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Production and Market of Pigment in China-2006

Production and Market of Pigment in China-2006

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Published by CCM Intelligence
As a key chemical product, pigment is widely applied to coating, ink, plastic, construction materials, paper making, rubber, chemical fiber, cosmetic industries etc., and it is closely related to national economy development and people’s life. In this report, CCM penetrates the major types of pigment in China, including titanium dioxide, iron oxide, lithopone, other inorganic pigment and organic pigment from aspects of production, technology, import&export,consumption, prospect,etc.

Currently, China has become the biggest pigment manufacturer and main consumer in the world. Output of iron oxide, lithopone and organic pigment ranks the first in the world; titanium dioxide ranks the second in the world. Meanwhile, China is the only lithopone manufacturer in the world. However, Chinese pigment highly depends on overseas market and export proportion constituted around 45.9% of total output in 2007. On the other hand, because of shortage of high-grade pigment products, China has to import large quantities of pigment every year.

In 2008, factors including export drawback, increasingly strict environmental protection policy, price hike of raw material and RMB appreciation etc. are influencing the production and export of pigment in China, which has impacted on domestic manufacturers in profit consequently.

What's the present situation of production and manufacturers of pigment in China? What's the current price situation and the factors behind the price movement in China? How do the factors influence the import and export of pigment in China? What factors influence the development of pigment in China? The report will convey the answers.
As a key chemical product, pigment is widely applied to coating, ink, plastic, construction materials, paper making, rubber, chemical fiber, cosmetic industries etc., and it is closely related to national economy development and people’s life. In this report, CCM penetrates the major types of pigment in China, including titanium dioxide, iron oxide, lithopone, other inorganic pigment and organic pigment from aspects of production, technology, import&export,consumption, prospect,etc.

Currently, China has become the biggest pigment manufacturer and main consumer in the world. Output of iron oxide, lithopone and organic pigment ranks the first in the world; titanium dioxide ranks the second in the world. Meanwhile, China is the only lithopone manufacturer in the world. However, Chinese pigment highly depends on overseas market and export proportion constituted around 45.9% of total output in 2007. On the other hand, because of shortage of high-grade pigment products, China has to import large quantities of pigment every year.

In 2008, factors including export drawback, increasingly strict environmental protection policy, price hike of raw material and RMB appreciation etc. are influencing the production and export of pigment in China, which has impacted on domestic manufacturers in profit consequently.

What's the present situation of production and manufacturers of pigment in China? What's the current price situation and the factors behind the price movement in China? How do the factors influence the import and export of pigment in China? What factors influence the development of pigment in China? The report will convey the answers.

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Sections

  • Introduction & methodologies
  • I Production and market information
  • I-1 History of pigment industry in China
  • I-2 Classification of pigment in China
  • I-2.1 Inorganic pigment
  • I-2.2 Organic pigment
  • I-2.3 Classification in this report
  • I-3 Current production situation of pigment in China
  • I-3.1 Summary of production
  • I-3.2 Introduction to major pigments in China
  • I-3.2.1 Titanium dioxide
  • - Characters of Chinese titanium dioxide industry
  • - Supplying situation of raw materials
  • - Manufacturers of titanium dioxide
  • - Historical development of iron oxide industry
  • - Production situation of iron oxide pigment
  • - Introduction to manufacturers of iron oxide
  • I-3.2.3 Lithopone
  • - Historical development of lithopone industry
  • - Current production situation of lithopone
  • - Manufacturers of lithopone
  • I-3.2.4 Chrome pigment
  • I-3.2.5 Organic pigment
  • - Historical development of organic pigment
  • - Current production situation of organic pigment
  • - Manufacturers of organic pigment
  • I-3.3 List of pigment manufacturers in China
  • I-4 Price analysis of pigment in China
  • I-5 Import and export situation of pigment in China
  • I-5.1 Titanium pigment
  • I-5.3 Lithopone
  • I-5.4 Chrome pigment
  • I-5.5 Organic pigment
  • I-6 Competitiveness of Chinese pigment industry
  • I-7 Consumption situation of pigment in China
  • I-7.1 Summary of consumption
  • I-7.2 Introduction to consumption situation of each pigment
  • I-7.2.1 Consumption situation of titanium pigment in China
  • I-7.2.2 Consumption situation of iron oxide pigment in China
  • I-7.2.3 Consumption situation of lithopone in China
  • I-7.2.4 Consumption situation of chrome pigments in China
  • I-7.2.5 Consumption situation of organic pigment in China
  • I-7.3 List of major end users
  • I-8 Problems existing in pigment industry
  • I-9 Governmental policies about pigment industry and their influence
  • I-10 Future forecast on pigment industry in the next five years
  • I-10.1 General situation of Chinese pigment industry in the future
  • I-10.2 Future development of titanium pigment in China
  • I-10.3 Future development of iron oxide pigment in China

Production and Market of Pigment in

China
- A Preliminary Survey

August 2006
















Researched & Prepared by:

Guangzhou CCM Chemicals Co., Ltd.
Guangzhou, P. R. China


Copyright by Guangzhou CCM Chemicals Co., Ltd. (P. R. China)
Any publication, distribution or copying of the content in this report is
prohibited.
Website: www.cnchemicals.com
Tel: +86-20-3876 8926
Fax: +86-20-3876 8956

1

Production and market of pigment in China
Part Content Page
Executive summary 4
Introduction & methodologies 8
I Production and market information 11
I-1 History of pigment industry in China 11
I-2 Classification of pigment in China 12
I-2.1 Inorganic pigment 12
I-2.2 Organic pigment 13
I-2.3 Classification in this report 13
I-3 Current production situation of pigment in China 14
I-3.1 Summary of production 14
I-3.2 Introduction to major pigment in China 16
1-3.2.1 Titanium dioxide 16
- Historical development of titanium dioxide industry 16
- Characters of Chinese titanium dioxide industry 18
- Supplying situation of raw material 21
- Manufacturers of titanium dioxide 22
1-3.2.2 Iron oxide 23
- Historical development of iron oxide industry 23
- Production situation of iron oxide 23
- Introduction to manufacturers of iron oxide 27
1-3.2.3 Lithopone 29
- Historical development of lithopone industry 29
- Current production situation of lithopone 29
- Manufacturers of lithopone 30
1-3.2.4 Chrome pigment 31
1-3.2.5 Organic pigment 33
- Historical development of organic pigment 33
- Current production situation of organic pigment 34
- Manufacturers of organic pigment 35
I-3.3 List of pigment manufacturers in China 37
I-4 Pricing analysis of pigment in China 39
I-5 Import and Export situation of pigment in China 46
I-5.1 Titanium pigment 46
1-5.2 Iron oxide 53
I-5.3 Lithopone 64
I-5.4 Chrome pigment 66
I-5.5 Organic pigment 69
I-6 Competitiveness of Chinese pigment industry 73
I-7 Consumption situation of pigment in China 74
I-7.1 Summary of consumption 74
I-7.2 Introduction to consumption situation of each pigment 75
2
I-7.2.1 Consumption situation of titanium pigment in China 75
I-7.2.2 Consumption situation of iron oxide in China 82
I-7.2.3 Consumption situation of lithopone in China 87
I-7.2.4 Consumption situation of chrome pigment in China 88
I-7.2.5 Consumption situation of organic pigment in China 89
I-7.3 List of major end users 90
I-8 Problems existing in pigment industry 91
I-9 Governmental policies about pigment industry and their influence 92
I-10 Future forecast on pigment industry in the next five years 94
I-10.1 General situation of Chinese pigment industry in the future 94
I-10.2 Future development of titanium pigment in China 95
I-10.3 Future development of iron oxide in China 97
I-10.4 Future development of other major pigments in China 98
I-11 Commercial opportunities of pigment in China 101
II Appendix 103
II-1 Profile of top 30 pigment producers in China 103
II-1.1 Jiangsu Tianpeng Chemicals (Group) Co., Ltd. 103
II-1.2 Jiangsu Yixing City Yuxing Pigment Factory 103
II-1.3 Guangzhou Huali-Sachtleben Chemical Co., Ltd. 104
II-1.4 Guangdong Sanshui T&H Glaze Co., Ltd. 105
II-1.5 Shandong Dongjia Group Co., Ltd. 106
II-1.6 CNNC Huayuan Titanium Dioxide Co., Ltd. 107
II-1.7 Zhejiang Deqing Hua Yuan Pigment Co., Ltd. 108
II-1.8 Sichuan Lomon Corporation 109
II-1.9 Jiangsu Taibai Group Zhenjiang Titanium Dioxide Joint-stock Co., Ltd. 110
II-1.10 Pan Gang Group Chongqing Titanium Industry Co., Ltd. 111
II-1.11 Shanghai Yipin Pigments Co., Ltd. 112
II-1.12 Hebei Yuhuan Chemical Industry Co., Ltd. 113
II-1.13 Hunan Three-Ring Pigments Co., Ltd. 113
II-1.14 Shandong Jinan Yuxing Chemical Industry Co., Ltd. 114
II-1.15 Jiangsu Changzhou North American Chemical Group Co., Ltd. 115
II-1.16 Anhui Tongling Annada Titanium Dioxide Co., Ltd. 116
II-1.17 Guangxi Cangwu Shunfeng Titanium Dioxide Co., Ltd. 116
II-1.18 Shenzhen Elementis Pigment & Chemical Co., Ltd. 117
II-1.19
Hunan Xiangtan Niutou Chemical Co., Ltd.
118
II-1.20
Hunan Changsha Fengchao Pigment Chemical Co., Ltd.
119
II-1.21 Hebei Xuri Chemical Co., Ltd. 120
II-1.22 Yunnan Dahutong Industry&Trading Co., Ltd. 121
II-1.23 Shanghai Jinghua Chemical Co., Ltd. 122
II-1.24 Nanjing Titanium Dioxide Chemical Co., Ltd. 123
II-1.25 Hunan Hengyang Meilun Pigmental Chemical Co., Ltd. 124
II-1.26 Guangxi Pinggui PGMA Co., Ltd. 125
II-1.27 Henan Billions Chemicals Co., Ltd. 127
II-1.28 Hunan Jintian Fertilizers and Chemical Engineering Co., Ltd. 128
3
II-1.29 Hebei Yongming Lithopone Factory 129
II-1.30 Zhejiang Hangzhou Baihe Chemical Co., Ltd. 129
II-2 Profile of top 30 pigment end users in China 131
II-2.1
Nippon Paint Co., Ltd.
131
II-2.2 Beijing Meichao Finishing Material Co., Ltd. 132
II-2.3 Guangdong Huarun Paints Holdings Co., Ltd. 132
II-2.4 Shandong Lehua Group Co., Ltd. 133
II-2.5 Shanghai ICI Swire Paints (Shanghai) Co., Ltd. 135
II-2.6 Hong Kong Hempel-Hai Hong (China) Ltd. 136
II-2.7 Shandong Changyu Group Co., Ltd. 137
II-2.8 Shanghai Coatings Co., Ltd. 138
II-2.9 Shanghai Cosco Kansai Paint Co., Ltd. 138
II-2.10 Chongqing Hongqi Paints Co., Ltd. 139
II-2.11 Changzhou Guanghui Chemical Co., Ltd. 140
II-2.12 GuangDong Maydos Chemical Group 141
II-2.13 Hunan Xiangjiang paint Group Co., Ltd. 142
II-2.14 Tianjin Toyo Ink Co., Ltd. 143
II-2.15 Hangzhou TOKA Ink Chemical Co., Ltd. 144
II-2.16 Shanxi Taiyuan Coates Lorilleux Chemicals Ltd. 145
II-2.17 Zhejiang Yongzai Chemical Industry Co., Ltd. 146
II-2.18 Shanghai Peony Printing Ink Co., Ltd. 146
II-2.19 Yip's Ink (Zhongshan) Ltd. 147
II-2.20 Shanghai DIC Ink Co., Ltd. 148
II-2.21 Anhui Wuhu Conch Profiles and Science Co., Ltd. 149
II-2.22
Dalian Shide Plastics Industry Co., Ltd.
150
II-2.23 Liaoning Zhongwang Group 151
II-2.24 Koemmerling (Tianjin) High Polymer Molding Co., Ltd. 153
II-2.25 Shandong Chenming Paper Industry Group 154
II-2.26 Shandong Huatai Group Co., Ltd. 155
II-2.27 Golden East Paper (Jiangsu) Co., Ltd. 156
II-2.28 Shandong Sun Paper Industry Joint Stock Co., Ltd. 156
II-2.29
ShangHai YiHua Rubber Products Factory
157
II-2.30 Hebei North China Rubber Factory 158
4
Executive summary

Chinese pigment industry develops rapidly in recent years, with the average annual growth
rate of output being 21% in 2002~2005. Nowadays, China has become one of major
production countries of pigment in the world, with the capacity of 2,260kt/a. Current statistic
shows that there are about 350 manufacturers of pigment in China, and they totally produced
1,868 kilo tonnes of pigments in 2005, of which 1,711kt were inorganic pigments, accounting
for 91.6% of total output.

Pigment production in China concentraes on East China and Central South China. In 2005,
East China had the largest output of pigment, reaching 896.6kt and accounting for 48 percent
of the national output. Central South China was the second biggest production area of pigment,
where the output in 2005 was 691.2kt, 37% of national output; and the respective output share
of the other areas is smaller than 10%. In 2005, the top three provinces of pigment production
were Jiangsu, Guangdong and Zhejiang, respectively.

In last year, the apparent consumption volume of pigments in China reached 1579,436 tonnes,
of which 1506,300 tonnes are inorganic pigment and only 73,136 tonnes are organic pigment.
This situation was just like the consumption structure of pigment all over the world.

Pigment is chiefly consumed in coatings, plastic, ink, paper making and rubber industries,
which totally consumed 82.4% of pigment in 2005. Coatings industry was the biggest
consumer of pigment, occupying 51.2% of total consumption.

Chinese pigment highly depends on overseas markets. The annual export proportion of
Chinese pigment was generally beyond 35%, even reaching 40% in 2005. At the same time,
because of the shortage of high-class products, China has to import large quantities of
pigment every year. For instance, China imported 470 kilo tonnes of pigments in 2005, of
which a majority were high-class products.

Table I Basic information of Chinese pigment industry in 2005
Category Producers
Capacity
(t/a) Output (t)
Import
(t)
Export
(t)
Apparent
consumption(t)
Titanium dioxide 60 750,000 682,000 227,736 157,425 752,311
Iron oxide 140 800,000 622,700 197,324 329,433 490,591
Lithopone 14 340,000 250,000 0 80,000 170,000
Chrome pigment 16 40,000 36,600 2,916 15,511 24,005
Others 20 150,000 120,000 10,952 61,631 69,321
I
n
o
r
g
a
n
i
c

p
i
g
m
e
n
t

Sub-total 250 2,080,000 1,711,300 438,928 644,000 1,506,228
Organic pigment 100 180,000 156,585 31,215 114,664 73,136
Total 350 2,260,000 1,867,885 470,143 758,664 1,579,364

Along with the swift development of downstream industries such as coatings, plastic, ink,
paper making and rubber industries, Chinese pigment industry will keep rapid development in
5
-
500
1,000
1,500
2,000
2,500
3,000
O
u
t
p
u
t
/
k
t
2006 2007 2008 2009 2010
Inorganic pigments Organic pigments
the future. Compared with the international market, Chinese market is more attractive to those
large multinational pigment manufacturers who are transferring more capacity of pigment to
China. China is turning to be a global production center and crucial sales market of pigment.

In the future, export of Chinese pigment will also keep a mighty increment.

The output of inorganic pigment in China will increase with the CAGR of 10% in the coming
five years, and to 2010, the total output will be about 2,540 kilo tonnes. Meanwhile, the output
of organic pigment will also increased with an average growth rate of 12%, reaching 276kt in
2010. Here is the future production situation of pigment in China in the future.

Figure I Output of pigment in China in the coming five years












Titanium pigment

In 2001~2005, China’s titanium dioxide industry kept growing rapidly, both the capacity and
output increased by leaps and bounds although the growth rate was not higher than that
during the “Ninth Five-year Plan”. In 2005, titanium dioxide produced by Chinese enterprises
amounted to 682kt with the contribution rate to global market being 14.9%.

Titanium pigment of China presents the following characters: i) With rapid development in the
past, both production and consumption increased explosively. ii) Production scale of enterprise
keeps enlarging, and the industry is tending towards production intensification. iii) Compared
with oversea enterprises, Chinese titanium dioxide enterprises have undeveloped
technologies, worse quality products and fewer specifications. iv) The pressure of
environmental protection becomes heavier.

Chinese titanium pigment is entering in the international market. In 2005, the import of titanium
pigment uncommonly presented a decreasing trend opposite to the situation in the past years.
While the export volume in 2005 increased 67.1% over that in 2004.

Iron oxide pigment

6
As the top color pigment, iron oxide pigment industry in China has a history of over 40 years.
Iron oxide pigment include iron oxide red, iron oxide yellow, iron oxide black and so on. China
is the largest producer of iron oxide pigment in the world with a production capacity above
800,000t/a. The output in 2005 reached 622,700t accounting for half of the world.

In the iron oxide pigment family, iron oxide red and iron oxide yellow are the key members. The
total output of these two kinds of pigment in 2005 takes about 77% of the total output of iron
oxide pigment.

In terms of regional distribution, iron oxide production concentrates in Shandong Province and
Hebei Province in the north, Jiangsu Province, Zhejiang Province and Shanghai City in
Yangtze River Delta, and Fujian Province and Guangdong Province in the north.

There are about 140 manufacturers producing iron oxide pigment in China. Among all
manufacturers, the top ten have an annual production capacity of 377,000 t/a, accounting for
about 40% of the national capacity. Jiangsu Yixing Yuxing Pigment Factory is the largest
manufacturer and the only one having the capacity above 100,000t/a in China.

The price of iron oxide pigment kept going up from 2003 to the beginning of 2006 because of
the cost rise of raw materials, energy and son on. In 2006, the price turns to be stable.

Import and export of iron oxide pigment in China are both increased recently. However,
Chinese iron oxide industry generally depends on export, and 2/3 of iron oxide pigment in the
international market is from China. 329,433t iron oxide pigment, more than half of the output is
exported in 2005 with a growth rate of 5.4% from 2004.

North America is the largest destination where China exported 124,293t iron oxide pigment to
in 2005. Other export destinations are Europe, Southeast Asian and Middle East including
Spain, UK, Germany and Canada and so on.

Apparent consumption of iron oxide in 2005 reached 490,591t. Generally, iron oxide pigment is
mainly consumed in these fields including architectural materials (construction), coatings and
paint, rubber and plastic and paper-making. Coatings & paint and architectural materials are
the major application fields.

Other pigment

At present, China is the unique producing country of lithopone in the world. In 2005, China
produced 250 kilo tonnes of lithopone, of which 80kt were exported. Influenced by titanium
pigment with better performance, lithopone industry of China runs hard and the profit level is
very low. The output of lithopone will gradually decrease with an average annual growth rate of
-5% in the coming five years.

China is the largest producer of chrome pigments in the world. The current capacity is 40kt/a,
accounting for 40% of global capacity. Because of the rapid development of ink, coatings and
7
plastic fields both at home and abroad, to 2010, the output of chrome pigments in China will
reach 55,000 tonnes.

China is the largest producer of organic pigment in the world with the output being 156,585
tonnes in 2005, 39.9% of the global output. However, the sales value in China only accounted
for 20% of the global one. In the coming several years, the output of organic pigments in China
will increase with the annual growth rate higher than 10%.

8
Introduction & methodologies

‹ Introduction

The report looks at the situation of Chinese pigment industry in the past, at present and in the
future. The primary purpose of this report is to disclose the market info of Chinese pigment
industry.

This report was formulated in September 2006. The data for 2006 and before are based on
CCM’s database and other various sources as mentioned in the section on methodology
below.

‹ Methodology

This report is based on a detailed interviewing program, supported by an extensive program of
desk research including comprehensive searches of CCM’s database, searches of a wide
variety of publications, internet site worldwide. Wherever possible, information published by
August 2006 has been incorporated in the report.

- Telephone Interviews

When necessary, CCM carried out in-depth telephone interviews with pigment producers,
some researchers, and a part of pigment exporters.

- Desk research

The sources of desk research are various including published magazines, journals,
government statistics, industrial statistics, customs statistics, association seminars as well as
information from the Internet. A lot of work went into compiling and analyzing the information
obtained. When necessary, checks were made with the Chinese suppliers regarding market
information such as technology, production, pricing, etc.

- Data processing and presentation

The data from verified information, telephone interviews, the secondary data from all of the
publication and site visit information have been combined to make this report as precise and
scientific as possible. Throughout the process, a series of internal discussions took place in
order to analyze the data and draw conclusions from it.

- Forecast

Based on many macro factors, such as GDP, living standard, and development of related
industry, CCM estimated the future market of related industries from 2006 to 2010.

‹ List definition

9
- CAGR: Compound Annual Growth Rate

- Apparent consumption

Apparent consumption equals production + import – export. It is one of the factors reflecting
demand, which excludes quantities in storage from the apparent consumption. This report
assumes that superficial consumption equates to actual consumption, and therefore demand.

- Foreign/overseas

Anything or any activity pertaining to individuals/units coming from territories outside the
mainland, People’s Republic of China (e.g. foreign company refers to a company located in a
country outside mainland China).

- Ownership

Ownership of enterprises can be classified as follows:

State-owned The whole factory/company is financed and owned by the local/central
government.

Private The whole factory/company is financed and owned by an individual person. The owner
has the right to manage the factory/company.

Stock The company is managed in the same way as a stock company. It may/may not be
listed on the stock market. Yet the management system must comply with the rules governing
stock companies.

Joint venture An entity invested in jointly by a foreign company and a Chinese company. The
two or more cooperating partners share the profit. The Chinese partner may be an individual or
a state-owned unit.

Wholly foreign owned The owner of the company is an individual/unit coming from outside
mainland China.

Throughout this report, data is classified under two kinds of ownership.
¾ Domestic companies
¾ Foreign involvement companies

When necessary the foreign involvement companies are further classified into two types:
¾ Wholly foreign-owned companies
¾ Joint ventures (JVs)

Taking account of the origin of the products/goods, those made by the overseas companies
are also included. In this case we attribute the products/goods to imported material, i.e. the
material is made in countries outside the People’s Republic of China.
10

- Region in China

Region Province and city
East China Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Shandong
South central China Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan
North China Beijing, Tianjin, Shanxi, Hebei, Inner Mongolia
Southwest Chongqing, Sichuan, Guizhou, Yunnan, Xizang
Northeast Liaoning, Jilin, Heilongjiang
Northwest Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang

- Unit

¾ From 1949 to 2005: $1=RMB8.24
¾ Since 2006: $1=RMB8.00
¾ RMB: currency unit in China, also called Yuan
¾ Tonne: ton, equals to metric ton in this report
¾ Kilo tonne: equals to kilo metric ton, or 1,000 tonnes, or kt.
¾ t/a: tonne/annual or tonne/year
¾ /t: per tonne

11
I Production and market information

I-1 History of pigment industry in China

¾ Development of pigment in the world

Thousands of years ago some old inorganic pigment such as red lead, mercury sulphide, flake
white, Egyptian blue, iron red, carbon black, etc, were used. The commercial processing of
inorganic pigment began in 1704 with the production of iron oxide blue. Traditional processes
of industrially producing zinc oxide, lead chromate yellow, etc appeared during the early 30
years in the 19th

century. Lithopone was put into commercial production in 1874. And the first
titanium dioxide plant was built in 1916. Since then, inorganic pigment] developed fast in the
world. In 2005 the output of global inorganic pigment] reached 6 million tonnes.

The earliest organic pigment was a kind of infusibility lakes, which was produced by treating
mordant dye extracted from plant with metal salt. The development of organic pigment] can be
divided into three stages:
— The first is the basic chromatogram matching stage during which lithol red was
synthesized in 1899 and phthalocyanine green was synthesized in 1938.
— Polymer materials developed fast after 1954, and species with good heat resistance,
light-fastness, etc was developed.
— Since the 1970s, new specifications and structures of organic pigments were developed
less and less. The organic pigments industry in the world turned to focus on developing
new synthesis technologies, reducing waste, cutting the cost, improving the yield and
quality, researching the superficial treatment of pigment, exploring new pigment
medicament form or special medicament form and so on.

In 1982 the output of organic pigment in the world was about 250,000 tonnes, and it reached
390,000 tonnes in 2005.

¾ Development of pigment in China

The initial step of Chinese pigment industry began much later than that in the world.

Before 1949, inorganic pigment in China included iron blue, chrome yellow, red lead, yellow
lead, etc. Production technology at that time lagged behind, and the output was small.

Since the 1950s Chinese inorganic pigment industry developed fast, more breeds were
developed, the output increased, and the quality improved a lot.

In the 1960s some modern manufacturers with a certain scale were established to produce
titanium dioxide, zinc oxide, iron oxide, lithopone, red lead, chrome yellow, Chinese blue etc.

The output of inorganic pigment in China in 1980 reached 204,200 tonnes, only accounting for
5.6% of the world.
12

Since the 1900s inorganic pigment in China developed rapidly and the national output reached
742,200 tonnes in 1995, among which lithopone possessed the largest share.

Table I-1-1 Production structure of inorganic pigment in China in 1995 (Unit: t)
Species Output Species Output
Lithopone 21,470 Yellow lead 4,980
Iron oxide red 10,350 Red lead 3,030
Iron oxide yellow 3,360 Chrome pigments 1,600
Iron oxide black 980 Other inorganic pigments 7,950
Titanium dioxide 12,180 Silver powder 1,010
Zinc oxide 7,300 Total 74,220

In recent years, inorganic pigments industry in China keeps growing at a high speed. The
output in 2005 was up to 1,700kt from 950kt in 2002 with the average annual growth rate of
21.4%. The apparent consumption reached 1,500kt in 2005 from 980kt in 2002 with the
average annual growth rate of 15.1%.

Since the 1980s organic pigment also developed fast in China, and China is a large producer
of organic pigment in the world today. Its output accounted for about 40% of the world in 2005,
while the rate in 1982 was only 1.2%.

