"United Mining and Chemical Company" | News | Merger of Chinese companies contribute to improvement of titanium dioxide market
Merger of Chinese companies contribute to improvement of titanium dioxide market
24.06.2015Chinese producers of titanium dioxide hope that interest existing at the market of titanium dioxide pigment caused by HenanBillionsChemicalsCo. and SichuanLomonTitaniumIndustryCo. merger will result in growth of investments in the branch. Officially closed operation valued at $1,47 billions ushered in a start of possible consolidation of Chinese titanium dioxide industry and, from hearsay, soon merger of JilinGproTitaniumIndustryCo. Ltd and JiangsuZhentaiChemicalCo. Ltd companies.
Other companies of the branch expressed openness to similar offers form their competitors. “We welcome companies intended to buy or invest in capital of our company”, - said Yon Van, a president of PanzhihuaYundaTitaniumCo. He is of the opinion that consolidation is unavoidable for Chinese industry of titanium dioxide production. And he is not alone. According to Chinese information sources, a few producers of titanium dioxide in Panzhihua province, including 4 private companies: XudongTitanium, YuanfengTitanium, YuantongTitanium and YundaTitanium, announced about share transfer, growth of capital and possibility of cooperation in a business.
World market of titanium dioxide was quickly expanded in 2008-2012 as prices of titanium dioxide pigment and raw materials for its production – ilmenite, rutile and leucoxene concentrates – were increased. This attracted investments and new projects to the sphere of titanium dioxide production. After 2012 prices of titanium dioxide, as well as of raw materials for its production, were reduced from $3705/ton to $1934/ton in 2014. A considerable imbalance between supplies and demand was a fundamental reason of titanium dioxide market decline. It’s estimated that annual Chinese capacity of titanium dioxide production was increased from 1,14 mil tons to 2,8 mil tons since 2006 till 2013. In Sichuan province, were the biggest enterprises of ilmenite concentrate production are located, the number of the local companies was increased from 10 to 20. The production capacity of the biggest of them such as SichuanLomon is up to 300 thousand tons of titanium dioxide per year, while capacity of the rest companies is not so big – around 100 thousand tons per year. Nowadays these small companies battle to survive. China is the biggest world producer and consumer of titanium dioxide but its production capacities are all over the territory and quality of the product is low. It is hoped that consolidation of Billions and Lomon companies will allow to establish price determination for high quality product and to increase export positions of China, taking into account that titanium dioxide market started recovering. Prices of titanium dioxide have been increased since end of 2014 and stayed at $2095/ton.