Resumen de Chinese TiO2: mixed signals amid a flight to overcapacity
Demand and supply grew further apart during the course of 2012, reflected by a significant build-up of inventories both by pigment producers, which, despite slowing production in the second half of the year, overproduced more than 100,000 tonnes, and by their distributors, which collectively held the equivalent of a medium line's production for an entire year. TiO 2 plants ended the year sitting on close to 12 weeks' inventory.
The areas presently account for an estimated one-third production, although there is no production in Hebei. At the same time, pigment plants in Sichuan and Yunnan are constructing close to 450,000 tonnes of additional capacity to be commissioned on or before 2015. This will bring capacity from its current 750,000 tonnes to almost 1.12m tonnes. A further 600,000 tonnes has been announced, of which approximately 150,000 tonnes is likely to go ahead.
Despite calls for further TiO 2 development, sulphate-processed TiO 2 belongs to the restricted category of industries, meaning it is tolerated, but not encouraged. The government is calling on plants below 50,000 tonnes to be shuttered and has forbidden the allocation of land for more greenfield sulphate plant construction. This is part of a general move to clean out small and environmentally unsound producers from the industry. But is has lit a fire under some TiO 2 producers who were hoping that a flight to overcapacity will save them.