I-2 Classification of pigment in China

There are many approaches to classify pigment:

¾ According to chemical component, pigment could be classified into inorganic pigment and
organic one.
¾ According to its processes, pigment could be classified into natural pigment and synthetic
one. Most kinds of natural pigment are made from mineral, and only a few are made from
biologic products. Synthetic pigment is synthesized through chemical reaction.

I-2.1 Inorganic pigment

According to chemical component, inorganic pigment can be classified into the following
categories:
9 Titanium pigment
9 Iron pigment
9 Chrome pigment
9 Lead pigment
9 Zinc pigment
9 Metal pigment
9 Others

13
According to chemical species, inorganic pigment can be classified into the following
categories:
9 Oxide pigment
9 Chromate pigment
9 Sulphate pigment
9 Hydrate pigment
9 Sulfide pigment
9 Metal pigment
9 Others

According to color, inorganic pigment can be classified as follows:
9 White pigment
9 Black pigment
9 Yellow pigment
9 Red pigment
9 Green pigment
9 Blue pigment
9 Others

According to usage and function, inorganic pigment can be classified:
9 Pigment for coatings
9 Pigment for ink
9 Pigment for plastic
9 Pigment for rubber
9 Inert pigment
9 Pearlescent pigment
9 Inhibitive pigment
9 Others

I-2.2 Organic pigment

According to chemical structure, organic pigment can be classified into the following
categories:
9 Azo pigment
9 Phthalocyanine pigment
9 Ketone containing condensed rings
9 Others

I-2.3 Classification in this report

CCM takes on a simple classification method. In this report CCM will introduce pigment
industry in China by classifying sections of titanium dioxide, iron oxide, and lithopone, other
inorganic pigment, organic pigment etc.
14
East China
48.0%
South central
China
37.0%
North China
9.0%
Southwest
5.7%
Northeast
0.2%
Northwest
0.1%
I-3 Current production situation of pigment in China

I-3.1 Summary of production

As one of the main countries producing and consuming pigment especially inorganic one,
China is the unique producer of lithopone. As for organic pigment the current annual output of
China accounts for about 40 percent of global output. At present, there are over 370 pigment
manufacturers in China with the total capacity of 2,260kt/a, of which 2,080kt/a are for inorganic
pigment, accounting for 92 percent of total pigment capacity. The capacity of organic pigment
is only 180kt/a.

Statistics showed that the total output of pigment in China in 2005 was 1,868kt (including 1,711
kilo tonnes of inorganic pigment and 157 kilo tonnes of organic pigment) with a year-on-year
increment of 18.2%. The pigment production in China focuses on East China and Central
South China. In 2005, East China had the largest output, reaching 896.6kt and accounting for
48 percent of the national output. Central South China was the second with the output in 2005
of 691.2kt, accounting for 37% of national output. The following production bases were orderly
North China and Southwest China. Each output of pigment in Northeast and Northwest was
less than 10kt, being a very small proportion of the countrywide output.

In 2005, the top three provinces of pigment production were Jiangsu (398.6kt), Guangdong
(244.7kt), Zhejiang (233.5kt), and the following provinces were Hunan, Guangxi, Hebei,
Shanghai, Shandong, Chongqing and Henan. The order was basically the same to that in
2004.

The geographical distribution of pigment output and the order of province or city in 2005 are
shown in the Figure I-3.1-1 and Figure I-3.1-2. Demand and supply situation of pigment in
China in 2005 is shown in Table I-3.1-1.

Figure I-3.1-1 Geographical distribution of pigment output in China in 2005
















15
398.6
244.7
233.5
206.8
141.8
132.5
108.0
79.4
56.7
56.1
0 50 100 150 200 250 300 350 400 450
Jiangsu
Guangdong
Zhejiang
Hunan
Guangxi
Hebei
Shanghai
Shandong
Chongqing
Henan
Output/kt
Figure I-3.1-2 Top 10 provinces and cities of pigment output in China in 2005











Table I-3.1-1 Demand and supply situation of pigment in China in 2005
Items
Pigments
in 2005
Pigments
in 2004
Year-on-year
increment
Inorganic
pigments in
2005
Organic
pigments in
2005
Output/kt 1,868 1,580 18.2% 1,711 157
Import/kt 470 440 6.8% 439 31
Export/kt 759 538 41.1% 644 115
Apparent consumption/kt 1,579 1,482 6.5% 1,506 73
Market share of
home-made products 70.2% 70.3% - 70.8% 57.5%
Market share of imported
products 29.8% 29.7% - 29.2% 42.5%
Output/consumption 118.3% 106.6% 11.0% 113.6% 215.1%

16
I-3.2 Introduction to major pigments in China

z Inorganic pigment

At present, there are about 250 active manufacturers of inorganic pigment in China, with the
total capacity of 2,080kt/a and an average capacity of 8,320t/a. The output of inorganic
pigment in 2005 was 1,711,300 tonnes, accounting for 91.6% of gross output of pigment in
China. The operating rate of titanium dioxide industry was 82.3% in last year. In 2005, the
import and export volume of inorganic pigment was 439kt, 644kt, respectively, and the
apparent consumption was 1506.3kt, increasing by 7% over that in 2004. Among inorganic
pigment, titanium dioxide, iron oxide and lithopone are the major categories and their
proportions of output in 2005 were titanium dioxide 39.9%, iron oxide 36.4% and lithopone
14.6%. At the same time, Chrome series occupied 2.1% of the total output of inorganic
pigment. The production and sales situation of major inorganic pigment in China in 2005 was
listed in Table I-3.2-1.

Table I-3.2-1 Production and sales situation of major inorganic pigment in China in 2005
Item Titanium
dioxide
Lithopone Iron
oxide
Chrome
series
Total in
2005
Total in
2004
Capacity (kt/a) 750 340 800 40 1,890 1,638
Producers 60 14 140 16 230 251
Average capacity (t/a) 12,500 24,286 5,714 2,500 8,217 6,525
Output (kt) 682 250 623 37 1,592 1,361
Operation rate 91% 74% 78% 93% 84% 83%
Proportion of output 39.9% 14.6% 36.4% 2.1% 93% 94.7%
Sales volume(kt) N/A 247.5 567.0 36.6 N/A 1,389
Sale/production N/A 99% 91% 99% N/A 98%
Import/t 227,736 0 197,324 2,916 427,976 452,648
Import price (USD/t) 1,835 N/A 416 3,226 N/A N/A
Export/t 157,425 80,000 329,433 15,511 582,369 499,338
Export price (USD/t) 1,321 369 517 2,096 N/A N/A
Import price/export price 1.4 N/A - 0.82 1.5 N/A N/A
Apparent consumption/kt 752 170 491 24 1,437 1,261
Global consumption/kt 4,589 250 1,200 100 6,139 5,997
Consumption proportion in global
market
16.4% 68.0% 40.9% 24.0% 23.4% 21%
Contribution rate for global market 14.9% 100% 51.9% 37% 25.9% 22%

I-3.2.1 Titanium dioxide

- Historical development of titanium dioxide industry

Among inorganic pigment, the most important category is white covering type pigment in which
titanium dioxide takes the key position.

17
In the world
At present, the global capacity of titanium dioxide is about 4,700kt/a, of which 1,620kt/a is in
North America, and 70kt/a in South America, 1,375kt/a in West Europe, 239kt/a in East Europe
a, 135kt/a in Africa and the Middle East, 829kt/a in the Asia-Pacific, 352kt/a in other regions.

The top six producers of titanium dioxide in the world are all multinational corporations,
moreover, five of them are in USA. Here is the brief introduction of them:
No.1 Dupont of the United States: The corporation has five plants which are located in USA,
Mexico and Taiwan of China. The total capacity reaches 1000kt/a.

No.2 Millennium of the United States: The corporation has eight plants which are located in
USA, England, Australia, France and Brazil. The total capacity is 720kt/a.

No.3 Ken-mcgee of the United States: The corporation has six plants which are located in USA,
Netherlands, Germany, Belgium, Australia and Saudi Arabia. The total capacity is 600kt/a.

No.4 Huntsman of the United States: The corporation has eight plants which are located in
USA, England, France, Italy, Spain, South Africa and Malaysia. The total capacity is 576kt/a.

No.5 NL (National Lead) of the United States: It is Kronos Corporation, one of NL’s subsidiaries
in Germany, who produces titanium dioxide. Kronos has six plants with the total capacity of
430kt/a. The plants are located in USA, Canada, Belgium, Germany and Norway.

No.6 ISK of Japan: The corporation has four plants which are located in Japan, Singapore and
Taiwan of China, respectively. The total capacity is 220kt/a.

In general, other manufacturers in the world are regional producers of titanium dioxide.

Obviously, the United States is the largest producer of titanium dioxide in the world. It has the
capacity of more than 3,300kt/a.

In China
Titanium dioxide industry of China owns a short history. Chinese organizations did not
research the production technology of titanium dioxide until 1954. In the 1950s, some small
titanium dioxide factories were established in Shanghai, Guangzhou, Tianjin, Jinan, Liaoyang,
Wuxi, etc, and the products were mainly used in porcelain enamel and electric welding rod.
At that time, all titanium dioxide were not pigment grade products. During 1962~1963, Tianjin
Chemical Academy scaled up its experiment about the preparation of Titanium Dioxide
Anatase, and established pilot equipment in chemical plants of Shanghai and Tianjin. The
achievement of Tianjin Chemical Academy passed the authentication of State Ministry of
Chemical Industry. Furthermore, it laid a foundation for the production of Titanium Dioxide
Anatase by Sulfuric Acid Method in China.

Since the late 1980s, China started to import oversea technologies into titanium dioxide
production. For example, the former No.404 Factory of Ministry of Nuclear Industry (current
CNNC Huayuan Titanium Dioxide Co., Ltd.) established a Sulfuric-Acid-Method titanium
18
pigment factory with the capacity of 15kt/a in 1993 by purchasing technologies of former
Jugoslavia and Czech Republic. The former Chongqing Yugang Titanium Dioxide Co., Ltd.,
(current Pan Yu Tai Ye) established a Sulfuric-Acid-Method titanium pigment factory with the
capacity of 15kt/a in 1995 by purchasing technologies of Poland. The former Liaoning Jinzhou
Ferroalloy Factory (current Pan Jin Tai Ye) also imported a part of technologies and equipment
and established a Chlorination-Method titanium pigment factory in the end of 1994. At the
same time, other old Sulfuric-Acid-Method factories also imported software and equipment for
technical reform, by which both quality and production level were improved remarkably.

As a kind of important inorganic pigment, titanium dioxide occupied half of the consumption of
inorganic pigment in China. In 2005, the capacity and output of titanium dioxide was 750kt/a,
682kt, respectively with the average operating rate being 91%. The specification structure of
titanium dioxide in 2005 was as follows:

Table I-3.2.1-1 Specification structure of titanium dioxide in 2005
Specification Output/kt Proportion
Titanium dioxide rutile 229 34%
Titanium dioxide anatase 371 54%
Non-pigment grade titanium dioxide 82 12%
Total 682 100%

At preset, there are about 60 manufacturers of titanium dioxide in China, of which 12 ones are
able to produce Titanium Dioxide Rutile. Except for Pan Gang Group Jinzhou Titanium
Industry Co., Ltd., all other manufacturers adopt Sulfuric Acid Method to produce titanium
dioxide. In 2006, driven by domestic demand and the increment of export, titanium dioxide
industry of China presents a prosperous situation both production and marketing thrive.

- Characters of Chinese titanium dioxide industry

i) With rapid development in the past, production and consumption explosively increased.

During the Ninth Five-year Plan (1996~2000), titanium dioxide industry of China developed
rapidly, the CAGR of output and apparent consumption was 30.4% and 23.5%. At the same
time, the import volume also increased much because of the fast development of its end use
sectors. Since 2001, China has owned the scale of titanium dioxide industry that exceeded
Japan and become the second biggest producer, merely next to the United States.

In 2001~2005, China’s titanium dioxide industry kept growing rapidly by leaps and bounds both
in the capacity and output although the growth rate was not higher than that during the “Ninth
Five-year Plan”. To 2005, titanium dioxide produced by Chinese enterprises amounted to
682kt with the contribution rate to global market being 14.9%. Here is the supply and demand
situation of titanium dioxide in China in the past.

19
Table I-3.2.1-2 Supply and demand situation of titanium dioxide in China in the past
Year Output/t Import/t Export/t Apparent consumption/t
1994 77,400 54,083 15,224 116,259
1995 121,800 53,450 22,800 152,450
1996 101,300 82,833 20,889 163,244
1997 111,500 91,789 23,477 179,812
1998 162,000 79,134 31,806 209,328
1999 191,000 109,028 42,068 257,960
2000 293,000 141,932 55,603 379,329
2001 354,000 153,130 55,535 451,595
2002 380,000 187,951 68,329 499,622
2003 420,000 228,533 79,015 569,518
2004 548,000 250,771 94,183 704,588
2005 682,000 227,736 157,425 752,311
CAGR (2001~2005) 17.8% 10.4% 29.8% 13.6%
CAGR (1996~2000) 30.4% 14.4% 27.7% 23.5%

ii) Enterprise production scale keeps enlarging, and the industry trends towards production
intensification.

Due to the heavy pressure from environmental protection, some enterprises were shut down,
as a result, the number of Chinese titanium dioxide manufacturers decreased to about 60. On
the contrary, its output in 2005 reached 682kt with a year-on-year increment of 24.5% which
was several times as the growth rate of global titanium dioxide output.

In 2005, there were 27 manufacturers with respective output over 10kt, 10 manufacturers with
the respective output being over 20kt, 5 manufacturers with the respective output being over
30kt, and 1 manufacturer with the output being over 40kt.

In 2005, the output of the top ten manufacturers totaled 313,750 tonnes which accounted for
46% of countrywide output of titanium dioxide.

The above data shows that titanium dioxide industry of China is tending towards production
intensification.

iii) Compared with oversea enterprises, Chinese titanium dioxide enterprises have
undeveloped technologies, lower quality products and fewer specifications.

At the original stage of the global titanium dioxide industry, it was only Sulfuric Acid Method
that was used to produce titanium dioxide. Sulfuric Acid Method had many disadvantages such
as seroius waste-generation and low utilization ratio of resources, furthermore, the demand for
Titanium Dioxide Rutile from consumers turned larger and larger. As a result, Sulfuric Acid
Method was gradually displaced by Chlorination Method which had many advantages
including fewer impurities, narrow granularity distribution and high white content. According to
statistics in 1996, the capacity of Chlorination Method exceeded that of Sulfuric Acid Method,
the former accounted for 55% of global capacity of titanium dioxide, while the latter only took
20
45%. At present, in American, there is little market share for Titanium Dioxide Rutile produced
by Sulfuric Acid Method, and all existing manufacturers who adopt Sulfuric Acid Method just
produce Titanium Dioxide Anatase.

Different from the situation of other countries, Chinese titanium dioxide manufacturers widely
adopt Sulphuric Acid Method to produce titanium dioxide. Among about sixty active producers,
only Jinzhou Titanium Industry Co., Ltd. of Pan Gang Group (Pan Jin Tai Ye) adopts
Chlorination Method. The company owns the capacity of 15,000t/a, 2% of total capacity in
China. In theory, Sulfuric Acid Method could produce Titanium Dioxide products which were of
equivalent quality with Chlorination Method, but actually, in the international market, no
products of Sulfuric Acid Method can contend against top-ranking products of Chlorination
Method either on the aspect of appearance, resistance to elements or dispersivity, etc.
Although the quality of products from Pan Jin Tai Ye is improved much in the past, there is still
a long way to catch up with the similar type of products of large oversea companies.

Because of the increasing demand for first-class titanium dioxide from end use sectors
especially slap-up coatings industry, China must import a large amount of titanium dioxide
products every year. In the past three years, China imported more than 200,000 tonnes of
titanium dioxide products per year to meet domestic demand.

iv) The pressure of environmental protection becomes heavier.

It is well-known that Sulfuric Acid Method causes serious environmental pollution and the
treatment of pollution costs high. In fact, environmental protection has already imposed a
heavy burden on each titanium dioxide enterprise.

Undoubtedly, aknowlegement of “Clean Production” is now one of the most important factors
deciding whether titanium dioxide enterprises can realize the sustainable development. In
recent years, the Chinese government highlighted the concept of environmental protection. In
2002~2005, almost all titanium dioxide manufacturers were exposed by Media or government
their faulty establishment for bad environmental protection or nonstandard operation which led
to the superfluous discharge of “three-waste”. Many of these enterprises were required to
consolidate within a given time, during which the manufacturers must stop production or
reduce the output.

Moreover, rigorous regulations about environmental protection also affect the future
distribution of titanium dioxide industry. In the past three years, several initiated projects of
titanium pigment were suspended or stopped because they failed to pass the evaluation of
environmental protection, through which the eyeless enlargement of capacity was strictly
monitored. Several years ago, seldom titanium dioxide enterprises attached importance to the
warning on environmental protection, but now the severe situation comes true.

At present, Chinese governmental policies on the development of titanium dioxide industry are
these:
- To encourage project development of Chlorination-Method titanium dioxide;
- To encourage the exploitation of new technology and new products;
21
- To forbid the development of Sulfuric-Acid-Method projects to some certain extent unless the
project has such advantages as that the quality reaches international standard, and both
waste acid and ferric sulfate are effectively utilized.
- The newly established projects of both Chlorination Method and Sulfuric Acid Method must
conform to the standard of environmental protection.

- Supplying situation of raw materials

At present, since that the domestic supply of titanium ore resource is insufficient, China must
import a lot of ilmenite sand and titanium-rich slag. In the future, titanium ore resource will
surely become one of the key factors that affect the development of titanium pigment industry
of China.

As an kind of unreproducible resource, titanium ore has a definite trend of short-supply along
with the development of titanium pigment industry. Therefore, future competition in titanium
pigment industry of different countries, regions and enterprises will focus on the ownership of
mine resource.

Raw materials used to produce titanium pigments include ilmenite and titanium slag.

Ilmenite

Although China is one of the countries that own the most abundant titanium resource, more
than 90% of titanium ore is symbiotic mine in which the content of titanium dioxide is low and
its components are complex. At present, China needs about 1,800 kilo tonnes of ilmenite per
year for titanium pigment, but domestic capacity of ilmenite is only 1,000kt/a. China imports
ilmenite and titanium-rich slag from Australia, Canada, Vietnam, India and North Korea. In the
future, the output of titanium pigment will increase rapidly, which will definitely widen the gap
between demand and supply of ilmenite.

In the future, it is inevitable that the supply of titanium resource in China is insufficient, so
titanium pigment enterprises should make full preparation to deal with such situation. Those
powerful enterprises may participate in the exploitation of titanium ore resource, while ordinary
enterprises are only able to purchase it from domestic and oversea market.

Titanium slag

Ilmenite, mixed with reductant containing carbon, is smelted and reduced in smelting furnace,
during which, iron oxide is selectively reduced to be iron metal while oxide of titanium is
enriched to form the final product “Titanium Slag”.

Titanium slag is mainly used to produce titanium sponge, electric wedding rod and titanium
pigment. In fact, more than 90 percent of titanium slag is used as the raw material of titanium
pigment.

Compared with ilmenite, titanium-rich slag can not only improve the quality of product but also
22
reduce 40% of acid, 20% of electricity and 30% of water and basically avoid ferrous sulfate
(major byproduct when ilmenite is used as raw material).

Manufacturers of titanium pigment probably choose titanium slag as the raw material for
production under the situation that regulations on environmental protection are more and more
rigorous in the world. In foreign countries, Sulfuric Acid Method is not permitted to employ
ilmenite as the raw material. From 1990 to 2000, the global capacity of Chlorination-Method
titanium pigment increased from 1,500kt/a to 2,610kt/a, and its proportion in global output of
titanium pigment went up from 45.3% to 57.6%. At present, the output of Chlorination-Method
titanium pigment accounts for over 60% of global titanium pigment. The rapid development of
Chlorination-Method titanium pigment leads to enormous demand for titanium-rich slag.

However, the imported titanium-rich slag with lots of advantages is imposed 4.5%~6.5% tariff
because there is no special importing tariff number for it in China, which seriously affects the
enthusiasm of titanium pigment manufacturers who employ titanium-rich slag as raw material.
Therefore, China National Coatings Industry Association submitted the related report in June
2006 to State Tariff Committee. In such report, the association desired that the tariff of
titanium-rich slag be exempted and importing tariff No. of titanium-rich slag be also confirmed.

- Manufacturers of titanium dioxide

Table I-3.2.1-3 List of major titanium dioxide producers and their production situation in 2005 (unit:t)
No. Company % total output Output Rutile Anatase
1 Shandong Dongjia Group Co., Ltd. 6.6% 44,862 24,296 20,566
2 CNNC Hua Yuan Titanium Dioxide Co., Ltd. 5.7% 38,884 36,124 2,760
3 Sichuan LOMON Corporation 5.7% 38,633 38,633 0
4 Jiangsu Taibai Group Zhenjiang Titanium Dioxide Co., Ltd. 5.6% 37,963 31,411 3,950
5 Pan Gang Group Chongqing Titanium Industry Co., Ltd. 5.5% 37,239 37,239 0
6 Shandong Jinan Yuxing Chemical Industry Co., Ltd. 4.2% 28,902 17,579 8,976
7 Anhui Tongling Annada Titanium Dioxide Co., Ltd. 3.4% 23,016 0 23,016
8 Guangxi Cangwu Shunfeng Titanium Dioxide Co., Ltd. 3.3% 22,643 0 22,643
9 Yunnan Dahutong Industry&Trading Co., Ltd. 3.1% 21,402 0 21,402
10 Nanjing Titanium Dioxide Chemical Co., Ltd. 3.0% 20,206 10,143 8,613
11 Guangxi Pinggui PGMA Co., Ltd. 2.7% 18,449 0 18,449
12 Henan Billions Chemicals Co., Ltd. 2.6% 17,873 4,915 12,723
13 Hunan Jintian Fertilizers and Chemical Engineering Co., Ltd. 2.5% 17,249 0 17,249
14 Hunan Yongli Chemical Incorporated Co., Ltd. 2.3% 15,446 3,705 11,741
15 Shandong Wudi Haixing Coal Chemical Industry Co., Ltd. 2.3% 15,390 0 15,390
16 Guangxi Dahua Chemical Plant 2.2% 15,258 N/A N/A
17 Pan Gang Group Jinzhou Titanium Industry Co., Ltd. 2.1% 14,615 14,615 0
18 Hunan Zhuzhou Chemical Industry Group Co., Ltd. 1.9% 12,722 N/A N/A
19 Guangxi Baihe Chemical Co., Ltd 1.6% 10,950 N/A N/A
Total 66.2% 451,702 218,660 187,478
23
I-3.2.2 Iron oxide pigment

- Historical development of iron oxide industry

Iron oxide industry in China began in the 1960s. It has been profoundly promoted by the
Reformation and Openness and the Ninth Five-year Plan. Nowadays it has already well
developed after 40 years’ growth. Iron oxide pigment ranks the second in both production and
sales volume in the pigment family.

China is the largest producer of iron oxide pigment all over the world, and its output amounts to
half of the world. The annual output of iron oxide in China in 2005 reached 622,700t, while the
global output in 2005 was about 1,260,000t. The production capacity in China exceeds
800,000t since 2005.

Table I-3.2.2-1 Production capacity and output of iron oxide pigment in China in recent years
Year Capacity (t/a) Output (t) Growth rate of output (%)
1997 - 256,000
-
1998 - 278,000 8.59%
1999 - 350,000 25.90%
2000 - 396,000 13.14%
2001 - 365,000 -7.83%
2002 600,000 416,000 13.97%
2003 713,000 460,000 10.58%
2004 783,000 545,000 18.48%
2005 800,000 622,700 14.26%

- Production situation of iron oxide pigment

¾ Production feature iron oxide pigment

9 Production in the world
There are generally two kinds of iron oxide products in the world’s market, natural iron oxide
pigment and synthesized one. The production proportion of these two kinds is about 1:3.

Extreme monopolization is the apparent feature in oversea production of synthesized iron
oxide. Since the 1990s, the iron oxide industry in the world is leaded by three giant enterprises.
Regarding region distribution, iron oxide production mainly concentrates in Europe and
America. Besides China, Japan is the second major producer in Asia.

There are three classes of country in terms of production capacity of iron oxide pigment in the
world. And the detail is shown in the following figures.

The first class includes these countries: China, Germany, UK, America, Japan and India.
The second class includes these: Canada, Russia, France, Spain, Mexico and the South Africa
and so on.
24
15,000 15,000
15,000 15,000
15,000 15,000
20,000 20,000
15,000 15,000
15,000 15,000
0
5,000
10,000
15,000
20,000
C
a
p
a
c
i
t
y
/
t
Canada Russia France Spain Mexico South
Africa
540,000 540,000
250,000 250,000
80,000 80,000 100,000 100,000
150,000 150,000
80,000 80,000
0
200,000
400,000
600,000
O
u
t
p
u
t
/
t
China Germany England USA Japan India
The third class includes these: Norway, Austria, Chili, Venezuela, Brazil, Cyprus, Australia,
The detail is shown as the following figures:

Figure I-3.2.2-1 Iron oxide output of the first class countries in 2004











Figure I-3.2.2-2 Iron oxide capacity of the second class countries in 2004












Among above countries, India develops quickly in recent years by taking advantage of raw
materials, energy and cheap labor source. It has become a major producer of iron oxide in
Southeast Asia.

Germany, America, the UK and Japan rank in the first class in terms of product’s grade,
marketing, price, comprehensive economic benefit and competition. Other countries come the
second.

9 Production in China
China makes important contribution to the world’s iron oxide production. Iron oxide pigment in
China has many specifications and a lot are exported. After all, there are no world-class
brands of iron oxide pigment made in China. On this account, China ranks between the first
and the second class.

¾ Regional distribution of iron oxide production in China

Before the 1980s, regional distribution of iron oxide production in China was decentralized,
and iron oxide manufacturers sporadically existed in the coastal area, the Central South China
25
and Central China.

