Leveraging Market Leverage to Promote Titanium Industry Upgrade

In 2007, at the National Titanium Dioxide Industry Conference held at the end of the year, a report revealed that China's titanium dioxide industry has experienced rapid growth since 1998. This period saw the emergence of well-known brands with strong market performance and the introduction of advanced production equipment and technologies, which have gradually been localized. As a result, the overall strength of the industry has significantly improved. However, despite this progress, the total production capacity and actual output have surged, leading to an oversupply in the market and fiercer competition. This situation is not favorable for the sustainable development of the sector. Bi Sheng, director of the National Titanium Dioxide Center under the Chemical Industry Productivity Promotion Center, emphasized the need for market-driven reorganization to promote industry consolidation and intensification. He suggested focusing on improving product quality and upgrading the entire titanium dioxide industry to ensure long-term stability. According to Bi Sheng, although China has held the second-largest production capacity globally for six years, the industry still faces challenges in raw materials, technology, and product structure. The lack of concentration in production capacity contrasts sharply with international standards. Globally, the top five producers account for over 76% of total capacity, while in China, the top five only make up 26.7%. This imbalance highlights the urgent need for restructuring and integration. Experts agree that aligning with global trends, increasing industrial concentration, and accelerating restructuring are essential for the future of the industry. Only by reaching a certain scale can companies enhance their risk resistance and lay the foundation for long-term development. Expanding through mergers and acquisitions, rather than just building new facilities, is seen as a more practical path. Yao Hengping, chairman of the Titanium Dioxide Branch of the China Coatings Industry Association, noted that recent years have seen significant progress in achieving scale, intensity, and higher concentration in the industry. For example, Panzhihua Steel has formed a large titanium industry group, and some enterprises in Guangxi have established high-capacity processing plants. In the future, companies in Shandong and the Yangtze River Delta may also pursue mergers and acquisitions to create larger, more efficient operations. Tang Zhenning, head of the National Titanium Dioxide Industry Center, pointed out that China’s current production process relies heavily on the sulfuric acid method, which is lengthy and causes serious environmental pollution. Most products are anatase type, which has inferior pigment properties and weather resistance compared to rutile. To catch up, the industry must shift toward high-value products such as chemical fiber-grade titanium dioxide, mica pearl titanium dioxide, food and pharmaceutical-grade titanium dioxide, catalysts, and high-purity white powder. Moreover, the industry is becoming more aware of the importance of product quality and consistency. Companies like Panzhihua Iron and Steel have partnered with research institutes to develop advanced technologies, while others have introduced high-grade production lines. Experts also emphasize the need for stable product performance to meet the requirements of downstream users. China possesses world-leading native titanium ore deposits, but the complexity of these minerals makes extraction and separation difficult. Most titanium is currently recovered from steel industry tailings. Experts suggest paying attention to the recovery of titanium from blast furnace slag, where up to 20-22% of titanium components remain unused. For instance, Panzhihua Iron and Steel generates millions of tons of slag annually, representing a significant loss of titanium dioxide. Bi Sheng believes that, similar to Panzhihua, the industry should focus on deep processing, including titanium slag, titanium dioxide, titanium tetrachloride, and titanium sponge. Combining cheap electricity with abundant resources could give China a competitive edge in producing acid-soluble titanium slag. This could eventually position Panzhihua as a major global titanium raw material base. As of 2007, there were 67 active titanium dioxide producers in China, with a total annual capacity of 1.15 million tons. Actual output reached about 860,000 tons, with non-pigment grade products accounting for over 50,000 tons. Several new projects were underway, adding 130,000 tons of new capacity that year. Despite two shutdowns due to environmental concerns, the industry continued to grow, showing both its potential and the need for better regulation.

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