China shuts down polluting TiO2 companies

China shuts down polluting TiO2 companies; drives prices up

By ALBERT LI
Published: Friday, 09 December 2016
Following pollution by local industries and a subsequent inspection by the municipal governmnet in Panzhihua, 28 companies have been shut down in the area. Among these were a number of TiO2 and ilmenite producers, which some said has led to spike in short term prices due the resulting market tightness.
The Provincial Bureau of Environmental Protection and the municipal government in Panzhihua, China have forced the shutdown of 28 companies in the province, including eight titanium dioxide (TiO₂) producers and a number of ilmenite producers, following a pollution inspection.
The inspection was prompted by a pollution incident in Panzhihua which was exposed by authorities on 2 December after several companies were found discharging waste water into the Jinsha River in the vicinity of a local vanadium and titanium high-tech industrial park.
Panzhihua is the main ilmenite and TiO₂-producing area in China. The area has an ilmenite capacity of around 4m tpa and its TiO₂ capacity accounts for over 15% of China’s production.
The production halt in the province at the start of December has tightened TiO₂ supply in the country, prompting producers in other locations to take advantage of limited supply and announce price hikes.
China’s largest TiO₂ producer, Henan Billions Chemicals has since announced a price increase on 6 December of Chinese renminbi (Rmb) 1,000 and $150/tonne for domestic and international customers respectively.
This is the 12^th price increase from leading Chinese producers such as Sichuan Lomon and Billions. Meanwhile ilmenite values have also jumped by over 100% to Rmb 1,000/tonne.
Although the limit on production has caused a short term spike in TiO₂ prices, in the long term supplier side reform and increasing environmental standards in China are expected to enable a continued upward trend in prices.
Currently only Pan Steel and Oriental Titanium are still in production in Panzhihua and only five companies are producing ilmenite, including Pan Steel and Lomon, while other producers await approval for production.
Companies are expected to be able to start transporting material again from 9 December and polluting companies will be able to apply for re-evaluation by local authorities in mid-December.
China has been increasing its presence on the world TiO₂ stage as the Chinese government has continued to drive regulation to support pigment industry consolidation and encourage the development of higher-quality and less polluting chloride-route output.
Total exports for the year between January and October increased to 595,221 tonnes up from 438,160 tonnes in 2015. While pigment prices have struggled and began the year at low levels, the value of material exported in October totalled $100m, marking a 10% increase in the average sale price to around $1,831/tonne.