From the middle 1990s on, the center of iron oxide production in China began to move to the
coastal areas. Typically, iron oxide production distributes in Shandong Province and Hebei
Province in the north, Jiangsu Province, Zhejiang Province and Shanghai City in Yangtze River
Delta, and Fujian Province and Guangdong Province in the north.

Most large-scale manufacturers of iron oxide pigment are located in Zhejiang Province,
Jiangsu Province, Shanghai City, Centre China and Central South China. The total production
capacity of iron oxide in coastal provinces and areas in 2005 reached about 600,000t,
amounting to 75% of the national capacity.

The top three regions with the largest iron oxide production capacity were Zhejiang Province,
Jiangsu Province and Shanghai City, and their total capacity in 2005 amounted to nearly 58%
of the national capacity. Zhejiang Province ranks the first with the production capacity about
203,000t/a in 2005. Three of the top ten manufacturers (Zhejiang Shenghua Group Deqing
Huayuan Pigment Co., Ltd, Zhejiang Deqing Ferricoxide Pigment Factory& Zhejiang Haining
Xiaoxiang Chemical Co., Ltd.) are located in Zhejiang Province. Jiangsu Province is the
second where the Chinese largest manufacturer is located.

Table I-3.2.2-2 Regional production distribution of iron oxide pigment in China in Jul 2005
Province/City Capacity (t) Province/City Capacity (t)
Zhejiang 203,000 Xiamen 11,000
Jiangsu 153,000 Guangxi 10,000
Shanghai 104,000 Jilin 10,000
Shandong 43,000 Guangdong 8,000
Henan 41,000 Shanxi 7,000
Hunan 38,000 Sichuan 4,000
Anhui 36,000 Jiangxi 3,000
Gansu 33,000 Yunnan 3,000
Hebei 32,000 Beijing 2,000
Xi’an 23,000 Harbin 2,000
Hebei 19,000 Ningxia 2,000
Tianjin 11,000 Xinjiang 2,000

¾ Production situation of iron oxide pigment series in China

i) Production capacity

As confirmed, the total production capacity of iron oxide series is currently 800,000t/a, of which
iron oxide red is 455,000t/a, amounting to 57% of the total capacity, iron oxide yellow is
200,000t/a, amounting to 25%, and iron oxide black is 120,000t/a, amounting to 15%. The rest
are mica iron oxide,compound iron green, transparent iron oxide and reprography magnetic
particle and so on with the capacity of 24,000t/a amounting to about 3% of the total. Production
capacities of iron oxide series from 2002 to 2005 is as follows:
26


Table I-3.2.2-3 Annual capacity of iron oxide series from 2002 to 2005 in China (Unit: t)
Products 2002 2003 2004 2005
Iron oxide red with mixed acid method 300,000 393,000 420,000 430,000
Iron oxide red with sulphuric acid method 20,000 16,000 20,000 15,000
Iron oxide red with dry method 25,000 26,000 20,000 10,000
Iron oxide yellow 170,000 193,000 200,000 200,000
Iron oxide black 60,000 58,000 100,000 120,000
Mica iron oxide 12,000 14,000 15,000 15,000
Compound ferric green 4,000 5,000 5,000 5,000
Transparent iron oxide 1,000 1,000 1,000 2,000
Reprography magnetic particle 1,000 1,000 2,000 2,000
Total 600,000 713,000 783,000 800,000

The average capacity growth rate of iron oxide pigment in recent years is about 10%.
Capacities of iron oxide black and magnetic particle grow at the fastest speed in iron oxide
series with the rate of 26%. Transparent iron oxide and iron oxide red also grow quickly at a
speed higher than the average growth rate.

In addition, the process to produce iron oxide red with mixed acid method becomes more and
more popular nowadays, which makes the capacity of iron oxide red with mixed acid method
amount to about 95% the total capacity. On the other hand, the capacities of iron oxide red with
sulphuric acid method and iron oxide red with sulphuric acid method decline.

ii) Output

Output of iron oxide pigment in China in 2005 reached 622,700t which, compared to that of
2004, was increased by 14.26%. The output in recent years increases rapidly with an average
annual growth rate of 14.4%. It is iron oxide black that has the largest growth rate in production
volume in iron oxide industry. The following table shows the situation of output of iron oxide
pigment in the past several years.

27
Ironred
39%
Ironyellow
38%
Ironblack
20%
Other
3%
Table I-3.2.2-4 Output of iron oxide series in China in 2002-2005 (Unit: t)
Product 2002 2003 2004 2005 Annual growth (%)
Iron oxide red 170,600 195,000 205,000 243,500 12.6
Iron oxide
yellow 166,000 180,000 210,000 236,000 12.4
Iron oxide
black 71,400 78,000 100,000 122,000 19.6
Other 8,000 7,000 30,000 21,200 38.4
Total 416,000 460,000 545,000 622,700 14.4

The average operating rate of the industry in 2005 was 78%, among which iron oxide red, iron
oxide yellow and iron oxide black respectively amount to 39%, 38% and 20%. These three
series of iron oxide pigment totally took a great proportion which is almost 97%. The
production structure of specific iron oxide pigment is shown as follows:

Figure I-3.2.2-3 Production structure of iron oxide in China in 2005











- Introduction to manufacturers of iron oxide

There are about 140 manufacturers producing iron oxide in China with the total capacity of
around 800,000t/a. Key manufacturers have been improving their products’ structure, quality,
instrument detection and transport condition to catch up the developing pace in developed
countries. There are stable export channels in China, and export volume increases yearly.

Among all manufacturers, the top ten have annual iron oxide capacity of 377,000 t/a,
amounting to about 40% of the national capacity. Production scale of these top ten ranges
from 10,000t/a to 100,000t/a. They own comparatively advanced technologies and capability
of researching and innovation to produce high grade iron oxide pigment up to the world class.

Jiangsu Yixing Yuxing Pigment Factory is the largest manufacturer of iron oxide pigment in
China with the production capacity of 100,000t/a in 2006, and it is the only one having the
capacity above 100,000t/a in China. Here are the top ten manufacturers in China.

28
Table I-3.2.2-5 Top ten manufacturers in China in 2006
No. Company name
Launch
time
Capacity in
2006/t·a
-1

Output in
June ‘06/t
Output
in 2005/t
1 Jiangsu Yixing Yuxing Pigment Factory 1977 100,000 5,080 62,222
2
Zhejiang Shenghua Group Deqing Huayuan Pigment
Co., Ltd.
1993 92,000 3,394 38,635
3 Hunan Three-ring Pigments Co., Ltd. 1965 40,000 2,850 30,297
4 Shanghai Yipin Pigments Co., Ltd 1931 40,000 N/A 35,019
5 Hangzhou Xiaoshan Yongfeng Chemical N/A N/A 1,650 N/A
6 Zhejiang Haining Xiaoxiang Chemical Co., Ltd. 1990 27,000 1,357 11,154
7 Bayer Shanghai Pigments Co., Ltd. 1997 20,000 N/A N/A
8 Jiangsu Changshu Ferroxide Factory 1958 20,000 N/A N/A
9 Zhejiang Deqing Ferricoxide Pigment Factory 1994 15,000 1,036 11,257
10 Shenzhen Elementis Pigment & Chemical Co., Ltd 1998 N/A N/A 22,616
Total 354,000 N/A 211,200

Entering the 20
th
century, iron oxide industry in China has experienced transformation in
manufacturer structure. Since that iron oxide industry does not have economic assistance from
government any more after China came into the age of market economy, there is much room
for non-state-owned enterprises in this industry.

Private manufacturers become the leader of iron oxide production, and many small-scale
producers come forth. Consequently, production of iron oxide in China is too scattered to have
unified management. This is the bottle-neck of iron oxide industry in China confronts: there are
too much manufacturers producing iron oxide in a small scale.

Apart from the top ten manufacturers, the rest one hundred and thirty all have the capacity
below 10,000t/a.These manufacturers do not have enough capital to enlarge their production
or to improve their technology. Further more, they are not willing to spend adequate effort on
environmental protection during their iron oxide production.

Production in small-scale manufacturers can not catch up with the pace of the development of
the world’s iron oxide industry. This situation leads to the problem that most of iron oxide
pigment produced in China is primary products with comparatively low quality and weak
competitiveness in the international market.

29
I-3.2.3 Lithopone

Lithopone is a kind of white pigment. And it is a mixture of zinc sulfide, zinc oxide, and barium
sulfate. It has properties of low oil absorption, low Mohs hardness, good whiteness and
masking power.

- Historical development of lithopone industry

Lithopone first appeared in France in 1850, when it was widely applied in coatings industry.

Since titanium oxide has the better performance than lithopone, lithopone was gradually
replaced by titanium oxide from the 1950s on.

After the 1970s lithopone almost disappeared in the coatings industry in developed countries.

In 1996 Germany Sachtleben stopped domestically producing lithopone, which was the end of
lithopone production in advanced countries.

- Current production situation of lithopone

Currently China is the only producer of lithopone in the world with the capacity of 340,000t/a in
2005.

There are 14 active manufacturers of lithopone in China in 2006.

Guangzhou Huali-sachtleben is the top producer in China with the capacity of 62,000t/a
accounting for 18.2% of the total capacity of lithopone in China.

Major regions producing lithopone include Hunan Province, Guangxi Province and Guangdong
Province, and their total output accounts for about 67% of the nation.

There are five lithopone producers in Hunan Province with the total capacity of 95,000t/a. They
are Changsha Fengchao, Xiangtan Niutou, Hengyang Meilun, Xiangtan Hongyan and Hunan
Linxiang.

There are two lithopone producers in Guangxi Province with the total capacity of 70,000t/a,
and they are Liuzhou Zinc and Guangxi Yuanjiang.

The total output of lithopone in China was 250,000 tonnes in 2005 and the operating rate was
only 73.5%.

30
Table I-3.2.3-1 Output of lithopone in the recent three years
Year 2003 2004 2005
Output/t 226,000 235,218 250,000

- Manufacturers of lithopone

Table I-3.2.3-2 Lithopone manufacturers in China
Output(t)
No. Producer
Capacity
(t/a) 2005 2004 2003
1 Guangdong Guangzhou Huali-sachtleben Chemical Co., Ltd. 62,000 61,915 60,616 59,138
2 Liuzhou Zinc Products Group 40,000 - - 28,600
3 Hebei Yuhuan Industry Co., Ltd. 30,000 33,460 23,140 16,708
4 Guangxi Wuzhou Yuanjiang Lithopone Co., Ltd. 30,000 16,937 - -
5 Hunan Changsha Fengchao Pigment Chemical Co., Ltd. 25,000 22,097 16,620 19,103
6 Shandong Qingdao Baiyu Chemical Industry Co., Ltd. 23,000 - - -
7 Hebei Xuri Industry Co., Ltd. 20,000 21,568 23,000 20,318
8 Hunan Xiangtan Niutou Chemicals Co., Ltd. 20,000 20,362 - -
9 Hengyang Meilun Pigmental Chemical Co., ltd. 20,000 18,766 15,008 15,424
10 Shanghai Jinghua Chemical Co., Ltd. 20,000 15,330 12,604 10,782
11 Hunan Xiangtan Hongyan Chemical Co., Ltd. 20,000 13,389 - -
12 Hebei Yongming Lithopone Factory 16,000 16,201 9,560 5,410
13 Hunan Linxiang Chemical Plant 10,000 - - -
14 Yunnan Malong Wanqi Chemicals Co., Ltd. 4,000 5,302 - -
31
Lemon chrome
yellow 20.8%
Chrome yellow
49.6%
Molybdate red
10.1%
Zinc yellow 3.7%
Other 15.8%
I-3.2.4 Chrome pigment

China is the largest producing nation of chrome pigment in the world with the capacity of
40,000t/a accounting for about 40% of the total global capacity.

Table I-3.2.4-1 Output of chrome pigment in the recent three years
Year Capacity(t/a) Output/t Operation rate
2005 40,000 36,600 91.5%
2004 40,000 32,981 82.5%
2003 40,000 30,342 75.9%

Table I-3.2.4-2 Specifications of chrome pigments in China in 2005
Product Output/t
Chrome yellow 18,153
Lemon chrome yellow 7,612
Molybdate red 3,697
Zinc yellow 1,348
Other 5,790
Total 36,600

Figure I-3.2.4-1 Product structure of chrome pigment in China in 2005












There are 16 active producers of chrome pigment in China in 2006.

Jiangsu Shuangle Chemical Pigment Co., Ltd. was the top producer of chrome pigment with
the output of 6,068 tonnes in 2005 accounting for 16.6% of the total output in China.

32
Table I-3.2.4-3 Active producers of chrome pigment in China (Capa., t/a; Prod., t)
No. Producer
Capa.
05'
Output
‘05
Output
‘04
1 Jiangsu Shuangle Chemical Pigment Co., Ltd. 7,000 6,068 5,399
2 Shanghai Chrome Yellow Pigment Factory 5,000 4,523 4,462
3 Chongqing Jiangnan Chemical Co., Ltd. 5,000 4,321 4,418
4 Shandong Penglai Xinguang Pigment Chemical Co., Ltd. 4,000 3,923 3,918
5 Henan Xinxiang Highland Pigments Co., Ltd. 3,000 2,847 2,783
6 Hunan Star & Moon Pigment Liability Co., Ltd. 2,500 2,507 1,502
7 Jiangsu Taizhou Zhongjian Industry Co., Ltd. 2,500 2,305 2,425
8 Jiangsu Suzhou Industry Park Chuangyi Pigment Factory 2,000 2,059 1,731
9 Shanghai Junma Chemical Co., Ltd. 2,000 1,707 1,700
10 Guangdong Xiangyuan Chemical Architecture Material Co., Ltd. 1,500 1,550 200
11 Zhejiang Hangzhou Yingshanhua Pigment Chemical Co., Ltd. 1,500 1,326 1,490
12 Anhui Guangde Fuli Dope Factory 1,500 1,209 1,285
13 Tianjin Beacon Pigment Co.,Ltd. 1,000 935 800
14 BeiJing Jingcan Pigment Chemical Co., Ltd. 500 525 484
15 Shandong Jinan Ink Factory 500 415 185
16 Zhejiang Hangzhou Baihe Chemical Holding Group. 500 398 200
Total 40,000 36,618 32,981


33
Europe 33.0%
Japan 14.0%
South America
7.0%
Other countries
13.0%
North America
33.0%
I-3.2.5 Organic pigment

Production of organic pigment mainly centralized in North America and West Europe, where
the capacity respectively accounted for 29% and 19% of the world.

About 67% of organic pigment in the world were consumed in Europe and America.

Figure I-3.2.5-1 Distribution of high-grade organic pigment in the world in 2004











Comparison between organic pigment and inorganic pigment

Compared to inorganic pigment, organic pigment has better performances as follows:
9 Vivid color light
9 High color intensity
9 Good transparency
9 Good chemical stability
9 Various chromatograms
9 Many varieties
9 Less poison

- Historical development of organic pigment

In 1899 the first organic pigment, Lithol Red, was explored and sold as sodium salt.

In 1903 Lake Red C (C.I. Pigment red 53:1) was developed.

In 1910 Pigment Hansa yellow was put into the market.

In 1911 Pigment yellow 12 (Benzidine yellow) was developed.

A milestone of organic pigment in its development is that blue phthalocyanine pigment
appeared in 1935 and then green phthalocyanine pigment was put into the market in 1938.

In 1954 Ciba-Geigy Co., Ltd. in Switzerland developed yellow and red azo pigment with good
thermal stability and non-migratory.
34

In 1955 DuPont Co., Ltd. in USA developed pigment quinacridine red and orange.

In the 1960s Hoechst Co., Ltd. in Germany developed pigment benzimidazolone yellow,
orange and red.

In the 1970s isoindolinone pigment was developed by Ciba-Geigy Co., Ltd. and BASF Co.,
Ltd.

In the 1980s Ciba Co., Ltd. developed DPP red and orange.

- Current production situation of organic pigment

China is the largest producer of organic pigment in the world with the output of 156,585 tonnes
in 2005, accounting for 39.9% of the world. However, the sales value in China only accounted
for 20% of the global sales value in 2005.

Currently Chinese producers attach more importance to plastic and high-grade coatings, and
some new organic pigment for plastic and high-glade coatings are being developed.

About 35% of the total producers in China have reduced their output of organic pigment
because of the rising price of raw materials and harsh competition in Chinese market. Many
small enterprises stopped production or ran at half capacity.

Chinese producers of organic pigment can produce about 250 specifications of organic
pigment, among which about 120 are produced routinely.

Phthalocyanine and diaminodiphenyl are the major specifications of organic pigment in China,
accounting for above 60% of the total output in China.

35
Table I-3.2.5-1 Output of organic pigment in the recent three years
Year Capacity (t/a) Output (t) Growth rate
2005 180,000 156,585 9.1%
2004 180,000 143,551 13.0%
2003 160,000 127,000 32.0%
2002 120,000 96,212 20.0%

At the end of 2005 there were 5 producers of Diketopyrrolo (3,4-c) pyrrole pigment (DPP) in
China with the specification of C.I. Pigment red 254. The total capacity of the five ones was
less than 500 t/a, and most of their products were exported overseas.

There is no production of C.I. Pigment red 264 in China though its price is high in the
international market. There are two reasons as follows:
9 There is no production of 4-Cyano-Biphenyl, one of its primary raw materials, in China.
9 The yield is low if the same technology with that of C.I. Pigment red 254 is applied

- Manufacturers of organic pigment

There are above 100 producers of organic pigment in China and they are mainly located in
Zhejiang Province, Jiangsu Province, Shanghai City, Tianjin City, Hebei Province, Shandong
Province and so on.

In 2005 the top 10 producers of organic pigment were Zhejiang Changzhou North American
Pigment and Chemicals Co., Ltd., Zhejiang Hangzhou Baihe Chemical Holding Group., Hebei
Jiehong Pigment Chemicals Co., Ltd., Shanghai Aster Printing Pigments (China) Co., Ltd.,
Hebei Meilida Pigment Industry Co., Ltd., Jiangsu Shuangle Chemical Pigment Co., Ltd.,
Shanghai Silian Industrial Co., Ltd., Guangdong Zhuhai Toyo Ink Co., Ltd., Clariant (Tianjin)
Ltd. and Zhejiang Baoyuan Chemical Co., Ltd., and their total output was 97,992 tonnes
accounting for 62.6% of the nation’s.

Zhejiang Changzhou North American Pigment and Chemicals Co., Ltd. was the largest
producer of organic pigment in China with the output of 25,370 tonnes in 2005 accounting for
16.2% of the total output of organic pigment in China.

In the middle of 2005 BASF Dyestuff Chemical Co., Ltd. was officially acquired by CVC
CapitalPartners of England to establish Shanghai Aster Printing Pigments (China) Co., Ltd
whose output together with that of BASF Dyestuff Chemical Co., Ltd. in 2005 reached 10,957
tonnes.

36
Table I-3.2.5-2 Top 10 active producers of organic pigment in China
Output (t)
No. Producer
2005 2004 2003
1 Zhejiang Changzhou North American Pigment and Chemicals Co., Ltd. 25,370 21,684 17,782
2 Zhejiang Hangzhou Baihe Chemical Holding Group. 14,097 10,655 8,478
3 Hebei Jiehong Pigment Chemicals Co., Ltd. 13,059 13,033 12,600
4 Shanghai Aster Printing Pigments (China) Co., Ltd. 10,957 13,942 12,251
5 Hebei Meilida Pigment Industry Co., Ltd. 9,383 6,879 4,248
6 Jiangsu Shuangle Chemical Pigment Co., Ltd. 6,576 5,198 3,657
7 Shanghai Silian Industrial Co., Ltd. 4,994 5,862 5,167
8 Guangdong Zhuhai Toyo Ink Co., Ltd. 4,788 5,410 4,282
9 Clariant (Tianjin) Ltd. 4,733 5,035 3,941
10 Zhejiang Baoyuan Chemical Co., Ltd. 4,035 3,177 2,873
Total 97,992 90,875 68,749

37
I-3.3 List of pigment manufacturers in China

There were all together about 350 pigment manufacturers in China in 2005. Among these, 60
manufacturers produced titanium dioxide, 140 ones specialized in iron oxide, 14 for lithopone,
16 for chrome pigments, and the rest 100 ones produced organic pigment.

- The largest pigment manufacturer in China

Jiangsu Tianpeng is the top one pigment manufacturer in China with lead salt series products.
This manufacturer produced 94,605 tonnes of pigment in 2005 accounting for 5.1% of the
national pigment output.

- The largest in iron oxide industry

Yixing Yuxing is the top producer of iron oxide pigment in China, whose actual output in 2005
was 62,222 tonnes accounting for 10.0% of the national output of iron oxide pigment.

- The largest in lithopone industry

Guangzhou Huali-sachtleben is the largest producers of lithopone in China, which produced
61,915 tonnes of lithopone in 2005 accounting for 24.3% of the total output of lithopone in
China.

- The largest in chrome pigment industry

Jiangsu Shuangle is the top producer of chrome pigment in China with the output of 6,068
tonnes in 2005 accounting for 16.6% of the total output of chrome pigment in China.

- The largest in organic pigment industry

Changzhou North America is the top producer of organic pigment in China with the output of
25,370 tonnes in 2005 accounting for 16.2% of the total output of organic pigment in China.
38
Table I-3.3-1 List of major producers in 2006
Output (t)
No. Producer Product
2005 2004 2003
1 Jiangsu Tianpeng Chemicals (Group) Co., Ltd. Lead salt series 94,605 104,828 98,430
2 Jiangsu Yixing Yuxing Pigment Factory Iron oxide 62,222 35,800 30,703
3
Guangdong Guangzhou Huali-sachtleben Chemical
Co., Ltd.
Lithopone 61,915 60,616 59,138
4 Guangdong Sanshui T&H Glaze Co., Ltd.
Glaze products for
ceramic
48,868 39,540 38,956
5 Shandong Dongjia Group Co., Ltd. Titanium dioxide 44,862 N/A N/A
6 CNNC Huayuan Titanium Dioxide Co., Ltd. Titanium dioxide 38,884 N/A N/A
7 Shenghua Group Deqing Huayuan Pigment Co., Ltd. Iron oxide 38,635 32,355 17,029
8 Sichuan Lomon Corporation Titanium dioxide 38,633 18,397 N/A
9
Jiangsu Taibai Group Zhenjiang Titanium Dioxide
Joint-stock Co., Ltd.
Titanium dioxide 37,963 32,758 19,999
10
Pan Gang Group Chongqing Titanium Industry Co.,
Ltd.
Titanium dioxide 37,239 23,287 19,230
11 Shanghai Yipin Pigments Co., Ltd. Iron oxide 35,019 38,588 34,423
12 Hebei Yuhuan Industry Co., Ltd. Lithopone 33,460 23,140 16,708
13 Hunan Three-ring Pigments Co., Ltd. Iron oxide 30,297 24,507 19,957
14 Shandong Jinan Yuxing Chemical Industry Co., Ltd. Titanium dioxide 28,902 24,976 22,460
15 Jiangsu Changzhou North American Chemical Group Organic pigment 23,827 15,051 9,234
16 Anhui Tongling Anada Titanium Dioxide Co., Ltd. Titanium dioxide 23,016 N/A N/A
17
Guangxi Cangwu Shunfeng Titanium Dioxide Co.,
Ltd.
Titanium dioxide 22,643 18,825 16,187
18 Shenzhen Elementis Pigment & Chemical Co., Ltd Iron oxide 22,616 23,412 22,024
19 Hunan Xiangtan Niutou Chemicals Co., Ltd.
Lithopone,
cadmium pigment
22,254 17,026 17,960
20
Hunan Changsha Fengchao Pigment Chemical Co.,
Ltd.
Lithopone 22,097 16,620 19,103
21 Hebei Xuri Chemical Co., Ltd. Lithopone 21,568 23,000 20,318
22 Yunnan Dahutong Industry & Trading Co., Ltd. Titanium dioxide 21,402 N/A N/A
23 Shanghai Jinghua Chemical Co., Ltd. Lithopone 15,330 12,604 10,782
24 Nanjing Titanium Dioxide Chemical Co.,Ltd. Titanium Dioxide 20,206 24,880 21,085
25
Hunan Hengyang Meilun Pigmental Chemical Co.,
ltd.
Lithopone 18,766 15,008 15,424
26 Guangxi Pinggui PGMA Co., Ltd. Titanium dioxide 18,449 14,054 2,651
27 Henan Billions Chemicals Co., Ltd. Titanium dioxide 17,873 N/A N/A
28
Hunan Jintian Fertilizers and Chemical Engineering
Co., Ltd.
Titanium dioxide 17,249 14,291 8,020
29 Hebei Yongming Lithopone Factory Lithopone 16,201 9,560 5,410
30 Zhejiang Baihe Chemical Holding Group Organic pigment 15,457 10,657 8,478

39
I-4 Price analysis of pigment in China

- Titanium pigment

The price of titanium pigment is usually influenced by the supply & demand situation and the
price of raw materials.

9 International market

In the past several years, demand for titanium pigment in the global market kept increasing
steadily while the supply retrenched. No new plants were established by large international
manufacturers since 1997. On the contrary, Millennium, Ken-mcgee and Huntsman, the 2
nd
, 3
rd
,
4
th
biggest manufacturer of titanium pigment in the world, shut down some
Sulfuric-Acid-Method production installations in recent two years due to the factors including
economic benefit and environmental protection.

Under the condition of short supply in the international market, the price of titanium pigment
jumped four times in 2005 each with an increment of USD100/t to USD150/t. When entering
2006, Major manufacturers such as Millennium, Huntsman, etc, raised up the market price of
titanium pigment again on January 1st, 2006, and the markup stayed between USD100/t and
USD150/t.

9 Domestic market

Similar to the international market, the price of titanium pigment in Chinese market also
fluctuated widely along with the supply situation.

At the beginning of 2003, the price of home-made rutile type products rose because of the
shortage of supply. By the end of the same year, anatase type products were also very
salable.

