Written by Xu Gaodong and translated by Xin Xue
Tio2 plays an irreplaceable role in many fields. In China, many people are highly concerned about the development status of titanium industry. Currently, foreign products flooded the domestic high-end tio2 market. Then where are the homemade products? Why did they fail to grasp the high-end market? In this article, the author will analysis the reasons and the ultimate destination of the initiative in domestic Tio2 high-end market.
I. A severe shortage of domestic high-grade titanium dioxide products
For a long time, the homemade Tio2 products have crowded in the low-end market owing to their poor quality and performance. This situation mislead many insiders that we don＇t have high-grade products domestically. Actually this view is incorrect. One year ago, the quality index and application performance of the rutile tio2 product R-298 produced by Panzhihua Iron and Steel Group Chongqing Titanium Industry Co., Ltd. both achieve the level of imported mid-range Tio2 according to the testing results of domestic authoritative quality inspection organiztion. Subsequently, with scientific and technological breakthroughs, the quality of the product is gradually improved and the market promotion work has also been in full swing. R-298 is a new generation universal rutile Tio2 Chongqing Titanium developed in the process of upgrade research. Having applied advanced hue and particle size control technology as well as zirconia and alumina inorganic coating technology, it has the advantages of easy dispersion, good whiteness, high brightness, strong hiding power and high weather resistance. It can be applied to paint, ink and other fields and it can also be used for coloring plastics. Once this product came out, it breaked into the domestic high-end market, which encouraged manufacturers who are preparing to develop high-grade titanium products. In addition, Sichuan Lomon, Jiangxi Tim Light and some other titanium company are also committing themselves to developing high-end rutile tio2 products. Nevertheless, on the whole, few titanium enterprises are able to produce high-end products.
In recent years, titanium enterprises sprung up in China. However, high-end products are still in severe shortage despite of the increased output due to the lagging technology and equipment, nonstandard production as well as blindly expanded productivity. All through these years, low-level blind expansion of productivity has been a serious hidden danger of Chinese titanium industry in that the price squeeze resulting from the flooding of low-end products not only led the TiO2 enterprises to lose profits but also caused them to suffer frequent anti-dumping investigations in the international market. Since July, 2006, Korea has collected anti-dumping duties on Chinese Titanium Dioxide for three years because they said their enterprises suffered losses from China＇s dumping of TiO2; In July, 2008, India carried out anti-dumping investigation on Chinese TiO2...As our tio2 products were oversupply in domestic low-end market, our enterprises had planned to sell the stocks in foreign market, but unluckily, they encountered difficulties too. Although we export a lot of Tio2, homemade tio2 products seldom appear in the domestic high-end market and most of the high-end products depend on imports.
II. Foreign TiO2 products are 5000-8000 yuan higher than domestic ones
Because of the poor quality and performance, the price of homemade tio2 products is much lower than their foreign counterparts. The big price gap mainly lies in the fact that the output of ordinary low-grade anatase products account for a large proportion whereas the low-quality high-end special anatase and rutile products can＇t compete with the imported homogenous products. Some time ago, after price increase, there is still a price difference of 5000-6000 yuan between the homemade anatase Tio2 products and their imported counterparts. Meanwhile, the price of sulfuric acid rutile products is 4000-5000 lower than their foreign counterparts. As far as the quality price ratio is concerned, there is still much room for domestic rutile products to increase their prices. At present, the overall price of domestic tio2 products is 5000-8000 yuan lower than imported products(Special varieties of chemical fiber matting are not included). To narrow this gap, the key method is to improve the quality and grade of the products. Currently, the quality of homemade new rutile Tio2 product R-298 is greatly enhanced and is said to reach the international standard of Ishihara R930. As a result, the price gap between it and foreign homogeneous high-end products is reduced to within 5000 yuan. Therefore, it becomes a successful example of improving the TiO2 products＇ grade.
III. Foreign brands flood domestic high-end titanium market
In previous years, because of the rapidly increased demand, most domestic enterprises expand their scales and add new equipments. As a result, the Tio2 output increased substantially. However, most of them are low-and-medium-grade products, subsequently, the low-end market is almost saturated and there are still large gaps in high-end market. Under such situation, a large number of foreign enterprises crowded into Chinese market. According to a professional analysis report, in the domestic high-end market, the share China Tio2 manufacturers occupy is less than 20%. Most of the market shares are occupied by DuPont, Millennium, Kerr-McGee and other foreign chloride Tio2 manufacturers. While among the sulfuric acid Tio2 manufacturers, Ishihara accounts for a large share in domestic high-end Tio2 market and it has the ambitions of expanding its market share and even controlling the whole market.
Why does Ishihara seize Chinese high-end Tio2 market without scruple? It is reported that it has strong background. Ishihara Sangyo Co., Ltd. mainly produces high-end titanium dioxide. It has entered Chinese market since 1950s and play an important role in Chinese and international titanium industry. China titanium industry standard was established according to the standard of Ishihara. In 2006, the Tio2 output of Ishihara (including rutile type and anatase type) is about 0.2 million tons, accounting for 4% of the global market share. Different from DuPont, which only adopts the chlorination process, Ishihara uses both sulfuric acid process and chlorination process. Despite of pollution and other shortcomings, sulfuric acid products occupy an absolute proportion in China＇s market share owing to their superior durability. Chlorination Tio2 has great advantages internationally since it＇s blunish in hue, visually whiter and environmental-friendly in production process. Not long before, a senior management staff of Ishihara declared that as its most important market in Asia, especially as an emerging high-end Tio2 market, China has a broad market prospect and therefore Ishihara is planning to increase its investment in China.
In the natural course of event, domestic high-end titanium market should be dominated by Chinese titanium enterprises, but in fact, it＇s occupied by the global top ten titanium giants and homemade Tio2 brands even don＇t have a living room in the market. Hereupon, the author thinks that it＇s time for domestic titanium enterprises to multiply their efforts to catch up with their foreign counterparts.
IV. We will occupy the high-end domestic TiO2 market sooner or later
Although China＇s titanium industry is congenitally deficient because of late start, it has great development potential. In recent years, China＇s titanium industry, especially rutile Tio2, grow rapidly, and meanwhile their quality is improved to a large extent. From the year 2000 to 2007, the market share of homemade products increased by 3.11% every year. In 2008, the yield of homemade Tio2 declined as a result of the financial crisis. However, in 2009, a transitional period of the crisis, Tio2 output increased rapidly under the rebounding trend of domestic economy. Particularly, the initiation of some domestic high-end rutile Tio2 programmes gradually filled the gap of high-end titanium products. China＇s titanium industry doesn＇t have a long history, but it has been developing at an amazing speed and has achieved the leap from quantity to quality. For instance, since 2004, the output of rutile Tio2 has increased by 43.35% every year, becoming the main impetus of the global Tio2 growth. In recent years, although the growth rate of domestic Tio2 is going down, the output is rising every year ( except the year 2008 when the severe economic crisis occurred) and the quality is improving continuously. Along with the asset restructuring and technology advances of the domestic titanium industry in recent months, China titanium enterprises achieved upsizing and centralization, meanwhile, the grade of their products is further improved. For the moment, the independent innovation capability of China titanium enterprises is substantially increased, at the same time, the product structure is becoming more rational under the market regulation and the industry＇s guidance. It＇s predicted that three years later, the yield of domestic rutile tio2 products will occupy more than half of the total output. At that time, domestic high-grade Tio2 products will occupy more market share, subsequently, more and more homemade brands will enter the domestic high-grade Tio2 market. According to this trend, China＇s titanium industry is expected to dominate the domestic high-end market within a few years.
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