreign brands is very difficult to bear, they have to sell to more than 32,000 yuan / ton to make a profit, the highest up to 36,000 yuan, usually around 33,000 yuan. Sell to 30,000 / ton, they will feel a lot of pressure." Xie Bingkun claimed.

Source: Daily Economic News