From winter of 2003 to spring of 2004, most manufacturers basically had no storage and the
price of anatase type products universally went up with the markup of RMB300~500/t, which
was opposite to previous situation. Meanwhile, the price of rutile type titanium dioxide declined
to some extent because of two reasons. One was that China imported 229 kilo tonnes of
titanium pigment in 2003, of which about 170 to 180 kilo tonnes are rutile type; the other was
that several sets of new rutile type equipment in Shandong Jinhong, Sichuan Lomon and
Hunan Yongli were put into production, which led to swift increment of the output of rutile type
products.

In general, the price of rutile type titanium pigment declined slowly along with the increment of
its output. In May 2005, the price of rutile type products was between RMB19,950/t and
RMB20,050/t. But in July 2006, the quoted price was universally lower than RMB18,000/t.
Here is the price of titanium pigment in some areas in July 2006.


40
Table I-4-1 Price of titanium pigment in July 2006
Producing area Specification Price (RMB/t) Packaging mode
Guangxi BA01-01 9,500 25kg/bag
Liaoning Jinzhou R501 18,000 paper bag
Shandong Jinan R818 16,100 25kg/bag
Shandong Zibo R-236 15,500 25kg/bag
Chongqing R224 16,000 paper bag
Gansu R-215 15,500 25kg/bag
Henan BA010 11,300 25kg/bag
Jiangsu Zhenjiang R904 16,400 25kg/bag
Jiangxi GA-100 10,500 25kg/bag
Sichuan Lomon R996 16,500 25kg/bag
Yunnan BA01-01 10,500 25kg/bag
Hubei Wuhan BA01-01 10,500 paper bag

Supported by the markup of raw materials, the price of rutile type titanium pigment will not
decline in a vast scale but vary within a certain extent in the future.

- Iron oxide pigment

9 Price change in the past several years (from 2003 to 2005)

Before 2003, the price of iron oxide pigment had kept declining. However, it began to climb up
rapidly from 2003 with the rise of production cost and other factors.

i) Force from the rise of production cost

Raw materials for iron oxide pigment such as sheet iron, sulphate, liquid alkali and nitric acid,
are the very direct factors related its production cost. The price of these raw materials turned to
rise in 2003, which brought the rise of iron oxide pigment price. In 2004 the price of raw
materials was 3-4% higher from 2003. The price of sulphate and liquid alkali was up to
RMB700/t, and that of nitric acid reached RMB1,400/t. Sheet iron also became more
expensive, going up from RMB2,500/t in February to RMB2,600/t in July in 2004.

Other important production sources such as energy and fuel influnced the price of iron oxide
pigment in those years. A turbulence happened in the international energy market in 2004,
which led to the jump of energy price. Simultaneously, transportation fee went up. Price of
energy and transport charge hiked around 30-40% in 2004. Diesel oil at that time was
RMB4,000/t, and coal reached RMB610/t.

In late March 2004, most manufacturers boosted their price of iron oxide pigment with a rate
around of 20% as their production face the price ascendance of raw materials, energy, and
transport charge.

41
ii) Influence from regulation and policy

Some relative regulations and policies of the government had influenced he price of iron oxide
pigment. The government issued some rules to regulate the production security of iron oixde
pigment. Manufacturers are required to spend more expense on environmental protection and
resource sustainability.

Nevertheless, the piece rise was necessary and was in accordance with the development
trend of iron oxide industry. The tax reimbursement for export in the early 2004 was reduced
by 2 percentage point, which decreased USD20 million of rebate taxation of the iron oxide
industry. In addition, commercial protectionism revived to cause the price fluctuation of iron
oxide pigment. The rise of price in the past years benefited the heathy development of iron
oxide pigment industry in China.

¾ Price war in the iron oxide industry in China

In the Chinese market for iron oxide pigment, on one side, the price has been keeping climbing;
on the other side, a price war in the iron oxide industry is raised by domestic manufacturers
from the late 2003 to late 2005. There are several factors for the price war.

- The exceeding enlargement of production capacity. From 2003 to 2005, new production
lines with total capacity near 50,000t have been established in China. Since that the
average profit declined, manufacturers had no choice but to lowered down their price so as
to expand their market.

- There is a deep gap in the price growth rate between iron oxide products and raw
materials, energy and transportation. According to statistics, the growth rate of raw
material, sheet iron reached 23%, while the rate for iron oxide pigment was only 9.7%
during 2003 to late 2005.

- The ideology about competition of manufacturers in the industry was misled. In front of
competition, many manufacturers did not take measures to promote their product quality
or improve their technology, never to mention co-operate with each other. Instead, they
considered competition as to defeat with one another in the market through lowering down
the price.

As a result, in the early 2005, a so-called suggestive industrial price was put forward for the
first time by the Committee of Iron Oxide Industry in China with the view of keeping basic profit
and stabilizing the market of the industry. Later on, having been formed different quality grades
of iron oxide products, most manufacturers of the industry raised up their price. As a result, a
reasonable price system was formed, which benefits the stable functioning of the price of iron
oxide pigment.

42
Table 1-4-2 Suggestive industrial price of iron oxide pigment in 2005
Item
Mixing acid
method
Sulphuric acid
method
Additive
process
Liquid-phase
synthesis
Sale in domestic market (RMB/t) 6,000 5,000 - - Iron oxide
red Sale in overseas market (USD/t) 740 600 - -
Sale in domestic market (RMB/t) - 6,100 - - Iron oxide
yellow
Sale in overseas market (USD/t) - 750 - -
Sale in domestic market (RMB/t) - - 5,600 6,300 Iron oxide
black
Sale in overseas market (USD/t) - - 680 760

9 Price situation in the first half of 2006

The price of iron oxide pigment turns to keep stable in 2006 on the whole. The stabilization
benefits from the following factors:

i) Balance between supply and demand of the industry

According to estimation, the supply and demand of iron oxide pigment in 2006 keeps balance
on the whole. Except some particular oversupply and short-supply in some places some time,
the market of the entire industry will stay balanced in the short term.

- Demand situation of iron oxide pigment

With the smooth rapid development of domestic economy in China, demand for iron oxide
pigment in China will keep rising. Meanwhile, development of the downstream industries of
iron oxide pigment such as building materials, coatings and rubber will be controlled at sound
pace under the condition of macro-adjustment, circulative economy and sustainable
development of the country.

It is assessed that the total domestic demand of iron oxide pigment in China will be around
250,000t in 2006. The total consumption volume will be about 600,000t during the whole year,
with the export volume of more than 600,000t. Consumption of this year will be upped by 4-6%
from 2005.

- Production capacity of iron oxide pigment

During the past several years, production of iron oxide pigment had been boosted with a total
increase at least over 100,000t because of large quantities of investment in the industry and
the enlargement of production capacity.

Most small-scale manufacturers will be closed by the end of 2006. Usually, those small-scale
manufacturers produce low quality products with comparatively high cost. Their production is
conducted under dangerous condition and causes serous pollution to the surroundings.
Closing them will benefit the stability of iron oxide price.

43
- Transportation efficiency for iron oxide pigment

Transportation efficiency for iron oxide pigment has been strengthened in 2006 a lot after the
transportation structure is gradually optimized. This guarantees the requirement of transport
for export in each region of China.

At the same time, oversea transport will cost more with the rise of oil price in the international
market. The improvement of transportation will also benefit the price stabilization.

ii) Policy of macro-adjustment for iron oxide pigment

During the past 5 years, the production capacity of iron oxide pigment has been doubled over
reaching 800,000t/a. The over capacity comes forth and brings in pressure for the iron oxide
industry. In the face of this, the states speeds up the pace of macro-adjustment for iron oxide
industry.

Many measures are taken as macro-adjust the industry. For example, the State Department
issued a policy in the early of the year that production with capacity below 5,000t/a will be not
allowed. The implementation of the policy will effectively temper the pressure of oversupply
and benefit the stabilization of iron oxide price.

iii) Support from production cost

Production cost of iron oxide pigment is upped nowadays and this helps the stabilization of
price. As mentioned before, the Chinese government pays more attention to protection of
environment and natural resources and production security, which asks for higher cost for iron
oxide pigment production.

According to statistics, the production cost is up to RMB4,300/t at present from the original
RMB3,800/t. The cost rise of iron oxide pigment supports the price to stay reasonably high.

Some manufacturers put forward a suggestive price again in 2006. Here are the details:

Table 1-4-3 Suggestive price of the iron oxide industry in the third quarter in 2006
Item
Mixing acid
method
Sulphuric acid
method
Additive
process
Liquid-phase
synthesis
Sale in domestic market (RMB/t) 5,800 4,600 - - Iron oxide
red Sale in overseas market (USD/t) 700 580 - -
Sale in domestic market (RMB/t) - 6,000 - - Iron oxide
yellow
Sale in overseas market (USD/t) - 730 - -
Sale in domestic market (RMB/t) - - 5,560 6,250 Iron oxide
black
Sale in overseas market (USD/t) - - 670 750

According to export situation in recent years, export price of iron oxide has begun to go up.
The average export price in 2005 was about 9-16% up from 2004. On one side, this is in
44
accordance with the price raise of international iron oxide series. On the other side, it not only
brings in more profit for the country, but also proves the successful development of Chinese
iron oxide industry. Chinese iron oxide is generally accepted and recognized in quality,
specification and application in the international market.

9 Forecast on the price of iron oxide pigment

On the whole, the price of iron oxide pigment will keep stable in China in the near future.
Further, the price will be adjusted to meet the requirement of the demand and supply.

The price of iron oxide pigment in some part of China and price of some particular
manufacturers will vary and may even fluctuate a little in a certain period in future. However,
this individual change won’t affect the whole price trend of stabilization.

As the first year of the 11th Five-year Plan in China, 2006 takes developing economy smoothly
and rapidly as the theme. The price stabilization of iron oxide pigment in China will promote the
development of domestic economy to grow soundly and harmoniously since that the
permanence of the iron oxide industry plays an important role in the domestic economy.

- Lithopone

The average price of lithopone in 2004 was about RMB3,000/t, and the profit was about
RMB35/t. Influenced by the markup of raw material, major export enterprises such as
Guangzhou Huali-sachtleben, Guangxi Yuanjiang, Xiangtan Niutou and Hengyang Meilun
adjusted the export price to RMB3,400/t~RMB3,500/t in May 2005. The average export price
of lithopone in 2005 was RMB3,230/t, RMB230/t over than that in 2004.

The price of raw materials for lithopone rose rapidly in 2004 and 2005. For example the prices
of Zinc oxide, coil, fuel oil, sulphuric acid, zinc dust and potassium permanganate in 2005 were
up by 25%, 22%, 30%, 20%, 25%, and 90% from those in 2004 respectively. Since that above
raw materials are all non-renewable resources, their prices will keep rising in the following
years.

The cost to produce lithopone had increased RMB535/t only from January to March in 2005.

- Chrome pigment

The price of chrome pigment was about RMB15,110/t in China in 2005, which was 11.1% more
than that in 2004.

Table 1-4-4 Price of chrome pigment in the recent three years (RMB/t)
Year Domestic price Import price Export price
2005 15,110 26,260 17,061
2004 13,601 20,664 14,027
2003 11,845 N/A 13,052
45

The import price of chrome pigment was about 1.5 times more than the export price.

After the Spring Festival of 2005 the production cost of chrome pigment rose in vast scales
because of the price rise of nonferrous metals in international market including gold, copper,
zinc, aluminium and lead.

Plumbous chromate made of lead is the major constituent of chrome yellow and molybdate red,
and its cost accounts for about 50%-60% of the total production cost of the two ones. The price
of domestic lead increased almost RMB3,600/t than that at the end of 2005 which was about
RMB9,200/t, the growth rate reached 40%.

The growth rate of the price of sodium molybdate, one kind of raw material for producing
molybdate red, reached about 30%, and that of zinc oxide, one kind of raw material for the
production of inhibitive pigment, reached 20%.

- Organic pigment

Table 1-4-5 Import and Export price of organic pigment in the recent three years
Year Import price (USD/t) Export price (USD/t)
2005 5,520 4,330
2004 5,130 4,130
2003 N/A 4,050


46
I-5 Import and export situation of pigment in China

I-5.1 Titanium pigment

For a long time, China must import a large amount of titanium dioxide with high quality from
abroad to meet the domestic demand. During 1998~2004, the import volume of titanium
dioxide kept increasing at the average annual growth rate higher than 20%. However, the
import volume of titanium dioxide in 2005 decreased for the first time within the past eight
years, at the same time, the export volume increased at a very high year-on-year growth rate.

In 2005, China imported 227,736 tonnes of titanium dioxide at an average import price of
USD1,835/t, and totally exported 157,425 tonnes at the price of USD1,321/t. The import price
was 1.4 times as the export one. The export volume increased 67% over that in 2004, while
the import volume declined 9% than 2004. Several factors led to the different situation:

i) The output of home-made titanium dioxide grew rapidly and the quality was improved than
before, which led to the fact that home-made products substituted some of imported titanium
dioxide in some end use segments. As a result, the import volume decreased.

ii) The growth rate of domestic output was higher than that of consumption, so enterprises
turned to exploited international market for relieving domestic competitive pressure. The
average import price in 2005 increased 6% over that in 2004, while the average export price
increased 18%, the situation indicated that the gap between the import price and export price
is shrinking gradually.

Modes of trading

For a long time, the export volume of Chinese iron oxide, lithopone and Chrome pigment has
been far more than the import volume of them, however, the import volume of titanium dioxide
has always been larger than the export volume. Judging from the mode of trading, the import
business of titanium dioxide can basically keep balance with the export business because a
part of import business is carried out by the trading modes of processing and assembling trade,
processing with the imported materials, entrepot trade by bonded area, etc. In 2005, 66% of
importation trade of titanium pigment of China was carried out by ordinary trade, while 98% of
exportation trade was by ordinary trade mode. The modes of trading of titanium pigment in
China in 2005 are listed in the following table.

47
Table I-5.1-1 Trading modes of titanium pigment in China in 2005
Import Export
Mode of trading
Volume/t Proportion /% Volume/t Proportion /%
Ordinary trade 150,773 66.21 154,863 98.37
Processing with the imported materials 35,178 15.45 1,561 0.99
Entrepot trade by bonded areas 26,319 11.56 574 0.36
Processing and assembling trade 14,129 6.20 0 0
Others 776 0.34 1 0.01
Customs warehousing trade 560 0.25 124 0.08
Petty trade in the border areas 0 0 302 0.19
Total 227,735 100 157,425 100.00

Regions of trading

Among the trading regions, Asia takes the biggest share of trade volume of Chinese iron oxide
and titanium dioxide. Nearly 50 percent of the imported titanium dioxide in 2005 was from Asia,
which was at the same time the Chinese export destination with 40% of the exported titanium
dioxide of China. The second biggest importation region was Oceania, and the second biggest
exportation destination was North America. 31% of titanium dioxide exported by China in 2005
was consumed in North America.

Table I-5.1-2 Trading regions of Chinese titanium dioxide in 2005 (broken down by continent)
Import Export
Region
Volume/t Proportion /% Volume/t Proportion /%
Asia 114,622 50.33 63,565 40.38
Oceania 56,574 24.84 3,099 1.97
Europe 31,923 14.02 28,947 18.39
North America 22,316 9.8 48,932 31.08
Latin America 2,301 1.01 9,516 6.04
Africa 0 0 3,366 2.14
Total 227,736 100 157,425 100.00

Trading partners of Chinese titanium dioxide in 2005

As to the trading partners, the import trading partners are mainly Taiwan of China, Australia,
Japan and USA. The import volume of titanium pigment from the four countries in 2005
accounted for 75% of the total import volume. The most important export destination of
Chinese titanium pigment is the USA where 48,121 tonnes of titanium pigment was exported,
accounting for 30 percent of the total export volume. Export to other countries is comparatively
dispersive and generally lower than 7 percent of the total export volume.

48
Table I-5.1-3 Export destination of China’s titanium dioxide in 2005
Destination Export volume/t Proportion/%
America 48,121 30.57
South Korea 11,381 7.23
Turkey 9,996 6.35
Spain 9,176 5.83
India 8,563 5.44
Brazil 5,235 3.33
Thailand 4,503 2.86
Italy 4,132 2.62
France 4,105 2.61
Hong Kong 3,377 2.15
Malaysia 3,368 2.14
Pakistan 3,250 2.06
Japan 3,141 2.00
Australia 2,936 1.87
Russia 2,442 1.55
Indonesia 2,166 1.38
Taiwan, China 2,128 1.35
Belgium 2,037 1.29
Netherlands 2,021 1.28
Iran 1,988 1.26
Germany 1,904 1.21
Vietnam 1,849 1.17
Saudi Arabia 1,565 0.99
Bangladesh 1,224 0.78
Argentina 1,138 0.72
Philippine 1,135 0.72
England 1,099 0.70
Mexico 1,003 0.64
Nigeria 943 0.60
Singapore 925 0.59
Columbia 859 0.55
Canada 811 0.52
Egypt 775 0.49
Syria 766 0.49
Israel 679 0.43
Poland 580 0.37
Others 6,101 3.86
Total 157,422 100.00

49
Table I-5.1-4 Country/region where China imported titanium dioxide from in 2005
Country/region Import volume/t Proportion/%
Taiwan, China 61,898 27.18
Australia 56,552 24.83
Japan 29,035 12.75
USA 22,265 9.78
Germany 10,082 4.43
Malaysia 7,930 3.48
England 7,253 3.18
Saudi Arabia 6,223 2.73
Singapore 5,651 2.48
France 5,276 2.32
Spain 4,221 1.85
India 2,369 1.04
Mexico 2,280 1.00
Finland 1,907 0.84
Czech Republic 1,716 0.75
Others 3,078 1.36
Total 227,736 100.00

Trading customs of Chinese titanium dioxide in 2005

Major import customes of titanium dioxide in 2005 were Shanghai Customs and Huangpu
Customs. Export ones included Shanghai Customs, Qingdao Customs and Huangpu
Customs.

Table I-5.1-5 Importation Customs of titanium dioxide in 2005
Customs Import volume/t Proportion/%
Shanghai Customs 67,420 29.60
Huangpu Customs 50,441 22.15
Tianjin Customs 21,601 9.48
Shenzhen Customs 21,079 9.26
Guangzhou Customs 12,207 5.36
Qingdao Customs 7,822 3.43
Hefei Customs 7,820 3.43
Ningbo Customs 7,385 3.24
Nanjing Customs 6,886 3.02
Dalian Customs 6,759 2.97
Xiamen Customs 4,229 1.86
Gongbei Customs 2,657 1.17
Jiangmen Customs 2,458 1.08
Shenyang Customs 2,163 0.95
Chengdu Customs 1,460 0.64
Shantou Customs 1,042 0.46
Others 4,308 1.89
Total 227,736 100.00

50
Table I-5.1-6 Exportation Customs of titanium dioxide in 2005
Customs Import volume/t Proportion/%
Shanghai Customs 54,462 34.60
Qingdao Customs 38,063 24.18
Huangpu Customs 20,913 13.28
Nanjing Customs 10,188 6.47
Shenzhen Customs 9,068 5.76
Chongqing Customs 9,966 5.63
Tianjin Customs 6,471 4.11
Ningbo Customs 3,275 2.08
Dalian Customs 2,726 1.73
Guangzhou Customs 1,240 0.79
Shenyang Customs 560 0.36
Xiamen Customs 450 0.29
Hefei Customs 435 0.28
Chengdu Customs 320 0.20
Others 387 0.25
Total 157,425 100.00

Major importer and exporter of titanium dioxide in China in 2005

Along with the inpouring of foreign capital and then the enlargement of production scale in
domestic enterprises, more and more enterprises get self-support import and export right. So
exporters of pigments are generally pigment manufacturers or their trading companies. In
2005, there were 22 exporters who had their export volume of titanium dioxide exceeding
2,000 tonnes, and the total volume of titanium dioxide of them occupied 70% of countrywide
export volume. The major exporters of titanium dioxide in 2005 are listed in the Table I-5.1-7.

In general, the consumption volume of single consumer is small, which leads to the too high
import cost if the consumers independently import pigment. Therefore, importers of pigments
are usually trading companies. Only a few large enterprises import pigment by themselves.
The major importers of titanium dioxide in 2005 are listed in the Table I-5.1-8.

51
Table I-5.1-7 Major exporters of titanium dioxide in 2005
Exporter Export volume/t Proportion/%
Sichuan LOMON Corporation
17,189 10.92
Shandong Jinhong Titanium Dioxide Chemical Co., Ltd. 11,766 7.47
Shandong Jinan Yuxing Imp. & Exp. Co., Ltd.
8,868 5.63
Jiangsu Zhenjiang Fanhua Imp. & Exp. Co., Ltd. 8,717 5.54
Shandong Dongjia Group Co., Ltd. 6,723 4.27
Pan Gang Group International Trade and Economy Co., Ltd. 5,791 3.67
Pan Gang Group Chongqing Yugang Titanium Dioxide Co., Ltd. 5,703 3.62
Guangxi Dahua Chemicals Plant 4,529 2.87
Shanghai Siji Titanium Industry Co., Ltd. 4,130 2.62
Liaoning Maanshan Jinxing Chemical (Group) Co., Ltd. 3,835 2.43
Zhejiang Ningbo Xinfu Titanium Dioxide Co., Ltd. 3,334 2.11
Shanghai Jianghu Titanium Dioxide Chemical Products Co., Ltd. 3,329 2.11
Jiangsu Zhenjiang Titanium Dioxide Co., Ltd. 3,242 2.06
Guangxi Cangwu Shunfeng Titanium Dioxide Co., Ltd. 3,225 2.05
Guangzhou Zhujiang Chemical Group Co., Ltd. 2,440 1.55
SINOPEC Jiangsu Imp. & Exp. Co., Ltd. 2,392 1.52
Gansu Sangkai Commercial Co., Ltd. 2,296 1.46
Henan Luohe Xingmao Titanium Industry Co., Ltd. 2,266 1.44
Shandong Zaozhuang Tianyuan Fine Chemical Co., Ltd. 2,260 1.43
Henan Billions Chemicals Co., Ltd. 2,159 1.37
Guangdong Guangzhou Leitong Trade Co., Ltd. 2,127 1.35
Guangxi Tengxian Fuhua Chemicals Co., Ltd. 2,045 1.30
Others 49,059 31.16
Total 157,425 100.00

52
Table I-5.1-8 Major importers of titanium dioxide in 2005
Importer Import volume/t Proportion/%
Shanghai Hailuo Building Materials International Trade Co., Ltd.
16,100 7.07
Zhejiang Hangzhou Hemeng Chemical Raw Materials Co., Ltd. 15,445 6.78
Shanghai Yuanxin Imp & Exp. Trade Co., Ltd.
9,568 4.20
Shanghai Meililian Chemicals Trade Co., Ltd. 8,620 3.78
Guangdong Yuntianzhi Trade Co., Ltd. 6,220 2.73
Dupont Trade (Shanghai) Co., Ltd. 5,352 2.35
Sichuan Chengdu Shide Plastic & Rubber Industry Co., Ltd. 4,900 2.15
Fujian Sannong Chemicals Imp. & Exp. Co., Ltd. 4,524 1.98
Shanghai Sanchang Imp. & Exp. Co., Ltd. 4,340 1.90
China Agricultural Producer Goods Group C., Ltd. 4,288 1.88
Tianjin Tianbao International Logistics Co., Ltd. 4,099 1.80
Nippon Paint (China) Co., Ltd. 3,882 1.70
Guangdong Guangzhou Kemeiqi Chemical Industry Co., Ltd. 3,816 1.67
Guangdong Guangzhou Huasheng Paint and Pigments Co., Ltd. 3,720 1.63
Guangdong Dongguan Foreign Processing & Assembling Service Co., Ltd. 3,146 1.38
Guangdong Shenzhen Bao’an Foreign Economic Development Co., Ltd. 2,829 1.24
Jiangsu Huihong International Group Cotton Knitwear Imp. & Exp. Co., Ltd. 2,620 1.15
Guangzhou Huiyang Foreign Processing & Assembling Service Co., Ltd. 2,446 1.07
Guangdong Guangzhou Nippon Paint Co., Ltd. 2,380 1.04
Liaoning Shenyang Jin’ao Chemical Trade Co., Ltd. 2,320 1.02
Others 117,119 51.42
Total 227,736 100.00

Transportation modes of the international trade of titanium dioxide

Both imported and exported titanium pigments were mainly transported by sea.

Table I-5.1-9 Transportation mode of import & export of titanium dioxide
Import Export
Transportation mode Volume/t Proportion/% Volume/t Proportion/%
By sea 202,300 88.83 156,381 99.34
By road 25,351 11.33 683 0.43
By railway 60 0.03 3,556 0.23
By air 25 0.01 5 0.00
Total 227,736 100.00 157,425 100.00

53
I-5.2 Iron oxide pigment

Chinese iron oxide pigment contributes a great proportion to the global consumption of this
pigment. 2/3 of iron oxide pigment in the international market is made in China. In recent years,
Chinese iron oxide pigment has achieved great growth in both import and export.

Nevertheless, the annual growth rate of export volume turns to exceed that of import year by
year in the past. Iron oxide industry in China generally depends on export.

I-5.2.1 General situation of export and import

¾ General situation in the past

According to statistics from the Chinese Customs Bureau, China exported 312,675t iron oxide
in 2004 with export value about USD162 million. In 2005, 329,433t iron oxide pigment was
exported, namely 53% of the total output, which made export value of USD183,447,500.

Export volume of iron oxide grew quickly at a rate of 5.4% in 2005. Export value of iron oxide in
2005 was increased at a growth rate of 13.5% which was as twice as that of the export volume.
The difference between both growth rates resulted from the growth of export price. Export
price of iron oxide pigment was averagely increased more than USD40/t from USD516.73/t in
2004 to USD556.86/t in 2005.

As mentioned before, there is a gap between Chinese iron oxide and the world’s top grade one
in property, grade, price and service. Although China is the top country in producing iron oxide
pigment in the world and it exports it a lot, China still has to import high quality iron oxide
pigment to meet the domestic demand from such fields as top grade coatings, electronic and
magnetic materials, oil, chemical catalyzer, cosmetic and pharmaceuticals and so on.

