China’s titanium dioxide (TiO2) industry is set to reap huge benefits from the $586 billion injection the country ploughed into its economy in 2009 with car production one of biggest beneficiaries of a buoyed economy.
As a direct consequence, TiO2 consumption is expected to grow by 15% in 2010.
The pigment, which is basis for all white paint, has seen a strong recovery in China since mid-2009, with the vast majority of domestic producers operating at full capacity since.
The is very different to the demand scene outside of China where recovery has been sluggish and slow with Europe and North America, in particular, suffering at the hands of cancelled building programmes and a sharp decline in automobile production which saw General Motors being over taken by Japan’s Toyota Group as the world’s leading car maker.
“As a country, China has been the world’s largest auto manufacturer which has largely boosted consumption of TiO2 in coating and plastics,” Jack Lin of Zhongshan, Guangzhou based TiO2 consultants CCM International Ltd explained to IM.
“In 2010, the Chinese government will further implement its stimulus measures, which will certainly promote TiO2 demand and is expected to result in a 15% or a higher growth this year.” Lin added.
According to the China Association of Automobile Manufacturers (CAAM), and what come as astonishing growth figure, domestic car sales rose by 46.15% between 2008 and 2009 with production setÊto increase by 10% from 13.79m. to 15m. units in 2010. This compares with the USA’s output of 10.43.
“China’s local economy is still in a period of stable growth and hasÊborne little impact from the global market environment. As a pillar industry, theÊcar sector will continue to enjoy government support, and residential car demand remains very robust,” said CAAM.
The stress that continued TiO2 demand from China will place on feedstock sources is likely to become apparent in within the next couple of years with a number of new sources of ilmenite and rutile failing to reach production.
“China hit a record in titanium ore import in 2009, which increased by 27.9% over previous year. With TiO2 capacity expansions coupled with governmental support such as import tariff elimination since 2008, China’s import volume of titanium ore will keep on increasing within the next few years,” said Lin.
How China boosted its auto production
$586 billion stimulus
Stimulus not only boosted construction and auto sectors but improved the consumption environment which together with rising transport costs saw more domestic purchase of cars
Purchase tax
Slashed by half to 5% on all new 1.6 litre car buys and below
Grants
Rural consumers received 5,000 yuan ($735) grant for vehicles of 1.3 litres and below
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