TiO2 producers in China seeing excess inventories gradually being digested following lift in sales prices in April by 300 yuan/tonne to 600 yuan/tonne

Elyse Blye

BEIJING , May 13, 2014 (China Economic Information Service) – China Focus: titanium dioxide sector to go out of trough as pollution fight fastens capacity cut

China's titanium dioxide producers are seeing hopes of recovery as their excess inventories are gradually been digested and the sector's overcapacity wipeout has been fastened.

Since April, Chinese titanium dioxide manufacturers have widely lifted up their sales prices, by 300 yuan to 600 yuan per/tonne or 3-to-5 percent differently.

In China, titanium dioxide industry is plagued by excessive production capacity and serious pollution. Publicized data shows that China is capable of producing 3 million tonnes of titanium dioxide annually at present and by 2015, the figure will exceed 4 million tonnes.

As massive capacity expansion brings necessarily fierce competition and low profitability, many Chinese titanium dioxide producers are at the verge of net losses, not to mention their backward production techniques and heavy pollution emission.

In a bid to reduce disorderly competition and pollution emitting, China's Ministry of Environmental Protection accelerates pollutants control and treatment for titanium dioxide industry.

Previously in November last year, an annual conference dedicated to drafting policies over pollution control and treatment for the titanium dioxide sector was convened. In the meeting, the draft was said to come out this year, which will speed up eliminating the sector's underdeveloped production capacity and boost its recovery.

According to the draft, requirements over clean production, air pollution control and prevention, water contamination control and treatment, solid waste treatment and comprehensive utilization are proposed.

Currently, China has mere more than 10 titanium dioxide producers whose production capacity runs over 100,000 tonnes each year and manufacturers with less than 50,000 tonnes annual capacity can produce nearly 500,000 tonnes of titanium dioxide annually. If these outdated production capacity is eliminated, the sector will see entire production capacity down 20 percent around and a better supply-and-demand structure.

All in all, the constant inventory digestion and production capacity integration will make titanium dioxide industry's profiting better than last year.

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