In the past two years, China imported large quantities of iron oxide pigment than ever before.
Import volume was 197.324t in 2005 and 197,800t in 2004. In 5 years’ time, the import volume
of iron oxide pigment jumped up to as much as four times of the volume in 2001.

The situation of export and import in recent years is shown as follows:

Table 1-5.2.1-1 Export situation of iron oxide in recent years
Year Export volume (t) Growth rate of volume (%) Export value (USD) Growth rate of value (%)
2001 170,000 - 82,000,000 -
2002 200,000 17.6% 96,000,000 17.1%
2003 240,000 20.0% 109,000,000 13.5%
2004 312,675 30.3% 161,568,350 48.2%
2005 329,433 5.4% 183,447,500 13.5%

According to export situation in recent years, export price of iron oxide has begun to go up.
The average export price in 2005 was about 9-16% up from 2004. On one side, this is in
accordance with the price raise of international iron oxide series. On the other side, it not only
54
brings in more profit for the country, but also proves the successful development of Chinese
iron oxide industry. Chinese iron oxide is generally accepted and recognized in quality,
specification and application in the international market.

Table 1-5.2.1-2 Import situation of iron oxide in recent years
Year Import volume (t) Import value (USD) Growth rate of import volume (%)
2001 61,100 47,000,000 -
2002 96,400 61,000,000 57.8%
2003 138,200 69,000,000 43.4%
2004 197,800 82,393,490 43.1%
2005 197,324 87,463,360 -0.2%

¾ Import and export situation in 2006

It is estimated that the amplitude of export will continue exceeding that of import in iron oxide
industry. According to the import and export situation from January to June this year, the export
volume was increased by 11.9% and the export value was increased by 20% in the first half of
the year. In contrast, volume of import in the first half year was 6% off from 2005, and the value
was 4% off.

Table 1-5.2.1-3 Import and export situation of iron oxide in the first half year in 2006 and 2005
Export Import

2006
(Jan-Jun)
2005(Jan-Jun)
Growth
rate year
on year
2006(Jan-Jun) 2005(Jan-Jun)
Growth
rate year
on year
Volume 182,834.9t 163407.69t 11.90% 93467.78t 99500.753t -6.06%
value 105,933,600 88,328,500 20% 42,856,471 44,617,945 -4%

According to analysis of import and export situation of iron oxide in the first half year 2006, the
annual export volume will exceed 350,000t this year, and the export value will be over
USD200million. However, import of iron oxide will off from the volume n 2005. It is estimated
that the iron oxide industry will face a burden imposed on by export surplus.

I-5.2.2 Export destinations and import original regions of iron oxide pigment

The first major export destination of iron oxide is North America. China exported about
124,293t iron oxide to North America in 2005, of which 114,103t was exported to America,
amounting to 34.64% of the total exported iron oxide. And the export profit made in North
American market in 2005 reached about USD63,583,000. Export volume and profit of iron
oxide in North America in 2004 reached 112,769t and USD51,163,960 respectively.

Europe is the second region where China exported 82,553t iron oxide to in 2005 and export
value of USD46,632,000 was made there. Other major export destinations are Europe,
Southeast Asian and Middle East including Spain, UK, Germany and Canada and so on. The
situation of export according to destination in recent two years is shown as follows:
55

Table 1-5.2.2-1 Export situation in the seven export destinations in recent two years
2005 2004 Region
Export
volume(t)
Export value
(USD)
Average
price
(USD/t)
Export
volume(t)
Export value
(USD)
Average
price
(USD/t)
Average
growth rate
of price year
on year (%)
North
America
124,293 63,583,000 511.56 112,769 51,163,960 453.71 12.80
Europe 82,553 46,632,000 564.87 77,454 37,608,540 485.56 16.30
Southeast
Asian
56,183 36,548,000 650.52 62,810 36,201,190 576.36 9.50
Middle
East
22,993 12,899,000 561.00 19,454 9,965,188 512.25 11.40
Africa 22,201 11,978,000 539.52 16,904. 8,268,023 489.12 10.30
South
America
12,851 7,672,000 553.92 4,095 2,060,123 503.08 10.10
Oceania 7,358 4,135,000 562.03 7,897 3,984,129 504.51 11.40
Other 1,001 500 - 11,292 12,317,000 - -
Total 329,433 183,447,500 - 312,675 161,568,350 - -

Table 1-5.2.2-2 Export statistics of iron oxide pigment in China in 2005
Country/region Export volume (t) Proportion (%)
America 114,103 34.64
Hongkong 46,836 14.22
Spain 20,593 6.25
Germany 13,207 4.01
Canada 9,791 2.97
UK 8,408 2.55
Netherlands 8,339 2.53
Japan 8,126 2.47
South Korea 6,538 1.98
Turkey 6,496 1.97
South Africa 5,994 1.82
United Arab
Emirates
5,788 1.76
Australia 5,736 1.74
France 5,584 1.69
Other 63,894 19.40
Total 329,433 100.00

Iron oxide pigment is mainly imported from Hongkong, Taiwan Province, America, Japan and
South Korea. Imported iron oxide pigment from these five regions in 2005 amounted to nearly
80% of the total import volume. Hongkong is the region from which the Mainland of China
imports the most iron oxide with a volume of 48,795t in 2005. The following table shows the
import situation of iron oxide from main countries and regions in 2005.
56

Table 1-5.2.2-3 Import original regions of iron oxide in 2005
Country/ region Import volume (t) Proportion (%)
Kongkong 48,795 26.39
America 44,738 24.20
Taiwan 25,085 13.57
Japan 21,513 11.64
South Korea 15,861 8.58
Germany 8,099 4.38
India 3,807 2.06
Netherlands 3,029 1.64
Belgium 2,747 1.48
Poland 2,493 1.35
Canada 2,375 1.28
Thailand 1,973 1.07
Malaysia 1,294 0.70
Australia 1,068 0.57
Other 14,447 1.09
Total 197,324 100.00

I-5.2.3 Major provinces of import and export in China

Major export provinces and regions of iron oxide pigment in China are the main production
areas. Zhejiang Province is the top one where 119,478.635t iron oxide pigment was exported
in 2005, and export value of about USD61 million was made. The following is the export
situation of main provinces in recent two years.

57
Table 1-5.2.3-1 Export situation of iron oxide in major provinces in 2005 and 2004
2005 2004
Province and city Volume (t) Export value (USD) Volume (t) Export value (USD)
Zhejiang 119,478.635 61,043,625 118,633.940 58,334,136
Shanghai 92,563.330 53,095,632 85,240.690 45,685,759
Jiangsu 49,199.070 29,427,793 33,215.930 16,320,398
Shenzhen 21,065.430 14,596,223 21,798.440 14,477,570
Hunan 15,070.000 7,827,238 16,907.750 7,900,680
Guangdong 8,497.370 5,035,937 7,946.829 3,891,507
Hubei 5,163.880 2,758,051 4,846.540 2,405,385
Tianjin 4,070.700 1,815,490 9,660.440 4,000,624
Henan 3,898.000 1,877,656 5,061.745 2,376,674
Guangxi 3,461.000 1,815,418 2,050.301 1,060,542
Shaanxi 2,180.000 546,430 613.125 297,053
Anhui 1,990.000 1,044,731 2,235.788 1,157,001
Shandong 1,455.000 860,440 1,357.226 728,116
Hebei 443.900 253,309 666.983 364,512
Gansu 409.714 209,734 239.973 107,743
Jiangxi 121.000 67,244 145.500 76,085
Liaoning 119.120 87,979 155.680 112,991
Beijing 78.200 51,685 291.550 157,747
Zhuhai 70.600 46,746 12.600 3,034
Yunnan 27.000 38,491.000 - -
Jilin 26.000 9,060 54.600 62,842
Shanxi 22.000 11,086 20.000 11,210
Sichuan 20.000 6,546 69.100 34,620
Suzhou 3.800 12,060 9.168 6,509
Qingdao 0.013 36 50.000 26,140
Guangzhou - - 96.000 40,012
Fujian - - 184.550 52,293
Hainan - - 378.550 172,165
Dalian - - 54.000 32,854
Other - - 413.025 153,629
Total 329,433.000 183,447,640 312,675.000 161,568,350

Import provinces and cities of iron oxide are mainly located in coastal areas because of the
heavy demand in the course of economic development in these regions. For example,
Guangdong Province keeps the top one to import iron oxide pigment in recent years.

58
Table 1-5.2.3-2 Import situation of main provinces in 2004 and 2005
2005 2004 Province/
city
Volume (t) Sum (USD) Volume (t) Sum (USD)
Guangdong 64,838.30 46,169,350 54,331.48 4,534,572
Zhejiang 48,954.20 11,541,522 51,643.04 8,720,390
Jiangsu 29,805.70 13,318,355 26,180.19 9,934,502
Beijing 12,889.85 1,997,941 28,293.28 3,451,453
Fujian 9,356.70 3,405,326 5,336.55 1,763,384
Shanghai 7,820.50 3,795,261 6,590.65 3,937,329
Anhui 7,748.40 1,150,885 2,985.45 368,118
Shandong 6,473.90 1,883,804 7,403.92 2,434,572
Shaanxi 3,663.60 726,847 3,564.90 571,218
Xiamen 860.70 436,470 1.09 122,933
Shenzhen 739.80 1,178,009 1,648.26 2,934,222
Guangzhou 644.87 111,786 150.76 40,408
Henan 630.60 86,553 0.02 731
Sichuan 520.63 137,497 0.00 1,368
Hebei 480.30 308,859 865.11 301,714
Tianjin 445.88 226,194 49.98 139,947
Zhuhai 374.70 305,556 112.03 201,872
Hubei 313.56 46,586 4,315.49 402,717
Liaoning 258.60 60,424 47.96 96,258
Qingdao 186.80 57,692 4.10 11,153
Suzhou 173.70 428,353 8.72 30,276
Yantai 78.04 28,106 7.34 20,395
Hunan 42.34 15,768 1,131.49 484,935
Shantou 20.00 35,914 60.00 87,331
Dalian 2.46 9,284 1,527.52 754,587
Wuhan 0.08 1,021 1,357.56 205,344
Guangxi - - 176.00 24,445
Wuhu - - 2.00 4,400
Chongqing - - 0.04 640
Total 197,324.30 87,463,363 197,796.94 82,393,490

1-5.2.4 Export and import Customs for iron oxide pigment

Customs for exporting iron oxide pigment from China are mainly Shanghai Customs, Huangpu
Customs and Nanjing Customs. Major import ports are Shanghai Customs, Shenzhen
Customs and Ningbo Customs and so on. The following are specification of export and import
of iron oxide pigment in major ports in 2005.

59
Table 1-5.2.4-1 Export situation in major customs in 2005
Customs Import volume (t) Proportion (%)
Shanghai Customs 219,608 66.66
Shenzhen Customs 49,999 15.17
Ningbo Customs 31,273 9.49
Huangpu Customs 6,433 1.95
Changsha Customs 5,475 1.66
Tianjin Customs 5,298 1.60
Nanning Customs 3,336 1.01
Wuhan Customs 2,819 0.85
Guangzhou Customs 2,403 0.73
Nanjing Customs 1,247 0.38
Jiangmen Customs 713 0.21
Qingdao Customs 555 0.17
Kunming Customs 117 0.04
Other 157 0.04
Total 329,433 100.00

Table 1-5.2.4-2 Import specification in major customs in 2005
Customs
Import volume (t) Proportion (%)
Shanghai Customs 62,627 31.730
Huangpu Customs 32,153 16.290
Nanjing Customs 24,820 12.570
Guangzhou Customs 14,363 7.279
Tianjin Customs 11,821 5.990
Xiamen Customs 9,243 4.680
Shenzhen Customs 8,894 4.500
Ningbo Customs 8,683 4.400
Qingdao Customs 8,059 4.080
Jiangmen Customs 7,184 3.640
Xi'an Customs 3,958 2.010
Gongbei Customs 3,249 1.650
Beijing Customs 819 0.410
Hangzhou Customs 506 0.250
Wuhan Customs 335 0.170
Dalian Customs 287 0.150
Other 323 0.160
Total 197,324 100.000

1-5.2.5 International trading approaches of iron oxide pigment

There are mainly two channels to export and import iron oxide pigment in China in recent
60
years: direct trade and trade through agency.

9 Direct trade is to make tractions by iron oxide manufacturers themselves.
9 Trade through agency is that iron oxide manufacturers or end users assign
international trading companies as their agencies to export or import iron oxide
pigment,

Long ago, export and import of iron oxide pigment in China mainly depended on trading
company and agency. However, the self- export in recent years apparently takes on more.

After China entering the WTO to take part in the global competition, China enterprisers
including iron oxide manufacturers gradually become mature and have nurtured their business
capability and experience. Therefore, enterprisers of the iron oxide industry will be the key role
of international trading of iron oxide pigment.

Iron oxide pigment is exported and imported in several modes in China, such as ordinary
trading, processing with the imported materials and so on. The most common one is ordinary
trading mode, and the export volume by this mode in 2005 was 323,103t, amounting to
98.08% of the total export of iron oxide pigment.

Table 1-5.2.5-1 Trading modes of iron oxide pigments in China in 2005
Export Import
Mode of trading
Volume/t Proportion/% Volume/t Proportion/%
Ordinary trade 323,103 98.08 83,944 42.54
Processing with the imported materials
5,490 1.80 89,947 43.58
Petty trade in the border areas 196 0.06 83 0.04
Customs warehousing trade 118 0.04 85 0. 04
Processing and assembling trade 60 0.02 22,968 11.64
Entrepot trade by bonded areas 3 0.00 259 0.13
Exported Commodities for contracted projects 2 0.00 0 0.00
Other 0 0.00 38 0.00
Total 329,433 100.00 197,324 100.00

Table 1-5.2.5-2 Transportation modes of import & export of iron oxide pigment in 2005
Import Export
Transportation mode Volume (t) Proportion (%) Volume (t) Proportion (t)
By sea 165,193 83.72 323,888 98.32
By railway 0 0 3,882 1.18
By road 32,092 16.26 1,640 0.50
By air 42 0.02 12 0.00
Total 197,324 100.00 329,422 100.00

1-5.2.6 Application of exported iron oxide pigment

61
Currently, export volume of iron oxide pigment in China has exceeded 300,000t/a. Among
those exported, most of iron oxide pigment has properties suitable enough to be applied in
building and construction in the international market. Exported iron oxide pigment is
extensively used to paint brick, title, and concrete and wall and so on.

Although iron oxide pigment from China has better quality than before and is widely accepted
in the international market, there is still a deep gap between Chinese iron oxide and the world’s
top grade one. Exported iron oxide is still scarcely applied in top grade coatings, electronic and
magnetic materials, oil, chemical catalyzer, cosmetic and pharmaceuticals and so on.

1-5.2.7 Comparison of import and export prices

There is a typical feature on price of iron oxide foreign trade in recent years. Unlike any other
kinds of pigment, the import price of iron oxide is much lower than export price. In 2005 the
average import price was USD443.25/t, export price was USD556.86/t. Here is the general
situation of price in recent two years.

Table 1-5.2.7-1 Price of import and export in 2004 and 2005
Export price (USD/t) Import price (USD/t)
2005 556.86 443.25
2004 516.73 416.56
Growth rate (%) 7.80% 6.40%

1-5.2.8 Driving forces for import and export of iron oxide pigment

Import and export of iron oxide pigment of China in recent years have succeeded in achieving
apparent development. There are several factors driving the rapid growth.

9 Firstly, demand for iron oxide pigment from the international market increasingly grows,
which brings in opportunity and room for the development of its import and export.

9 Substantive investment in the industry from developed countries and multinational
companies also promotes the development. Several world-famous multinational
companies have invested in building iron oxide manufacturers in Mainland of China.
Therefore, the import growth of iron oxide in China was impelled by individual and joint
venture enterprises in the past three years. It is calculated that the import volume of iron
oxide from these enterprises in 2004 reached 60% of the total export volume.

9 Domestic demand for iron oxide with high quality is another reason for import
development. Grand projects such as Beijing Olympic Games in the 2008 and Shanghai
World’s fair in 2010 demand a great dear of high grade iron oxide pigment with unique
properties which has to be imported from abroad for infrastructure. In addition, China has
to import a large quantity of iron oxide pigment in urgent need for building materials.

1-5.2.9 Problems on foreign trade of Chinese iron oxide in 2006
62

Export of iron oxide in China has made achievement in promoting relevant fields to develop,
earning foreign exchange and stimulating region economic development. However, there are
still apparent and profound problems in the iron oxide industry, comparative interest can be
obtained through labor division of the globe. The following are some problems for Chinese iron
oxide pigment to export.

9 Sharp trading conflict

It is estimated that international antidumping, anti-subsidy and guarantee measure is
spreading from traditional labor- intensive industries to motor industry, apparatus and iron&
metal industry. Export value affected is up to USD5billion. What will directly affect the iron
oxide industry in China is that the law of REACH is to be implemented in the near future as
scheduled. Expense for iron oxide to export will be raised by the implementation this law.

9 Capacity surplus and unbalance between demand and supply

Chinese Commercial Affairs Department has ever surveyed over 900 series of products only to
find that scarce ones are in short supply. Investigation on those industries of overplus by the
State Development and Reformation Committee reveals that 11 industries are oversupply or
have the trend of oversupply. The iron oxide industry is also at the stage of oversupply, which
imposes pressure on export.

9 Influence from RMB appreciation

RMB appreciation which happens in these years brings in serious influence on the iron oxide
industry which is on the path of low –value export. Consequently, the whole industry of iron
oxide will have difficulty in exporting and absorbing oversea investment. Further more, the
capital will outflow, and trade deficit will happen.

9 Lack of concentration for the industry to export

Export of iron oxide pigment is not concentrated in China. There are about 140 manufacturers
producing iron oxide pigment in China at present. Currently, the average production scale of
these manufacturers is around 5,700t/a, and the average export volume of each is 2,360t/a.

There are about 40 export manufacturers of iron oxide in China, among which 10 have export
value exceeding USD1million. There are only three or four manufacturers with the export value
exceeding USD10 billion. Half of the export manufacturers have their export value below
USD500 thousand.

9 Poor independence of research and development

Independent research and development is poor in the iron oxide industry in China.
Competition in the industry depends on price war. Investment in researching in the industry is
insufficient. Far away from the investment of 20% of the sales profit in developed countries, the
63
investment of iron oxide in China is generally 2%-5%.

Iron oxide products in China lack of independent intellectual rights. Among the 330,000t
exported iron oxide pigment in China, few are brand products but most are primary products.

9 Others

Besides, uncertainty such as factors on processing trade policy will affect the industry as well.
Management, market strategy and establishment of modern enterprise system are to be
improved in the iron oxide industry.

Nevertheless, export of iron oxide industry in China has many advantages and is promising in
2006 in the whole. Export will go on growing although at a lower rate.
64
I-5.3 Lithopone

China is a net exporter of lithopone.

79,693 tonnes of lithopone was exported to oversea in 2005 which meant that 31.8% of the
national output was exported.

The top export destination of lithopone was Egypt, where the export volume reached 31,290
tonnes in 2005 accounting for 39.3% of the total exported lithopone.

Table 1-5.3-1 Export volume of lithopone in the recent three years (Unit: t)
Year 2005 2004 2003
Export volume 79,693 85,405 86,000

Table 1-5.3-2 Export destination of lithopone in 2005
No. Destination Export volume/t
1 Egypt 31,290
2 Belgium 9,959
3 Algeria 5,156
4 Thailand 3,200
5 Syria 2,981
6 Pakistan 2,870
7 Iran 2,547
8 Vietnam 2,441
9 India 2,377
10 Indonesia 2,109
11 Bangladesh 2,055
12 Morocco 1,130
13 Saudi Arabia 896
14 Italy 827
15 Greece 736
16 Russia 728
- Others 8,391
- Total 79,693

65
Table 1-5.3-3 Export destination of lithopone in 2004
No. Destination Export volume/t
1 Egypt 35,244
2 Belgium 9,975
3 Algeria 5,029
4 Iran 3,755
5 Syria 3,430
6 Thailand 2,867
7 Pakistan 2,794
8 Bangladesh 2,719
9 India 2,184
10 Vietnam 2,048
11 Saudi Arabia 1,858
12 Indonesia 1,567
13 Morocco 1,303
14 Brazil 1,302
15 Italy 1,135
- The other 48 destinations 8,195
- Total 85,405

Table 1-5.3-4 Active exporters of lithopone in 2005
No. Traders Export volume 05'/t
1 Guangdong Guangzhou Huali-sachtleben Chemical Co., Ltd. 25,053
2 Guangxi Wuzhou Yuanjiang Lithopone Co., Ltd. 9,263
3 Hunan Xiangtan Niutou Chemicals Co., Ltd. 4,751
4 Hunan Hengyang Meilun Pigmental Chemical Co., ltd. 4,273
5 Hunan Changsha Fengchao Pigment Chemical Co., Ltd. 4,234
6 Sinochem Tianjin Imp. & Exp. Corp. 2,754
7 Hunan Xiangtan Hongyan Chemical Co., Ltd. 2,592
8 Shenzhen Fujinhui Imp. & Exp. Co., Ltd. 2,296
9 Guangxi Xinhua Imp. & Exp. Co., Ltd. 2,284
10 Hunan Xiangtan County Foreign Economic Relations And Trade Corp. 1,895
11 Sinochem Guangdong Co. 1,509
12 Hunan Friendship & Apollo Co., Ltd. 690
13 Guangzhou Changjia Imp. & Exp. Co., Ltd. 661
14 Guangxi Liuzhou Zinc Products Group 657
15 Sinochem Shanghai Corp. 598
16 Hebei Hengshui Wukuang Chemical Co., Ltd. 594
- Others 15,589
- Total 79,693

66
I-5.4 Chrome pigment

9 Import analysis

China imported 2,916 tonnes of chrome pigment in 2005 which meant 12.1% of the national
chrome pigment consumption.

The top 3 import origins of chrome pigment were Hongkong, Holland and South Korea. The
import volume was 1,041 tonnes, 465 tonnes, 366 tonnes accounting for 35.7%, 16.0%, 12.6%
of the total import respectively.

9 Export analysis

China exported 15,511 tonnes of chrome pigment, 42.3% of the total output in 2005.

The top 3 export destinations of chrome pigment were Spain, Japan, and South Korea. The
export volume was 2,942 tonnes, 2,880 tonnes, 1,316 tonnes accounting for 19.0%, 18.6%,
8.5% of the total exported chrome pigment respectively.

The exported chrome pigment are middle-class, low-end, or primary products while the
imported are mainly upper-scale and scarce products with high-quality. Thus there is a deep
gap in price between the two.
67
Table 1-5.4-1 Import origins of chrome pigment in 2005
No. Origin Volume/t
1 Hongkong 1,041
2 Holland 465
3 South Korea 366
4 Brazil 169
5 Japan 161
6 Belgium 152
7 Germany 149
8 Canada 120
9 Taiwan 108
10 USA 51
11 Thailand 35
12 Italy 8
13 Spain 3
14 Indonesia 3
15 Malaysia 2
- Others 83
- Total 2,916

68
Table 1-5.4-2 Export destination of chrome pigment in 2005
No. Destination Volume/t
1 Spain 2,942
2 Japan 2,880
3 South Korea 1,316
4 USA 1,095
5 Russia 708
6 Vietnam 667
7 Canada 600
8 Malaysia 513
9 Thailand 465
10 Taiwan 454
11 Italy 386
12 Bangladesh 369
13 Indonesia 329
14 Iran 279
15 Germany 247
16 Ukraine 244
17 Holland 189
18 Belgium 79
19 Brazil 64
20 Hongkong 20
- Others 1,665
- Total 15,511

69
I-5.5 Organic pigment

The import volume of organic pigment decreased year by year with the annual growth rate of
-4.64% in the past three years, which showed that Chinese producers of plastic, ink and
coatings chose more qualified homemade organic pigment.

Most of the imported organic pigment were high-grade used in plastic, high-level coatings and
coatings printing etc.

In 2005, there were 7 import origins each having the import volume above 1,000 tonnes, while
there were 8 origins in 2004.

The imported organic pigment were mainly applied in plastic masterbatch and high-grade
coatings.
Table 1-5.5-1 Numbers of import origins of organic pigment in the recent three years
Year Import origin
2005 42
2004 46
2003 41

The export volume of organic pigment increased year by year with the annual growth rate of
11.8% in the past three years.

USA was the top export destination of organic pigment all the time in the past several years.

According to Chinese Customs’ statistics, the declared export volume exceeded the output in
several Sino-foreign joint ventures and foreign-owned manufacturers. Insofar as we can see,
their export volume of organic pigment accounted for above 90% of their output, much higher
than that of other Chinese producers, 10-40%.

Table 1-5.5-2 Numbers of export destinations of organic pigment in the recent three years
Year Export destination
2005 107
2004 97
2003 97

Table 1-5.5-3 Import and export details in the recent three years
Year Import/t Growth rate Export/t Growth rate
2005 31,215 -4.9% 114,664 8.2%
2004 32,833 -6.0% 105,987 23.7%
2003 34,929 -3.0% 85,691 4.5%



70
- Import analysis of organic pigment

Table 1-5.5-4 Import origins of organic pigment in 2005
No. Origin Volume (t) Price(USD/kg)
1 Taiwan 6,462.900 3.96
2 South Korea 4,642.300 3.35
3 Japan 4,622.100 8.19
4 Germany 3,286.800 8.41
5 USA 1,994.000 6.39
6 Hongkong 1,218.400 2.71
7 Indonesia 1,180.800 2.72
- The other 35 import origins 7,807.500 5.93
Total 31,214.800 5.52

Table 1-5.5-5 Import origins of organic pigment in 2004
No. Origin Volume (t) Price (USD/t)
1 Taiwan 8,033.5 3.67
2 Japan 4,638.8 7.39
3 Germany 2,888.1 9.12
4 South Korea 3,534.5 3.70
5 USA 2,287.5 5.20
6 Hongkong 1,634.0 3.09
7 Indonesia 1,375.3 2.55
8 England 1,147.2 5.50
- The other 38 import origins 7,294.1 5.27
Total 32,833.0 5.13

Table 1-5.5-6 Major import regions of organic pigment in China in 2005
No. Region Volume (t)
1 Guangdong Province 19,330.0
2 Shanghai City 4,198.8
3 Jiangsu Province 3,654.0
4 Shandong Province 1,033.0
- The other 19 import regions 3,000.0
Total 31,214.8

Table 1-5.5-7 Trade method of the imported organic pigment in 2005
No. Trade method Import quantity/t Import price (USD/kg)
1 Processing with imported materials 18,456.100 4.17
2 Ordinary trade 6,485.900 11.35
3 Processing and Assembling 5,711.600 2.89
4 Entrepot Trade by Bonded Area 490.100 9.57
- Other 71.200 7.80
Total 31,214.800 5.52
71
- Export analysis of organic pigment

Table 1-5.5-8 Export destinations of organic pigment in 2005
No. Destination Volume (t) Price (USD/kg)
1 USA 17,657.6 4.70
2 Japan 9,567.8 3.44
3 Germany 9,027.6 4.38
4 England 7,802.9 4.76
5 South Korea 7,056.5 4.15
6 Holland 5,894.6 4.37
7 Belgium 4,630.9 5.34
8 Indonesia 3,740.8 3.90
9 Hongkong 3,323.1 4.74
10 Italy 3,216.8 5.29
11 Malaysia 3,014.6 2.74
- The other 96 export destinations 39,730.9 4.24
Total 114,664.1 4.33

Table1-5.5-9 Export destinations of organic pigment in 2004
No. Destination Volume (t) Price (USD/kg)
1 USA 15,545.3 4.27
2 Germany 9,692.7 4.54
3 Japan 9,071.3 3.14
4 South Korea 8,070.2 3.58
5 England 6,999.0 4.65
6 Holland 5,598.6 4.45
7 Italy 3,399.0 4.84
8 France 3,352.9 2.86
9 Indonesia 3,314.1 4.08
10 Belgium 3,275.5 5.40
- The other 87 export destinations 37,668.4 4.14
Total 105,987.0 4.14

72
Table 1-5.5-10 Active export regions of organic pigment in China in 2005
No. Region Volume (t) Price (USD/kg)
1 Jiangsu Province 24,550.0 4.67
2 Shanghai City 24,400.1 4.57
3 Zhejiang Province 23,956.4 4.69
4 Guangdong Province 13,504.9 3.35
5 Shandong Province 10,098.5 3.73
6 Tianjin City 8,133.1 4.99
7 Heibei Province 5,568.9 3.07
- The other 19 export regions 4,452.2 3.92
Total 114,664.1 4.33

Table 1-5.5-11 Trade method of the exported organic pigment in 2005
No. Trade Volume (t) Price (USD/kg)
1 Ordinary trade 83,670.9 4.44
2 Processing with imported materials 27,985.6 4.04
3 Processing and Assembling 705.4 3.80
- Other 2,302.2 4.14
Total 114,664.1 4.33

73
I-6 Competitiveness of Chinese pigment industry

Along with the accelerating marketization of Chinese pigment industry, the industrial
competition among native pigment enterprises becomes very intensive. More enterprises will
be washed out because of the factors including environmental protection, high production cost,
quality of product, etc.

However, the real threat to Chinese pigment enterprises comes from the large multinational
enterprises.

The prices of energy sources and raw materials for pigment production rose in recent years, at
the same time, pigment industry in developed countries has already went into maturity age. It
was estimated that the average annual growth rate of pigment demand in developed countries
will be lower than 2%, so pigment enterprises in those countries may not invest into
capacity-enlarging projects in the future.

Such situation makes them pin their hope on Asia, especially on China, which leads to
unprecedented competition between Chinese and oversea pigment enterprises. For example,
some world-famous iron oxide manufacturers entered Chinese market in succession. Bayer of
Germany, Rockwood and Elementis of England have already established solely-funded
enterprises and joint ventures in developed coastal cities in China such as Shanghai City,
Fuyang City of Zhejiang Province, Changshu City and Taicang City in Jiangsu Province and
Shenzhen City. The coastal regions become the production bases of iron oxide pigment for
oversea enterprises whose production capacity reaches 120,000t/a, accounting for 15% of the
national capacity.

Similar to the situation of iron oxide, domestic titanium pigment industry is also challenged by
large multinational companies. On the basis of the publicized plans, during the “Tenth
Five-year Plan”, two ultra-large type Chlorination-Method Plants will be established. The two
plants include production base invested in by Dupont of America in Shandong Dongying and
production base invested in by Astron of Australia in Liaoning Yingkou. Total capacity of the
two plants is 400kt/a. The two projects will lead to the unprecedented competition in Chinese
titanium pigment industry, and even completely change the pattern of this industry.

At present, Chinese pigment industry is not so competitive in the international market. To
survive in the keen competition in the future, Chinese pigment enterprises had to conduct
technical innovation, environmental protection, improving quality of product.

74
51.2%
14.1%
7.3%
5.9%
3.9%
17.6%
Coatings Plastic Ink Paper Rubber Others
I-7 Consumption situation of pigment in China

I-7.1 Summary of consumption

The consumption of pigment in China increased in the past years, but the growing speed was
not even. The year-on-year growth rate in 2004 was 29.9%, while it was only 6.7% in 2005.
The increment of pigment consumption mainly comes from inorganic consumption growth
because inorganic pigments accounted for more than 90% of pigment consumption, even 95%
in 2004 and 2005.

In last year, the apparent consumption volume of pigment in China reached 1579,436 tonnes,
of which 1506,300 tonnes are inorganic pigment and only 73,136 tonnes are organic pigment.
This was just the same as the situation all over the world.

Pigment is chiefly consumed by coatings, plastic, ink, paper making and rubber industries,
which totally consumed 82.4% of pigment in 2005. Coatings industry was the biggest
consumer of pigment, occupying 51.2% of total pigment consumption volume.

The following table and figure showed the consumption volume and consumption structure of
pigment in China in the past.

Table I-7.1-1 Apparent consumption of pigment in China in the past
Apparent consumption (t)
Year
Inorganic pigments Organic pigments Total Grow rate
2001 887,823
48,177 936,000
N/A
2002
986,788 50,212 1,037,000
10.8%
2003
1,063,773 76,238 1,140,011
9.9%
2004
1,410,011 70,397 1,480,408
29.9%
2005
1,506,300 73,136 1,579,436
6.7%

Figure I-7.1-1 Consumption situation of pigment in China in 2005











75
I-7.2 Introduction to consumption situation of each pigment

I-7.2.1 Consumption situation of titanium pigment in China

As titanium dioxide is nontoxic with advantages of best opacity, white content and luminance
brightness, it is considered as the best white pigment in the world and is widely used in
coatings, plastic, paper making, ink, chemical fibre, rubber and cosmetic industries. Titanium
dioxide has two kinds of crystalline forms including Anatase (namely A type) and Rutile
(namely R type).

The following table showed the comparison of performance of Pigment White.

Table I-7.2.1-1 Comparison of main performance of Pigment White
Pigment
Density
(g/cm
3
)
Refraction
coefficient
Reducing power
(relative value)
Masking power
(relative value)
Titanium Dioxide Rutile 4.2 2.76 100 100
Titanium Dioxide Anatase 3.9 2.55 77 78
Zinc Sulfide 4.0 2.37 40 39
Antimony Oxide 5.67 2.09 17 15
Zinc Oxide 5.6 2.02 12 14
Zinc subcarbonate 6.1 2.00 9 12
Lead subsulfate 6.2 1.93 7 10
Lithopone 4.2 1.84 16 18

Among white pigments, titanium dioxide has the highest refraction coefficient which leads to
some good optical performance such as the best masking power (opacity) and reducing power.
It also has good white content, high luster and good dispersivity. In theory, the masking power
of Titanium Dioxide Rutile and Titanium Dioxide Anatase is 5.56 and 4.33, respectively, times
as that of ordinary lithopone. On the aspect of reducing power, Titanium Dioxide Rutile and
Titanium Dioxide Anatase are 6.25 and 4.81 times as ordinary lithopone.

Properties, such as white content, masking power, reducing power, dispersivity and chalk
resistance as well, of modern Titanium Dioxide Rutile has been improved to a vast extent. This
should be attributed to the persevering endeavor of titanium dioxide manufacturers in the past
90 years.

Consumption of titanium dioxide in China increased rapidly. In 1996, the consumption volume
of titanium dioxide in China was only 163kt, while it increased to 379kt in 2000. The CAGR of
titanium dioxide consumption volume was 23.5% during the “Ninth Five-year Plan”.
Consumption of titanium dioxide in China during 2001~2005 still kept increasing with the
CAGR of 13.6% although the speed of development was lower than that in the “Ninth
Five-year Plan”. The development speed of titanium dioxide consumption in China was much
faster than the average level in the world. The following figure shows the consumption
situation of titanium dioxide in China in recent years.

76
0
100
200
300
400
500
600
700
800
A
p
p
a
r
e
n
t

c
o
n
s
u
m
p
t
i
o
n
/
k
t
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
62.0%
18.0%
5.8%
5.8%
0.4%
4.0% 4.0%
Paint Plastic Paper Ink Rubber Chemical fibre Others
Figure I-7.2.1-1 Consumption volume of titanium dioxide in China in the past ten years











Titanium pigment was mainly consumed by coatings, plastic and paper making industries,
followed by ink, rubber and chemical fibre industries. The above industries generally need
Titanium Dioxide Rutile and some special Titanium Dioxide Anatase. In 2005, the apparent
consumption of titanium dioxide in China was 752,311 tonnes, of which 670,311 tonnes are
pigment grade (People usually call pigment grade titanium dioxide as titanium pigment).
Coatings (paint) industry is the No.1 end use sector of titanium pigment, approximately
accounting for 62% of total consumption volume. Coatings, plastic and paper making
industries totally consumed 85.8% of pigment grade titanium dioxide. Here is the
consumption pattern of titanium pigments in China in 2005.

Figure I-7.2.1-2 Consumption pattern of titanium pigment in China in 2005











- Coatings (paint) Industry

Coatings industry is the biggest consumption field of titanium pigment, especially Titanium
Dioxide Rutile. At the same time, titanium pigment also has the most application to coatings
industry in the pigment family. According to statistics in 2005, near 62% of titanium pigment
was consumed in coatings industry, reaching 416kt. Along with the development of Chinese
architecture and automobile industries, coatings industry brings heavier pressure on titanium
pigment on the aspects of quantity, quality and specification. Coatings that are made of
titanium pigment are technicoloured with many advantages including high masking power,
good tinctorial strength, etc. Besides the above, titanium pigment can also strengthen the
mechanical strength and adhesive attraction of lacquer film, prevent crackle, protect lacquer
film from ultraviolet and water, prolong the life of paint film.
77

Despite the fact that titanium pigment is expensive than ordinary lithopone in the international
market, coatings industry of developed countries mainly uses titanium pigment as white or
lightcoloured covering pigment and achromatic pigment. This happens because titanium
pigment has perfect performance and is absolutely nontoxic and people in the world prefer the
white or light color when they decorate things.

Titanium pigment is the basic white pigment of architectural coatings and important to maintain
the ornamental property, weather resisting property and chemical corrosion resistance of
coating. The annual consumption volume of titanium pigment in China is about 750kt, of which
150 kilo tonnes are used as architectural coatings. At present, both the quality and the
category of home-made Titanium Dioxide Rutile and Titanium Dioxide Anatase can meet the
demand from architectural coatings.

Besides architectural coatings, carpentry paint, shipping paint, container paint, automobile
paint and plastic paint also need lots of titanium pigment.

In recent years, Chinese coatings industry developed quickly. In 2005, the output and
consumption volume of coatings in China reached 3,830kt and 3,920kt. And the CAGR of
output and consumption volume in the past five years was 20.6% and 19.1%, respectively. In
the future, China will keep the increasing demand for coatings because of the fast
development of architectural, furniture and automobile industries, which strongly stimulates the
consumption of titanium dioxide. However, there are still some factors that slow down the
development of the coatings industry: some small enterprises with weaker competitiveness will
be washed out because the price of raw material rises up and the profit level declines; toys
decorated by plastic lacquer containing toxic materials will be strictly limited by EU. It is
estimates that the growth of coatings’ output in China in the future is slower than before, and
during 2006~2010, coatings’ output in China will increase with a CAGR of 11%.

Table I-7.2.1-2 Production and consumption situation of coatings in China in the past
Year Output/t Growth rate Consumption/t Growth rate
2001 181 -1.44% 195 -1.97%
2002 202
11.6%
214
9.7%
2003 242
19.8%
254
18.7%
2004 298
23.1%
309
21.7%
2005 383
28.5%
392
26.9%
CAGR in 2001~2005 20.6%
-
19.1%
-

- Plastic Industry

Plastic industry is the second biggest end use sector of titanium pigment. In 2005, around 121
kilo tonnes of titanium pigment was consumed in this industry, accounting for 18% of total
consumption volume.

Titanium pigment can be almost used in all thermoset and thermoplastic plastics, and it not
only gives plastic products bright color but also good intensity. Titanium pigment does not
78
influence the insulation property of plastic products. Titanium pigment is usually used in
polyolefin (mainly low density PE), PS, PVC, ABS.

Titanium pigment for plastic is mainly rutile type. However, many kinds of titanium pigment are
not directly applied to plastic processing but are firstly made into masterbatch in intermediate
plants and then sold to plastic fabrication plants. Prior to application, titanium pigment for
plastic is usually pre-treated on the surface by silicon or aluminum.

Plastic industry of China experienced rapid development in recent years. During the “Tenth
Five-year Plan” (2001~2005), the output of PE in China grew with an average growth rate of
11%. In 2005, China produced 5,030 kilo tonnes of PE and imported 5,260 kilo tonnes. It is
estimated that the output of PE in China will increase with a CAGR of 13.5% in the coming five
years and reach 9,450 kilo tonnes in 2010, and the apparent consumption volume of PE in
2010 will reach 17,000kt. The rapid development of PE industry in the future will largely
promote the consumption of titanium pigment.

At the same time, PVC industry in China also developed in the past, and domestic output
increased from 3,096kt in 2001 to 6,500kt in 2005, with the average growth rate of 2.4%. The
apparent consumption volume of PVC in 2005 was 7,500kt. It is estimates that the demand for
PVC in China will increase with the CAGR of more than 13% and reach 13,800kt in 2010.

Besides PE and PVC, other plastics will also develop rapidly in the future, which stimulates the
consumption of pigment especially titanium pigment.

Table I-7.2.1-3 Production and consumption situation of PE & PVC in China in the past
PE PVC Year
Output
(Unit: 10kt)
Growth
rate
Consumption
(Unit: 10kt)
Growth
rate
Output
(Unit: 10kt)
Growt
h rate
Consumption
(Unit: 10kt)
Growth
rate
2001
308 2.8% 719 20.7% 310 17.0% 557 22.9%
2002
355 15.2% 810 12.6% 355 14.8% 577 3.6%
2003
411 15.8% 879 8.5% 401 12.8% 625 8.5%
2004
432 5.1% 910 3.5% 503 25.5% 710 13.5%
2005
503 16.6% 1,024 12.5% 650 29.2% 750 5.7%
CAGR in
2001~2005 13.0%
-
9.2% - 20.4% - 7.7%
-

- Paper making Industry

Paper making industry is the third biggest end use sector of titanium pigment. As the filler of
paper, titanium pigment is mainly used in high-class paper and thin paper. In general, titanium
pigment for paper making is Titanium Dioxide Anatase without superficial treatment which can
fortify the white content of paper. But laminated paper needs Titanium Dioxide Rutile with
superficial treatment for better light-resistant and heat resistant properties.

In 2005, the consumption volume of titanium pigment for paper making was about 38.9kt,
79
accounting for 5.8% of the total consumption volume.

Here is the quality standard of titanium pigment for paper making

Table I-7.2.1-4 Quality standard of titanium pigment for paper making
Item Index
Content of TiO
2
/% 98 ≧
Volume mass/ kg·m
-3
3.9
Granularity /μm 0.15~0.20
Refraction index 2.55
Dispersion coefficient 4.3~5.1
White content /% 95 ≧
Particle figure Globose
Water-soluble substance /% <0.3

Besides the major three end use sectors including coatings, plastic and paper making, titanium
pigment can be also applied in many other sectors such as ink, rubber, textile, chemical fibre
and cosmetics industries.

- Ink Industry

When producing ink, pigment is one of key factors that decide the quality of ink. Titanium
pigment is the indispensable material to produce high-class ink. Ink containing titanium
pigment does not change color, has good superficial wettability and is easy to disperse.

Although functioning mechanism of titanium pigment in ink is similar to that in coatings, the
volume concentration of pigment in ink is very high. For example, sometimes, the content of
titanium pigment in ink reaches 55%. In this case, titanium pigment can present high luster and
high masking power only when its particle size is small and even and its dispersivity is good.
Generally, ink used for metal employs rutile type titanium pigment, while ink for intaglio and
relief printing employs anatase type titanium pigment because it is comparatively soft which
leads to more slight abrasion of roller.

In the past five years, ink output in China increased with the annual growth rate higher
than10%, and the consumption volume increased with annual growth rate of higher than
13.2%. To 2005, the output of ink reached 302kt. Here is the production and consumption
situation of ink in China.

80
Table I-7.2.1-5 Production and consumption situation of ink in China in 2001~2005
Year Output/t Growth rate Consumption/t Growth rate
2001 205,000 10.8% 220,000 N/A
2002 220,000
7.3%
242,000
10.0%
2003 246,000
11.8%
274,000
13.2%
2004 258,000
4.9%
288,000
5.1%
2005 302,300
17.2%
361,000
25.3%
CAGR in 2001~2005 10.2%
-
13.2%
-

In 2005, titanium pigment for ink amounted to 38.9kt, approximately accounting for 5.8% of
total consumption volume. It is estimated that Chinese demand for ink in the next five years will
increase with an average annual growth rate of 10%, and to 2010 will reach 580kt.

- Textile and chemical fibre industry

Another important consumption field of titanium pigment (especially anatase type titanium
pigment) is textile and chemical fibre industry. Titanium pigment is used as “flatting agent” in
synthetic fibre. The refractive index of titanium pigment is quite different from that of fibre,
which leads to a perfect flatting effect. Titanium pigment is considered as the best flatting
material.

Although the refractive index of titanium dioxide rutile is higher than that of titanium dioxide
anatase, rutile is not soft like anatase. Granule of titanium dioxide rutile may fray the spinning
nozzle and diffusion knife, so textile and chemical fibre industry usually uses titanium dioxide
anatase. Titanium pigment for chemical fibre generally does not need superficial treatment.
Since 2001, Chinese output of chemical fibre has been No.1 in the world. At present, the
demand for titanium pigment used as flatting agent approaches 30kt.
Technological index of titanium pigment for chemical fibre is more rigorous than that of
ordinary anatase type titanium dioxide.
For many years, China has to import titanium pigment for chemical fibre at a high price. In the
beginning of 1980s, Nanjing Grease Chemical Plant established a production line of titanium
pigment for chemical fibre with the capacity of 1,000t/a and produced AH-1 titanium pigment
for chemical fibre. No.404 Factory of Ministry of Nuclear Industry also produced a small
amount of titanium pigment for chemical fibre in the 1990s. And then domestic organizations
made remarkable progress on the aspect of the production of titanium pigment for chemical
fibre.



81
- Other end use segments of titanium pigment

Table I-7.2.1-6 Other end use segments of titanium pigment
End use segments Remark
Pharmacy Titanium pigment is used as colorant in tablet, capsule, cream, etc.
Foodstuff Because of its nontoxicity, titanium pigment is used as food additive and packaging material
foodstuff.
Cosmetic Titanium pigment is widely used in cosmetics because of its whiteness, nontoxicity, high
masking power and ultraviolet resistance.
Leather Titanium pigment is used in white or colour ointment for leather.
Stationers goods Titanium pigment is used in art paints, crayon, pencil, water-based greasepaint.

82
I-7.2.2 Consumption situation of iron oxide pigment in China

With many advantages, iron oxide pigment is the most common color pigment. The apparent
consumption volume of iron oxide pigment produced in China reached 490,591 in 2005 and
430,125 in 2004. In the whole, the consumption volume in the past several years increased
year by year. The annual growth rate in 2004 and 2005 were respectively 14.1% and 20.1%.

Table I-7.2.2-1 Consumption of iron oxide pigment in China in recent years
Year Apparent consumption (t) Growth rate of consumption (%)
1997 256,000
-
1998 278,000 8.60%
1999 350,000 25.90%
2000 396,000 13.10%
2001 256,100 -35.30%
2002 312,400 22.00%
2003 358,200 14.70%
2004 430,125 20.10%
2005 490,591 14.10%

¾ Application fields

Iron oxide pigment is the most common color pigment extensively used in caoatings and paint,
architecture and building, rubber and plastic, paper making, ceramics chemicals and so on.

9 Pigmentation for cement goods and building structure as follows:
- The surface of all kinds of building structure, such as wall, ground, ceiling, pillar,
station and so on.
- All kinds of building materials, such as brick, face brick, canal, terra, man-made
marble and so on.

9 Pigmentation and antirust of paint and spray paint:
- Magnetic paint, blending paint, baking finish, spray paint, antirust paint and shipping
paint

9 Pigmentation for rubber products:
- The inner tube of a tire (such as :automobile, plane, bicycle), gloves, hot-water bottle,
in sudation material, stationery, waterproof cloth and so on

9 Pigmentation for plastic products:
- Thermosetting plastic: such as amino-plastic, phenolic-plastic, and so on.
- Thermo plastic: such as polystyrene plastic, soft and hard PVC, and so on

9 Others:
- It is used to color and polish ceramic, enamel and glass.
- It is used to make rub piece and printing ink.
83
Paper
10.6%
Rubber&Plasti
c 13.4%
Other
1.3%
Coating&Paint
39.9%
Architectural
material
34.8%
Antitarnish
32.0%
Architectural
37.0%
Furniture
10.0%
Auto
5.0%
Industrial
11.0%
Plastic
3.0%
Other
2.0%
- It is used to color ferric magnetism materials and feed, food stuff, and medicine.

Actual consumption of iron oxide pigment in 2005 was 433,800t. Generally, it is mainly
consumed in these fields including architectural materials (construction), coatings and paint,
rubber and plastic and paper-making. Coatings & painting and architecture are the two major
application fields of iron oxide.

Table I-7.2.2-2 Consumption volume of iron oxide pigment in each application field (Unit: t)
Year Coatings &paint Architecture Rubber & plastic Paper-making Other Total*
2003 131,000 115,000 40,000 22,000 45,000 353,000
2004 168,000 150,000 56,000 37,000 14,000 425,000
2005 173,000 151,000 58,000 46,000 5,800 433,800
* These quantities do not include the storage of the year.

Figure I-7.2.2-1 Consumption pattern of iron oxide pigment in China in 2005











In 2005, coatings & paint consumed about 173,000t iron oxide pigment, amounting to 39.9% of
its total output; architectural materials consumed about 150,000t iron oxide pigment. These
two fields totally amounted to about 74.7% of the consumption. Consumption by rubber &
plastic and paper-making was respectively 13.4% and 10.6% of the total. Consumption in
other fields amounted to 1.3%.

The application proportion of iron oxide products used in the coatings industry is shown in the
following figure. The development of coatings industry compels iron oxide pigment to grow.

Figure I-7.2.2-2 The application proportion of iron oxide products used in the coatings industry










84

As people’s consumption concept is experiencing tremendous transformation, the
development of the coatings industry will surely provides a lot for the iron oxide pigment.

During 8 years between 1997 and 2004, the output of coatings was fourfold. Some coatings in
China have already caught up the standard of that in developed countries. China will be an
important base for producing coatings. This will promote the development of the iron oxide
industry.

There will be a great demand for iron oxide pigment from coatings in the future. It’s estimated
that the requirement will grow at a rate of 10%. In 2002, about 143,800t iron oxide products
was applied in coatings and building materials. The quantity was increased 18.2% to 170,000t
in 2004.

Nowadays, iron oxide pigment applied for architecture is about 35% of that applied in coatings
industry. Pigmentation for fashionable architectures, squares, roads and so on is inclined to
applying colorful painting instead of single gray. Iron oxide pigment is widely applied for color
cement block, color wall-brick, color concrete road surface. In recent two years, more than
60,000t/a iron oxide pigment were used in architecture industry.

¾ Application of each kind of iron oxide pigment

Due to different properties and features, different kinds of iron oxide pigment have their own
typical application.

Here is application situation of each kind of iron oxide pigment:

9 Iron oxide red pigment is widely applied for coatings including water inside and outside
wall coatings and paints including surface paints and basic paints such as alcohol acid,
and amidogen.

Iron oxide red pigment can be used for pigmentizing building materials such as tile,
mosaic brick, water-milled stony ground and concrete products.

When applied for pigmnetizing plastic products, iron oxide red pigment protects the color
from fading. And it can be used to pigmentize the surface of rubber products and rubber
filling stuff to strengthen its endurance. Besides, it is also extensively used to pigmentize
various color paper.

In addition, iron oxide pigment can be used to test that to what extent the machine is
damaged with the property of magnetism.

9 Iron oxide yellow has the light yellowish brown color。 This durable and cheap pigment
absorbs ultraviolet radiation and has low water solubility. It is extensively used for
matching colors in construction and building.

85
9 Iron oxide black is also very stable to alkaline, acid and light. It disperses easily and has
low oil absorption property. It can avoid color-floating or seeping due to its density.
Therefore, iron oxide black is an ideal pigment for concrete painting.

¾ Consumption trend of iron oxide pigment in China in future

The sales volume of iron oxide pigment in China in 2005 was 570,000. By contrast with 2004,
the output and sales volume of iron oxide pigment in 2005 both were increased in a certain
degree. However, there was a large quantity of storage as a result of the gap between the
growth rate output and that of sales volume.

Table I-7.2.2-3 Production and market of the iron oxide industry in China in 2004 and 2005
Item 2005 2004 Year on year (%)
Production capacity (t/a) 800,000 700,000 14.3
Quantity of manufacturers 140 145 -3.4
Average capacity of each manufacturer (t/a) 714 4827 18.3
Output (t) 622,700 545,000 14.3
Operation rate (%) 78 80.1 -
Proportion of output (%) 40 41.7 -
Sales volume (t) 567,700 540,000 5.1
Ratio of sales to production (%) 91 99 -
Domestic sales volume (t) 238,200 227,400 4.8
Storage (t) 55,000 5,000 1,000
Export volume (t) 329,422 312,648 5.4
Import volume (t) 197,324 198,140 -6.7
Average export price (USD/t) 557 517 7.7
Average import price (USD/t) 459 416 10.3
Import price /export price 0.82 0.8 -
Sales value (RMB) 2,542,000,000 2,300,000,000 10.5
Apparent consumption (%) 478,000 430,500 11.2
Global consumption (t) 1,200,000 1,171,400 2.4
Ratio of domestic to global consumption (t) 38.9 19.4 -
Rate of contribution to the world (%) 51.9 38 -

The prospect of iron oxide pigment in China is promising as some major consumption fields
such as coatings and painting develop rapidly.

There will be a great demand for iron oxide pigment from coatings in the future. It’s estimated
that the requirement will grow at a rate of 10%. It’s estimated that the annual demand of iron
oxide pigment in 2015 may reach 260,000t.

Recently, with the rapid development of architecture industry, iron oxide pigment comes across
a new opportunity in its growth.

86
¾ Consumption of iron oxide pigment in the international market

About 1,000,000t/a iron oxide pigment is consumed all over the world, with
600,000-650,000t/a used for painting.

In the world, iron oxide is mainly consumed in America, Western Europe and Japan. From the
1990s on, 200,000-250,000t/a iron oxide pigment is consumed in America, and
250,000-370,000t/a in Western Europe.

Architechture (building material) is the largest application field of iron oxide pigment in the
world. The global consumption in this field amounts to 53% of total iron oxide products.
Coatings is the second with a proportion of 33%, plastics and rubber both amount to 5%, the
rest 9% is other fields.

Most iron oxide products are applied for architecture in the world. Nevertheless, due to
differences in economic development, consumption custom, and development of industries,
consumption patterns of each country in the world are different.

In Western Europe, requirement for iron oxide pigment from architecture is the largest,
amounting to 60% of the total consumption. Then is the demand from coatings with the
consumption volume about 150,000-225,000t/a.

America consumes about 68,000-85,000t/a iron oxide pigment for architecture, amounting to
34% of the total consumption. The coatings industry consumes about 46,000-68,000t/a iron
oxide pigment in America.

Similar to the situation in Europe, Canada mainly applies iron oxide pigment for architecture,
with 65% of its production used for concrete. In Austria, transaction volume is around
15,000-20,000t/a, of which 12,000t is imported. Its architecture consumes most of iron oxide
pigment.

However, consumption pattern of iron oxide in Japan is opposite to that in Occident.
Architecture consumes only a small proportion of iron oxide pigment in Japan. The largest
application field is magnetic materials, which consumed 84% iron oxide pigment in the 1990s.
The second was coatings amounted to 6.8%.

87
Paint 35.0%
coating 41.0%
other 8.0%
plastic 16.0%
140,000
149,813
170,000
3.7%
7.0%
13.5%
0
50,000
100,000
150,000
200,000
2003 2004 2005
C
o
n
s
u
m
p
t
i
o
n
/
t
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
G
r
o
w
t
h

R
a
t
e
,

%
I-7.2.3 Consumption situation of lithopone in China

As a large market of lithopone, China consumed 170,000 tonnes of lithopone in 2005, about
78% of the global consumption volume.

Figure I-7.2.3-1 Consumption of lithopone in China, during 2003-2005











Lithopone is applied in many fields including coatings, paint, plastic, paper, ink, printing paste
and so on. Among these, coatings and paint are the major fields, and their consumption of
lithopone in 2005 respectively accounted for 41.0% and 35.0% of the total.

Figure I-7.2.3-2 Consumption pattern of lithopone in China, 2005











88
I-7.2.4 Consumption situation of chrome pigments in China

As a large market of chrome pigments, China consumed 24,000 tonnes of chrome pigments in
2005, about 24% of the global consumption volume.

Chrome pigments are applied in many fields, including coatings, ink and plastic and so on.

Chrome pigments are widely used in coatings, such as architectural coatings, industry
coatings, wood coatings, anticorrosive paint, and traffic paint and so on.

Chrome pigments are consumed in the following plastic sectors: PE, PP, PVC, ABS, PS, PC,
PU and so on.

89
76,238
70,397
73,136
51.8%
-7.7%
3.9%
0
20,000
40,000
60,000
80,000
2003 2004 2005
C
o
n
s
u
m
p
t
i
o
n
/
t
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
G
r
o
w
t
h

R
a
t
e
Coating
15.7%
Ink 67.0%
Other 7.3% Plastic
10.0%
I-7.2.5 Consumption situation of organic pigment in China

As a large market of organic pigment, China consumed 73,136 tonnes of organic pigment in
2005, about 4.6% of the national pigment consumption.

Figure 1-7.2.5-1 Consumption of organic pigment in China, 2003-2005











Organic pigment is applied in many fields, including ink, coatings, cosmetics, textile and
stationery and so on. Among these, ink, coatings and plastic are the major fields, whose
consumption of organic pigments in 2005 accounted for 67.0%, 15.7% and 10.0% of the total
organic pigments consumption respectively.

Table 1-7.2.5-2 Consumption pattern of organic pigment in China In 2005










- About DPP pigment

DPP pigment is mainly used for industrial paint especially finish coat and refinishing paint for
auto production.

In Chinese finish coat for auto production mainly depended on imported ones, thus domestic
consumption of DPP pigment in auto industry was limited, ink and plastic industry were the
major consumption fields.

90
I-7.3 List of major end users

Table 1-7.3-1 Major end users of pigment in China
No. Company Product Capacity(t/a)
II-2.1 Nippon Paint Co., Ltd. coatings 250,000
II-2.2 Beijing Meichao Finishing Material Co., Ltd. coatings 100,000
II-2.3 Guangdong Huarun Paints Holdings Co., Ltd. coatings 80,000
II-2.4 Shandong Lehua Group Co., Ltd. coatings 80,000
II-2.5 Shanghai ICI Swire Paints (Shanghai) Co., Ltd. coatings 100,000
II-2.6 Hong Kong Hempel-Hai Hong (China) Ltd. coatings 90,000
II-2.7 Shandong Changyu Group Co., Ltd. coatings 40,000
II-2.8 Shanghai Coatings Co., Ltd. coatings 40,000
II-2.9 Shanghai Cosco Kansai Paint Co., Ltd. coatings 40,000
II-2.10 Chongqing Hongqi Paints Co., Ltd. coatings 40,000
II-2.11 Changzhou Guanghui Chemical Co., Ltd. coatings 30,000
II-2.12 GuangDong Maydos Chemical Group coatings 60,000
II-2.13 Hunan Xiangjiang paint Group Co., Ltd. coatings 80,000
II-2.14 Tianjin Toyo Ink Co., Ltd. ink 27,000
II-2.15 Hangzhou TOKA Ink Chemical Co., Ltd. ink 20,000
II-2.16 Shanxi Taiyuan Coates Lorilleux Chemicals Ltd. ink 20,000
II-2.17 Zhejiang Yongzai Chemical Industry Co., Ltd. ink 15,000
II-2.18 Shanghai Peony Printing Ink Co., Ltd. ink 15,000
II-2.19 Yip's Ink & Chemicals Co., Ltd. ink 15,000
II-2.20 Shanghai DIC Ink Co., Ltd. ink 15,000
II-2.21 Anhui Wuhu Conch Profiles and Science Co., Ltd. plastic profiles 600,000
II-2.22 Dalian Shide Plastics Industry Co., Ltd. PVC profiles 600,000
II-2.23 Liaoning Zhongwang Group plastic profiles 400,000
II-2.24 Koemmerling (Tianjin) High Polymer Molding Co., Ltd. PVC window & door profiles 300,000
II-2.25 Shandong Chenming Paper Industry Group paper 3,000,000
II-2.26 Shandong Huatai Group Co., Ltd. paper 1,200,000
II-2.27 Golden East Paper (Jiangsu) Co., Ltd. paper 2,000,000
II-2.28 Shandong Sun Paper Industry Joint Stock Co., Ltd. paper 1,000,000
II-2.29 ShangHai YiHua Rubber Products Factory rubber products N/A
II-2.30 Hebei North China Rubber Factory rubber products N/A

91
I-8 Problems existing in pigment industry

At present, Chinese pigment industry has some common problems as follows:

- Most pigments are middle and low-end products, which results in low competitive strength
in the global market. Many high-class pigments still rely on importation. Market price can
clearly indicate the difference between home-made and oversea pigments. For example,
except for iron oxide, the import prices of pigments are usually 1.5 times as the export
price.

- Each pigment manufacturer feels unprecedented pressure of environmental protection. The
cost for environmental protection is going up swiftly. As a matter of fact, a part of pigment
enterprises have been or are going to be shut down because they did not conform to the
rigorous requirement of environmental protection. For instance, near 20 titanium dioxide
manufacturers were shut down in the past three years due to their poor measures of
environmental protection.

- The markup of raw materials and energy leads to the decreasing profit of pigment industry.
The majority of raw materials for pigment production are not reproducible resources such
as mine resources or petroleum.

Besides the above, different pigment has specific problems. For instance, although China is
one of the countries that own the most abundant titanium resource, more than 90% of titanium
ore is symbiotic mine in which the content of titanium dioxide is low and its components are
complex. Specifically, little titanium raw material is suitable for Chlorination Method.

Another problem is that the technological structure of Chinese titanium pigment is
unreasonable. In China, 98 percent of capacity is adopting Sulfuric Acid Method, but only one
company adopts Chlorination Method. However, in international market, the capacity of
titanium pigment by Chlorination Method has occupied 60% of global capacity. Dupont
Company, the biggest manufacturer of titanium pigment in the world, owns the capacity of
1,000kt/a all of which adopts Chlorination Method.

As to iron oxide pigment, its export volume is huge, accounting for about 53% of annual output.
This situation indicates that Chinese iron oxide excessively relies on export. The overplus of
capacity is another problem of iron oxide industry. In 2005, the capacity of iron oxide in China
was 800,000t/a, 180,000 tonnes more than the output in the same year.

Like lead, chrome is heavy metal and harmful to human bodies. Its production may cause
serious environmental pollution. To treat the pollution costs much and imposes heavy burden
on producers.

Most manufacturers can not export their organic pigments independently. Instead, they
depend on trading companies, which reduces the foreign exchange earn through export.


92
I-9 Governmental policies about pigment industry and their influence

To solve effectively the problems in pigment industry, governments and related organizations
took a series of measures.

Titanium dioxide

In July 2005, Chinese governmental issued a regulation in which titanium pigment projects
with the capacity being no larger than 3,500t/a will not be allowed, because the too small
factories usually can not effectively treat wastes but lead to serious environmental pollution.

Iron oxide

¾ Agreement of Chinese Coatings Industry Association

To ensure the fine development, the Committee Meeting of Chinese Coatings Industry
Association concluded three agreements in 2006: Firstly, to strictly limit the installation
construction of iron oxide production with capacity below 5,000t/a; secondly, to turn over the
situation of dependence on exporting; the third, to control production volume from the root.

9 Control of production installation

Early this year, the state issued a policy to forbid construction of installation with capacity
below 5,000t/a for producing iron oxide. Now that production with equipment of low capacity
causes serious pollution to environment, high cost and energy waste and so on, installations of
small-scale capacity is not allowed from then on.

The State Department orders local governments strictly put the policy into effect. New projects
short of legal condition won’t be approved or authorized. Unqualified manufacturers will be
washed out or stopped. Some will be recombined or reformed in the near future.

9 Turnover of independent situation

As calculated, the production volume of iron oxide pigment in China in 2005 was 622,700t, the
import volume was 197,300t, and the export volume reached 329,400t. At present, most
private manufacturers of iron oxide in China depend on export and they have no share in
domestic market. Therefore, these manufacturers will be heavily shacked once the
international demand experience change.

To survive any suffering from the international market, the government suggests these
manufacturers improve their technology to meet the need of domestic demand.

9 Control of production volume

On one side, China is a large country exporting iron oxide. On the other side, exported iron
oxide products from China are mainly of medium and low grade, and are not competitive
93
globally.

On the same time, Chinese iron oxide pigment is oversupply in domestic market. In order to
survive, manufacturers conduct price war, which results in inefficiency of the whole industry
domestically. Therefore, they are required by government to control the production volume and
product quality.

¾ Cost on environmental protection and natural resources

Since the central government set up the concept of Harmonious Development, China’s
development has turned to pursue sustainable development shifting from simply focusing on
economic growth. After this transit, cost for development rises in China.

To realize the transfer of development mode set up by the government, enterprises of iron
oxide pigment have to burden the cost of environmental protection which was imposed on
society ever before. Insufficient supply of national resource and energy also require
manufacturers pay high expenses.

94
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500
1,000
1,500
2,000
2,500
3,000
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2006 2007 2008 2009 2010
Inorganic pigments Organic pigments
I-10 Future forecast on pigment industry in the next five years

I-10.1 General situation of Chinese pigment industry in the future

At present, China has become the largest producer of iron oxide, lithopone, chrome pigment
and organic pigment in the world. China has the output of titanium dioxide only second to the
United States.

Along with the swift development of downstream industries such as coatings, plastic, ink,
paper making and rubber industries, Chinese pigment industry will keep rapid development in
the future. Compared with the international market, Chinese market is more attractive to those
large multinational pigment manufacturers who are transferring more capacity of pigment to
China. China is turning to be a global production center and crucial sales market of pigment.

In the future, export of Chinese pigment will keep mighty increment. For a long time, the export
volume of iron oxide, lithopone and chrome pigments has been much higher than their import
volume, only titanium pigment has a larger import volume than its export volume. However, the
import & export situation of titanium pigment changed in 2005: its export volume increased
much, while the import volume decreased 9.2%. Along with the increment of capacity & output
of Chinese pigment and the improvement of quality, the export of Chinese pigments will keep
continuous growing.

In the coming five years, the output of inorganic pigment in China will increase with the CAGR
of 10%, and to 2010, the total output will be about 2,540 kilo tonnes. Meanwhile, the output of
organic pigment will also increase with an average growth rate of 12%, reaching 276kt in 2010.
Here is the future production situation of pigment in China in the future.

Figure I-10.1-1 Output of pigment in China in the coming five years












95
0
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400
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1,000
1,200
1,400
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/
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2006 2007 2008 2009 2010
I-10.2 Future development of titanium pigment in China

(1) Production scale will be enlarged gradually and the quality will be improved.

Titanium pigment industry of China will keep developing rapidly in the coming years.

At present, besides two Chlorination-Method projects with the respective capacity of 200kt/a
launched by Dupont and Astron, there are other 12~14 new projects (plans) on the stage of
construction, designation or preparation. These projects (or plans) all adopt Sulfuric Acid
Method and are located in Shanghai, Jiangsu, Zhejiang, Guangdong, Hunan, Hubei and
Sichuan. The capacity of these projects (or plans) totals 250kt/a to 300kt/a. At the same time,
there are 4~5 plants that will be shut down due to factors including region, environmental
protection, etc, in which the capacity of 70kt/a will be involved. If the above projects (or plans)
can be implemented successfully, Chinese capacity of titanium pigment in the end of the
“Tenth Five-year Plan” will reach 1,350kt/a, similar to the capacity of the United States
(currently 1,500kt/a). China will turn to be the real production center of titanium pigment in the
world.

Along with the development of coatings, plastic, paper making, ink, and other industries,
Chinese demand for titanium pigment during 2005~2010 will increase with the CAGR of 11%.
To 2010, the demand for titanium pigment in China will reach 1,268kt. Moreover, the increasing
speed of titanium dioxide rutile must be much faster than that of titanium dioxide anatase.

Figure I-10.2-1 Future demand for titanium pigment in China












(2) Competition in titanium pigment industry will be harder, and the entering of foreign capital
will change the industrial situation.

China has turned to be one of titanium pigment markets that have the biggest development
potential. Foreign enterprises are accelerating their steps of entering Chinese market, at the
same time; there are also many native projects that are newly launched. Future competition in
Chinese titanium pigment industry will be harder.

On the basis of the publicized plans, during the “Tenth Five-year Plan”, two ultra-large type
Chlorination-Method Plants will be established. The two plants include production base
96
invested by Dupont of America in Shandong Dongying and production base invested by Astron
of Australia in Liaoning Yingkou. Total capacity of the two plants is 400kt/a. The two projects
will lead to the unprecedented competition in Chinese titanium pigment industry; even
completely change the pattern of such industry.

Profiting from the good quality, products produced by Chlorination Method occupy the most
market share of high-class titanium pigment, and their price is generally higher than that
produced by Sulfuric Acid Method. However, more than 95% of home-made titanium pigment
is produced by Sulfuric Acid Method.

After the two projects of Dupont and Astron are put into production in the future, it will be very
difficult for home-made Sulfuric-Acid-Method titanium dioxide rutile to take the market of
high-class titanium pigment.

Furthermore, a manufacturer of Germany also plans to establish production base of titanium
pigment in the Far East Region of Russia, and the designed capacity is 50kt/a. It is believed
that the target market is just China.

(3) Geographical distribution of capacity will be clearer.

Guangxi, Sichuan, Shandong, Jiangsu will be major production regions of titanium pigment.
Among these regions, Guangxi and Sichuan mainly benefit from the facile raw material while
Shandong and Jiangsu mainly benefit from their advanced economy.

Guangxi is the province that has the most enterprises of titanium pigment in China because
there is abundant titanium resource in it and nearby region. Local government will still view
titanium pigment as the basal industry to develop it.

Sichuan Panzhihua-Xichang region is the biggest reserve region of titanium ore in China,
which speeds the development of local titanium pigment industry. It is reported that there are
7~8 manufacturers (or engineering) under construction or designation in Panzhihua-Xichang
Region. Sichuan will become a burgeoning production base of titanium pigment.

There have already been five manufacturers of titanium pigment. Shandong Dongjia Group
Co., Ltd. and Shandong Jinan Yuxing Chemical Industry Co., Ltd. are large-scale enterprises
in titanium pigment industry. After the plant invested in by Dupont in Shandong Dongying is
completed, Shandong will turn to be the biggest production base of titanium pigment in coastal
areas.

In Jiangsu Province, there are nine manufactures of titanium pigment including Jiangsu Taibai
Group Zhenjiang Titanium Dioxide Joint-stock Co., Ltd., Nanjing Titanium Dioxide Chemical
Co., Ltd., etc. Jiangsu Province will become another production base of titanium pigment in
economically advanced areas.

(4) China will probably become net exporting country of titanium pigment

97
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2006 2007 2008 2009 2010
In the future, both the capacity and output of titanium pigment in China will continuously
increase, and the quality of product will be improved. The export volume of Chinese titanium
pigment will keep increasing, while titanium pigment imported in the mode of ordinary trade will
gradually decrease. China will probably become net exporting country of titanium pigment in
the future.

I-10.3 Future development of iron oxide pigment in China

(1) There is much room for iron oxide industry to develop in China in the next five yeas.

Production of iron oxide pigment in China will be more centralized and specialized in the future.
Manufacturer number will be reduced and production scale will be enlarged through
competition and acquisition. It is certain that the top five manufacturers will own over 75% of
the annual national output in the next five years. All these will bring in the advantage of
economic scale.

Oversea famous manufacturers of iron oxide pigment are optimistic about the Chinese market.
Bayer of Germany, Rockwood and Elementis of England have already established
solely-funded enterprises and joint ventures in developed coastal cities in China such as
Shanghai City, Fuyang City of Zhajiang Province, Changshu City and Taicang City in Jiangsu
Province and Shenzhen City. The coastal regions become the production bases of iron oxide
pigment for oversea enterprises whose production capacity reaches 120,000t/a, accounting for
15% of the national capacity.

The output of iron oxide pigment in China in the past decade went up at an average annual
growth rate about 14%. It is suported that the output will still increase in the next five years. It
can be predicted that output of iron oxide pigment in China in 2010 will increase to 1,147,284t
or so with the average annual growth rate of 13% from 2006 to 2010.

Figure I-10.3-1 Future output of iron oxide pigment in China in the next five years











As for its property and performance, iron oxide pigment produced in China will be improved by
new research and advanced technologies.

In addition, manufacturers of iron oxide pigment are attaching more importance to security and
environmental protection in their production in line with the strict requirement from the

Production and market of pigment in China
Part Executive summary Introduction & methodologies I I-1 I-2 I-2.1 I-2.2 I-2.3 I-3 I-3.1 I-3.2 1-3.2.1 Production and market information History of pigment industry in China Classification of pigment in China Inorganic pigment Organic pigment Classification in this report Current production situation of pigment in China Summary of production Introduction to major pigment in China Titanium dioxide - Historical development of titanium dioxide industry - Characters of Chinese titanium dioxide industry - Supplying situation of raw material - Manufacturers of titanium dioxide 1-3.2.2 Iron oxide - Historical development of iron oxide industry - Production situation of iron oxide - Introduction to manufacturers of iron oxide 1-3.2.3 Lithopone - Historical development of lithopone industry - Current production situation of lithopone - Manufacturers of lithopone 1-3.2.4 1-3.2.5 Chrome pigment Organic pigment - Historical development of organic pigment - Current production situation of organic pigment - Manufacturers of organic pigment I-3.3 I-4 I-5 I-5.1 1-5.2 I-5.3 I-5.4 I-5.5 I-6 I-7 I-7.1 I-7.2 List of pigment manufacturers in China Pricing analysis of pigment in China Import and Export situation of pigment in China Titanium pigment Iron oxide Lithopone Chrome pigment Organic pigment Competitiveness of Chinese pigment industry Consumption situation of pigment in China Summary of consumption Introduction to consumption situation of each pigment Content Page 4 8 11 11 12 12 13 13 14 14 16 16 16 18 21 22 23 23 23 27 29 29 29 30 31 33 33 34 35 37 39 46 46 53 64 66 69 73 74 74 75

1

I-7.2.1 I-7.2.2 I-7.2.3 I-7.2.4 I-7.2.5 I-7.3 I-8 I-9 I-10 I-10.1 I-10.2 I-10.3 I-10.4 I-11
54H

Consumption situation of titanium pigment in China Consumption situation of iron oxide in China Consumption situation of lithopone in China Consumption situation of chrome pigment in China Consumption situation of organic pigment in China List of major end users Problems existing in pigment industry Governmental policies about pigment industry and their influence Future forecast on pigment industry in the next five years General situation of Chinese pigment industry in the future Future development of titanium pigment in China Future development of iron oxide in China Future development of other major pigments in China Commercial opportunities of pigment in China
5H

75 82 87 88 89 90 91 92 94 94 95 97 98 101 103 103 103 103 104 105 106 107 108 109 110 111 112 113 113 114 115 116 116 117 118 119 120 121 122 123 124 125 127 128

II II-1
56H

Appendix Profile of top 30 pigment producers in China Jiangsu Tianpeng Chemicals (Group) Co., Ltd.
57H

II-1.1 II-1.2
58H

Jiangsu Yixing City Yuxing Pigment Factory Guangzhou Huali-Sachtleben Chemical Co., Ltd.
59H

II-1.3 II-1.4
60H

Guangdong Sanshui T&H Glaze Co., Ltd. Shandong Dongjia Group Co., Ltd.
61H

II-1.5 II-1.6
62H

CNNC Huayuan Titanium Dioxide Co., Ltd. Zhejiang Deqing Hua Yuan Pigment Co., Ltd.
63H

II-1.7 II-1.8
64H

Sichuan Lomon Corporation Jiangsu Taibai Group Zhenjiang Titanium Dioxide Joint-stock Co., Ltd.
65H

II-1.9 II-1.10
6H

Pan Gang Group Chongqing Titanium Industry Co., Ltd. Shanghai Yipin Pigments Co., Ltd.
67H

II-1.11 II-1.12
68H

Hebei Yuhuan Chemical Industry Co., Ltd. Hunan Three-Ring Pigments Co., Ltd.
69H

II-1.13 II-1.14
70H

Shandong Jinan Yuxing Chemical Industry Co., Ltd. Jiangsu Changzhou North American Chemical Group Co., Ltd.
71H

II-1.15 II-1.16
72H

Anhui Tongling Annada Titanium Dioxide Co., Ltd. Guangxi Cangwu Shunfeng Titanium Dioxide Co., Ltd.
73H

II-1.17 II-1.18
74H

Shenzhen Elementis Pigment & Chemical Co., Ltd. Hunan Xiangtan Niutou Chemical Co., Ltd.
75H

II-1.19 II-1.20
76H

Hunan Changsha Fengchao Pigment Chemical Co., Ltd. Hebei Xuri Chemical Co., Ltd.
7H

II-1.21 II-1.22
78H

Yunnan Dahutong Industry&Trading Co., Ltd. Shanghai Jinghua Chemical Co., Ltd.
79H

II-1.23 II-1.24
80H

Nanjing Titanium Dioxide Chemical Co., Ltd. Hunan Hengyang Meilun Pigmental Chemical Co., Ltd.
81H

II-1.25 II-1.26
82H

Guangxi Pinggui PGMA Co., Ltd. Henan Billions Chemicals Co., Ltd.
83H

II-1.27 II-1.28
84H

Hunan Jintian Fertilizers and Chemical Engineering Co., Ltd.

2

II-1.29 II-1.30 II-2 II-2.1 II-2.2 II-2.3 II-2.4 II-2.5 II-2.6 II-2.7 II-2.8 II-2.9 II-2.10 II-2.11 II-2.12 II-2.13 II-2.14 II-2.15 II-2.16 II-2.17 II-2.18 II-2.19 II-2.20 II-2.21 II-2.22 II-2.23 II-2.24 II-2.25 II-2.26 II-2.27 II-2.28 II-2.29 II-2.30

Hebei Yongming Lithopone Factory Zhejiang Hangzhou Baihe Chemical Co., Ltd. Profile of top 30 pigment end users in China Nippon Paint Co., Ltd. Beijing Meichao Finishing Material Co., Ltd. Guangdong Huarun Paints Holdings Co., Ltd. Shandong Lehua Group Co., Ltd. Shanghai ICI Swire Paints (Shanghai) Co., Ltd. Hong Kong Hempel-Hai Hong (China) Ltd. Shandong Changyu Group Co., Ltd. Shanghai Coatings Co., Ltd. Shanghai Cosco Kansai Paint Co., Ltd. Chongqing Hongqi Paints Co., Ltd. Changzhou Guanghui Chemical Co., Ltd. GuangDong Maydos Chemical Group Hunan Xiangjiang paint Group Co., Ltd. Tianjin Toyo Ink Co., Ltd. Hangzhou TOKA Ink Chemical Co., Ltd. Shanxi Taiyuan Coates Lorilleux Chemicals Ltd. Zhejiang Yongzai Chemical Industry Co., Ltd. Shanghai Peony Printing Ink Co., Ltd. Yip's Ink (Zhongshan) Ltd. Shanghai DIC Ink Co., Ltd. Anhui Wuhu Conch Profiles and Science Co., Ltd. Dalian Shide Plastics Industry Co., Ltd. Liaoning Zhongwang Group Koemmerling (Tianjin) High Polymer Molding Co., Ltd. Shandong Chenming Paper Industry Group Shandong Huatai Group Co., Ltd. Golden East Paper (Jiangsu) Co., Ltd. Shandong Sun Paper Industry Joint Stock Co., Ltd. ShangHai YiHua Rubber Products Factory Hebei North China Rubber Factory

129 129 131 131 132 132 133 135 136 137 138 138 139 140 141 142 143 144 145 146 146 147 148 149 150 151 153 154 155 156 156 157 158

3

and the respective output share of the other areas is smaller than 10%. plastic.425 329. At the same time. because of the shortage of high-class products.000 40. Pigment production in China concentraes on East China and Central South China. Chinese pigment highly depends on overseas markets.736 197.311 490. Table I Basic information of Chinese pigment industry in 2005 Capacity Category Titanium dioxide Inorganic pigment Iron oxide Lithopone Chrome pigment Others Sub-total Organic pigment Total Producers 60 140 14 16 20 250 100 350 (t/a) 750.215 470.916 10.000 340.136 tonnes are organic pigment.952 438. Pigment is chiefly consumed in coatings. 37% of national output.005 69. This situation was just like the consumption structure of pigment all over the world.6kt and accounting for 48 percent of the national output.000 180. where the output in 2005 was 691. Current statistic shows that there are about 350 manufacturers of pigment in China. For instance.300 156.585 1.511 61.260kt/a. with the average annual growth rate of output being 21% in 2002~2005.631 644. East China had the largest output of pigment.324 0 2.433 80.000 150. of which 1506.000 24. paper making and rubber industries.2kt. of which 1. which totally consumed 82.885 Import (t) 227.928 31. of which a majority were high-class products.000 2. the apparent consumption volume of pigments in China reached 1579.867. China imported 470 kilo tonnes of pigments in 2005.321 1.664 Apparent consumption(t) 752. reaching 896.4% of pigment in 2005.000 1. Central South China was the second biggest production area of pigment.600 120. Guangdong and Zhejiang.136 1. even reaching 40% in 2005. Chinese pigment industry will keep rapid development in 4 . The annual export proportion of Chinese pigment was generally beyond 35%.000 622.364 Along with the swift development of downstream industries such as coatings. occupying 51. accounting for 91. In last year. ink. Coatings industry was the biggest consumer of pigment.228 73.711. Nowadays.436 tonnes.000 36. the top three provinces of pigment production were Jiangsu. China has become one of major production countries of pigment in the world.664 758.591 170.143 Export (t) 157. In 2005.000 15.Executive summary Chinese pigment industry develops rapidly in recent years.080.300 tonnes are inorganic pigment and only 73.000 Output (t) 682.000 114.579.700 250.2% of total consumption. paper making and rubber industries.6% of total output. China has to import large quantities of pigment every year.000 2. respectively.868 kilo tonnes of pigments in 2005.260. ink. plastic.506. and they totally produced 1. In 2005.711kt were inorganic pigments.000 800. with the capacity of 2.

Iron oxide pigment 5 .the future. iii) Compared with oversea enterprises. the total output will be about 2. titanium dioxide produced by Chinese enterprises amounted to 682kt with the contribution rate to global market being 14. the import of titanium pigment uncommonly presented a decreasing trend opposite to the situation in the past years. Here is the future production situation of pigment in China in the future. Chinese titanium dioxide enterprises have undeveloped technologies. the output of organic pigment will also increased with an average growth rate of 12%. China is turning to be a global production center and crucial sales market of pigment.000 2. Meanwhile. While the export volume in 2005 increased 67. China’s titanium dioxide industry kept growing rapidly. Chinese market is more attractive to those large multinational pigment manufacturers who are transferring more capacity of pigment to China. The output of inorganic pigment in China will increase with the CAGR of 10% in the coming five years.000 1. In the future.500 1.9%. and the industry is tending towards production intensification.000 500 2006 2007 2008 2009 2010 Inorganic pigments Organic pigments Titanium pigment In 2001~2005. reaching 276kt in 2010.500 Output/kt 2. worse quality products and fewer specifications. and to 2010. ii) Production scale of enterprise keeps enlarging. Figure I Output of pigment in China in the coming five years 3.1% over that in 2004. Chinese titanium pigment is entering in the international market. export of Chinese pigment will also keep a mighty increment. both the capacity and output increased by leaps and bounds although the growth rate was not higher than that during the “Ninth Five-year Plan”. Titanium pigment of China presents the following characters: i) With rapid development in the past. iv) The pressure of environmental protection becomes heavier. both production and consumption increased explosively.540 kilo tonnes. In 2005. Compared with the international market. In 2005.

Generally. Jiangsu Province. The price of iron oxide pigment kept going up from 2003 to the beginning of 2006 because of the cost rise of raw materials. China is the largest producer of iron oxide pigment in the world with a production capacity above 800. 329. Influenced by titanium pigment with better performance.000t/a. the top ten have an annual production capacity of 377. The current capacity is 40kt/a. Jiangsu Yixing Yuxing Pigment Factory is the largest manufacturer and the only one having the capacity above 100. There are about 140 manufacturers producing iron oxide pigment in China. and 2/3 of iron oxide pigment in the international market is from China.As the top color pigment. Other pigment At present.433t iron oxide pigment. Zhejiang Province and Shanghai City in Yangtze River Delta. North America is the largest destination where China exported 124. In terms of regional distribution. The total output of these two kinds of pigment in 2005 takes about 77% of the total output of iron oxide pigment. the price turns to be stable. China is the largest producer of chrome pigments in the world. Other export destinations are Europe. Chinese iron oxide industry generally depends on export. Coatings & paint and architectural materials are the major application fields. China is the unique producing country of lithopone in the world. In the iron oxide pigment family. Apparent consumption of iron oxide in 2005 reached 490. Among all manufacturers. coatings and 6 . In 2006. accounting for about 40% of the national capacity. UK.293t iron oxide pigment to in 2005. Germany and Canada and so on. rubber and plastic and paper-making. China produced 250 kilo tonnes of lithopone. iron oxide black and so on. coatings and paint. iron oxide pigment industry in China has a history of over 40 years. Southeast Asian and Middle East including Spain. energy and son on. In 2005.000 t/a. iron oxide production concentrates in Shandong Province and Hebei Province in the north.591t. and Fujian Province and Guangdong Province in the north. Import and export of iron oxide pigment in China are both increased recently. of which 80kt were exported. However. Because of the rapid development of ink. iron oxide pigment is mainly consumed in these fields including architectural materials (construction).4% from 2004.000t/a in China. iron oxide yellow.700t accounting for half of the world. lithopone industry of China runs hard and the profit level is very low. iron oxide red and iron oxide yellow are the key members. Iron oxide pigment include iron oxide red. more than half of the output is exported in 2005 with a growth rate of 5. The output in 2005 reached 622. accounting for 40% of global capacity. The output of lithopone will gradually decrease with an average annual growth rate of -5% in the coming five years.

plastic fields both at home and abroad, to 2010, the output of chrome pigments in China will reach 55,000 tonnes. China is the largest producer of organic pigment in the world with the output being 156,585 tonnes in 2005, 39.9% of the global output. However, the sales value in China only accounted for 20% of the global one. In the coming several years, the output of organic pigments in China will increase with the annual growth rate higher than 10%.

7

Introduction & methodologies Introduction The report looks at the situation of Chinese pigment industry in the past, at present and in the future. The primary purpose of this report is to disclose the market info of Chinese pigment industry. This report was formulated in September 2006. The data for 2006 and before are based on CCM’s database and other various sources as mentioned in the section on methodology below. Methodology This report is based on a detailed interviewing program, supported by an extensive program of desk research including comprehensive searches of CCM’s database, searches of a wide variety of publications, internet site worldwide. Wherever possible, information published by August 2006 has been incorporated in the report. - Telephone Interviews When necessary, CCM carried out in-depth telephone interviews with pigment producers, some researchers, and a part of pigment exporters. - Desk research The sources of desk research are various including published magazines, journals, government statistics, industrial statistics, customs statistics, association seminars as well as information from the Internet. A lot of work went into compiling and analyzing the information obtained. When necessary, checks were made with the Chinese suppliers regarding market information such as technology, production, pricing, etc. - Data processing and presentation The data from verified information, telephone interviews, the secondary data from all of the publication and site visit information have been combined to make this report as precise and scientific as possible. Throughout the process, a series of internal discussions took place in order to analyze the data and draw conclusions from it. - Forecast Based on many macro factors, such as GDP, living standard, and development of related industry, CCM estimated the future market of related industries from 2006 to 2010. List definition

8

- CAGR: Compound Annual Growth Rate - Apparent consumption Apparent consumption equals production + import – export. It is one of the factors reflecting demand, which excludes quantities in storage from the apparent consumption. This report assumes that superficial consumption equates to actual consumption, and therefore demand. - Foreign/overseas Anything or any activity pertaining to individuals/units coming from territories outside the mainland, People’s Republic of China (e.g. foreign company refers to a company located in a country outside mainland China). - Ownership Ownership of enterprises can be classified as follows: State-owned The whole factory/company is financed and owned by the local/central government. Private The whole factory/company is financed and owned by an individual person. The owner has the right to manage the factory/company. Stock The company is managed in the same way as a stock company. It may/may not be listed on the stock market. Yet the management system must comply with the rules governing stock companies. Joint venture An entity invested in jointly by a foreign company and a Chinese company. The two or more cooperating partners share the profit. The Chinese partner may be an individual or a state-owned unit. Wholly foreign owned The owner of the company is an individual/unit coming from outside mainland China. Throughout this report, data is classified under two kinds of ownership. Domestic companies Foreign involvement companies When necessary the foreign involvement companies are further classified into two types: Wholly foreign-owned companies Joint ventures (JVs) Taking account of the origin of the products/goods, those made by the overseas companies are also included. In this case we attribute the products/goods to imported material, i.e. the material is made in countries outside the People’s Republic of China.
9

- Region in China
Region East China South central China North China Southwest Northeast Northwest Province and city Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Shandong Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan Beijing, Tianjin, Shanxi, Hebei, Inner Mongolia Chongqing, Sichuan, Guizhou, Yunnan, Xizang Liaoning, Jilin, Heilongjiang Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang

- Unit From 1949 to 2005: $1=RMB8.24 Since 2006: $1=RMB8.00 RMB: currency unit in China, also called Yuan Tonne: ton, equals to metric ton in this report Kilo tonne: equals to kilo metric ton, or 1,000 tonnes, or kt. t/a: tonne/annual or tonne/year /t: per tonne

10

Before 1949. exploring new pigment medicament form or special medicament form and so on. etc was developed. red lead. more breeds were developed. and the output was small. were used. In 2005 the output of global inorganic pigment] reached 6 million tonnes. mercury sulphide. yellow lead. new specifications and structures of organic pigments were developed less and less. red lead. cutting the cost. Since then. reducing waste. The commercial processing of inorganic pigment began in 1704 with the production of iron oxide blue. the output increased. Since the 1970s. improving the yield and quality. The organic pigments industry in the world turned to focus on developing new synthesis technologies. carbon black. Since the 1950s Chinese inorganic pigment industry developed fast. only accounting for 5.000 tonnes in 2005. light-fastness. Polymer materials developed fast after 1954.200 tonnes. The output of inorganic pigment in China in 1980 reached 204. Egyptian blue. lead chromate yellow. The earliest organic pigment was a kind of infusibility lakes. Lithopone was put into commercial production in 1874. and species with good heat resistance. and the quality improved a lot. 11 . In 1982 the output of organic pigment in the world was about 250. Chinese blue etc. iron oxide. and it reached 390. inorganic pigment] developed fast in the world. Production technology at that time lagged behind. And the first titanium dioxide plant was built in 1916. Traditional processes of industrially producing zinc oxide. which was produced by treating mordant dye extracted from plant with metal salt.I Production and market information I-1 History of pigment industry in China Development of pigment in the world Thousands of years ago some old inorganic pigment such as red lead. lithopone. chrome yellow. In the 1960s some modern manufacturers with a certain scale were established to produce titanium dioxide. iron red.6% of the world. Development of pigment in China The initial step of Chinese pigment industry began much later than that in the world. The development of organic pigment] can be divided into three stages: The first is the basic chromatogram matching stage during which lithol red was synthesized in 1899 and phthalocyanine green was synthesized in 1938. researching the superficial treatment of pigment. etc.000 tonnes. chrome yellow. etc appeared during the early 30 years in the 19th century. inorganic pigment in China included iron blue. zinc oxide. etc. flake white.

980 3.Since the 1900s inorganic pigment in China developed rapidly and the national output reached 742.470 10. pigment could be classified into natural pigment and synthetic one. while the rate in 1982 was only 1. pigment could be classified into inorganic pigment and organic one.2%.350 3. According to its processes.360 980 12. Its output accounted for about 40% of the world in 2005. and China is a large producer of organic pigment in the world today. and only a few are made from biologic products.950 1. inorganic pigments industry in China keeps growing at a high speed. Synthetic pigment is synthesized through chemical reaction.700kt from 950kt in 2002 with the average annual growth rate of 21.1 Inorganic pigment According to chemical component.300 Yellow lead Red lead Chrome pigments Other inorganic pigments Silver powder Total Species Output 4.220 In recent years.1%. among which lithopone possessed the largest share. inorganic pigment can be classified into the following categories: Titanium pigment Iron pigment Chrome pigment Lead pigment Zinc pigment Metal pigment Others 12 .500kt in 2005 from 980kt in 2002 with the average annual growth rate of 15. Most kinds of natural pigment are made from mineral. Table I-1-1 Production structure of inorganic pigment in China in 1995 (Unit: t) Species Lithopone Iron oxide red Iron oxide yellow Iron oxide black Titanium dioxide Zinc oxide Output 21.200 tonnes in 1995.030 1.4%.180 7. I-2 Classification of pigment in China There are many approaches to classify pigment: According to chemical component. The output in 2005 was up to 1. The apparent consumption reached 1. I-2.010 74. Since the 1980s organic pigment also developed fast in China.600 7.

inorganic pigment can be classified as follows: White pigment Black pigment Yellow pigment Red pigment Green pigment Blue pigment Others According to usage and function.According to chemical species. inorganic pigment can be classified: Pigment for coatings Pigment for ink Pigment for plastic Pigment for rubber Inert pigment Pearlescent pigment Inhibitive pigment Others I-2. In this report CCM will introduce pigment industry in China by classifying sections of titanium dioxide. and lithopone. organic pigment can be classified into the following categories: Azo pigment Phthalocyanine pigment Ketone containing condensed rings Others I-2. other inorganic pigment. inorganic pigment can be classified into the following categories: Oxide pigment Chromate pigment Sulphate pigment Hydrate pigment Sulfide pigment Metal pigment Others According to color. 13 .2 Organic pigment According to chemical structure. organic pigment etc. iron oxide.3 Classification in this report CCM takes on a simple classification method.

Shanghai. there are over 370 pigment manufacturers in China with the total capacity of 2. Guangxi. Shandong. being a very small proportion of the countrywide output. At present. of which 2. reaching 896. Statistics showed that the total output of pigment in China in 2005 was 1.6kt and accounting for 48 percent of the national output. and the following provinces were Hunan. In 2005. As for organic pigment the current annual output of China accounts for about 40 percent of global output.7kt). Each output of pigment in Northeast and Northwest was less than 10kt. Demand and supply situation of pigment in China in 2005 is shown in Table I-3.2kt. In 2005. accounting for 37% of national output. Hebei.260kt/a.1% North China 9. The geographical distribution of pigment output and the order of province or city in 2005 are shown in the Figure I-3.2%. Figure I-3. The pigment production in China focuses on East China and Central South China.0% 14 . accounting for 92 percent of total pigment capacity. the top three provinces of pigment production were Jiangsu (398.5kt). Zhejiang (233.7% East China 48.711 kilo tonnes of inorganic pigment and 157 kilo tonnes of organic pigment) with a year-on-year increment of 18.6kt).I-3 Current production situation of pigment in China I-3.1 Summary of production As one of the main countries producing and consuming pigment especially inorganic one.1-2. Central South China was the second with the output in 2005 of 691. Guangdong (244.0% Southwest 5.0% South central China 37.080kt/a are for inorganic pigment. East China had the largest output.868kt (including 1. The following production bases were orderly North China and Southwest China. The order was basically the same to that in 2004. The capacity of organic pigment is only 180kt/a.1-1 Geographical distribution of pigment output in China in 2005 Northeast 0.1-1 and Figure I-3. China is the unique producer of lithopone.1-1. Chongqing and Henan.2% Northwest 0.

7 398.5% 215.3% 70.8% 41.6 400 450 Output/kt Table I-3.7 79.1 56.8 206.5 244.3% 29.8 233.1-2 Top 10 provinces and cities of pigment output in China in 2005 Henan Chongqing Shandong Shanghai Hebei Guangxi Hunan Zhejiang Guangdong Jiangsu 0 50 100 150 200 250 300 350 56.2% 113.6% 42.5 141.8% 57.711 439 644 1.8% 118.0% 29.0 132.1-1 Demand and supply situation of pigment in China in 2005 Pigments Items in 2005 Pigments in 2004 Year-on-year increment Inorganic pigments in 2005 Output/kt Import/kt Export/kt Apparent consumption/kt Market share of 70.4 108.868 470 759 1.579 1.2% 70.Figure I-3.5% 1.2% 6.5% 1.506 Organic pigments in 2005 157 31 115 73 home-made products Market share of imported products Output/consumption 29.7% 106.1% 6.1% 15 .580 440 538 1.6% 11.482 18.

638 251 6.425 1. 644kt.0 91% 197.1% 36.3kt.511 2.139 23. The operating rate of titanium dioxide industry was 82. iron oxide 36.200 40.2-1.4% and lithopone 14.6% of gross output of pigment in China.2 Introduction to major pigments in China Inorganic pigment At present.096 1.4% 567.592 84% 93% N/A N/A 427. iron oxide and lithopone are the major categories and their proportions of output in 2005 were titanium dioxide 39.361 83% 94.5 99% 0 N/A 80.835 157. accounting for 91.997 21% I-3. there are about 250 active manufacturers of inorganic pigment in China.300 tonnes.500 682 91% 39. and the apparent consumption was 1506.714 623 78% 36. the import and export volume of inorganic pigment was 439kt.0% Lithopone Iron oxide 800 140 5.9% 37% 25.3% in last year. the most important category is white covering type pigment in which titanium dioxide takes the key position. Chrome series occupied 2.711.4 752 4.261 5.82 491 1.9% 100% 51.6%.5 24 100 24.320t/a.2-1 Production and sales situation of major inorganic pigment in China in 2005 Item Titanium dioxide Capacity (kt/a) Producers Average capacity (t/a) Output (kt) Operation rate Proportion of output Sales volume(kt) Sale/production Import/t Import price (USD/t) Export/t Export price (USD/t) Import price/export price Apparent consumption/kt Global consumption/kt Consumption proportion in global market Contribution rate for global market 14.Historical development of titanium dioxide industry Among inorganic pigment.000 369 N/A 170 250 68.324 416 329.500 37 93% 2.890 230 8.437 6. At the same time.080kt/a and an average capacity of 8.589 16.433 517 0.916 3.4% Total in 2004 1.226 15.286 250 74% 14.4% 340 14 24. Table I-3.1 Titanium dioxide . titanium dioxide.I-3.338 N/A N/A 1.217 1. The output of inorganic pigment in 2005 was 1.7% 1. In 2005.9%.369 N/A N/A 1.6% 247. respectively.976 N/A 582.0% Total in 2005 1.321 1.9% N/A N/A 227.6 99% 2.9% 22% 750 60 12.648 N/A 499.9% Chrome series 40 16 2. Among inorganic pigment. 16 . with the total capacity of 2. The production and sales situation of major inorganic pigment in China in 2005 was listed in Table I-3.736 1.525 1. increasing by 7% over that in 2004.2.1% of the total output of inorganic pigment.389 98% 452.

The total capacity is 576kt/a. Mexico and Taiwan of China. For example. Since the late 1980s. England. Germany. Netherlands. etc. the United States is the largest producer of titanium dioxide in the world.6 ISK of Japan: The corporation has four plants which are located in Japan. Canada. No. respectively. The total capacity is 220kt/a. No.5 NL (National Lead) of the United States: It is Kronos Corporation. The top six producers of titanium dioxide in the world are all multinational corporations. England.300kt/a.2 Millennium of the United States: The corporation has eight plants which are located in USA. who produces titanium dioxide. Liaoyang.620kt/a is in North America. 1. In general. 829kt/a in the Asia-Pacific. During 1962~1963. France and Brazil. moreover. Australia. It has the capacity of more than 3. Here is the brief introduction of them: No. The plants are located in USA. No. In the 1950s.3 Ken-mcgee of the United States: The corporation has six plants which are located in USA. The total capacity is 600kt/a. five of them are in USA. Ltd. Wuxi. Spain.1 Dupont of the United States: The corporation has five plants which are located in USA.375kt/a in West Europe. South Africa and Malaysia. other manufacturers in the world are regional producers of titanium dioxide. the former No. and the products were mainly used in porcelain enamel and electric welding rod. Belgium. and 70kt/a in South America. Furthermore.404 Factory of Ministry of Nuclear Industry (current CNNC Huayuan Titanium Dioxide Co. of which 1. At that time. China started to import oversea technologies into titanium dioxide production. it laid a foundation for the production of Titanium Dioxide Anatase by Sulfuric Acid Method in China.In the world At present. The total capacity reaches 1000kt/a. Kronos has six plants with the total capacity of 430kt/a. Belgium. The total capacity is 720kt/a. Guangzhou. 239kt/a in East Europe a. Jinan.) established a Sulfuric-Acid-Method titanium 17 . 135kt/a in Africa and the Middle East. the global capacity of titanium dioxide is about 4. No. and established pilot equipment in chemical plants of Shanghai and Tianjin. Tianjin Chemical Academy scaled up its experiment about the preparation of Titanium Dioxide Anatase. Chinese organizations did not research the production technology of titanium dioxide until 1954. France. all titanium dioxide were not pigment grade products. No. The achievement of Tianjin Chemical Academy passed the authentication of State Ministry of Chemical Industry. some small titanium dioxide factories were established in Shanghai. 352kt/a in other regions. Singapore and Taiwan of China. Obviously. Italy. Tianjin. In China Titanium dioxide industry of China owns a short history. one of NL’s subsidiaries in Germany.4 Huntsman of the United States: The corporation has eight plants which are located in USA. Germany and Norway. Australia and Saudi Arabia.700kt/a..

Except for Pan Gang Group Jinzhou Titanium Industry Co. titanium dioxide produced by Chinese enterprises amounted to 682kt with the contribution rate to global market being 14. The former Liaoning Jinzhou Ferroalloy Factory (current Pan Jin Tai Ye) also imported a part of technologies and equipment and established a Chlorination-Method titanium pigment factory in the end of 1994. titanium dioxide occupied half of the consumption of inorganic pigment in China. respectively with the average operating rate being 91%.5%. Ltd.. merely next to the United States. 682kt. Since 2001. China has owned the scale of titanium dioxide industry that exceeded Japan and become the second biggest producer. The specification structure of titanium dioxide in 2005 was as follows: Table I-3. During the Ninth Five-year Plan (1996~2000). China’s titanium dioxide industry kept growing rapidly by leaps and bounds both in the capacity and output although the growth rate was not higher than that during the “Ninth Five-year Plan”. the capacity and output of titanium dioxide was 750kt/a.1-1 Specification structure of titanium dioxide in 2005 Specification Titanium dioxide rutile Titanium dioxide anatase Non-pigment grade titanium dioxide Total Output/kt 229 371 82 682 Proportion 34% 54% 12% 100% At preset.2. titanium dioxide industry of China presents a prosperous situation both production and marketing thrive.pigment factory with the capacity of 15kt/a in 1993 by purchasing technologies of former Jugoslavia and Czech Republic. .9%. At the same time. Here is the supply and demand situation of titanium dioxide in China in the past. Ltd. At the same time. In 2005. The former Chongqing Yugang Titanium Dioxide Co. the CAGR of output and apparent consumption was 30.4% and 23. titanium dioxide industry of China developed rapidly..Characters of Chinese titanium dioxide industry i) With rapid development in the past. driven by domestic demand and the increment of export. In 2001~2005.. there are about 60 manufacturers of titanium dioxide in China. In 2006. the import volume also increased much because of the fast development of its end use sectors. all other manufacturers adopt Sulfuric Acid Method to produce titanium dioxide.. other old Sulfuric-Acid-Method factories also imported software and equipment for technical reform. by which both quality and production level were improved remarkably. 18 . To 2005. (current Pan Yu Tai Ye) established a Sulfuric-Acid-Method titanium pigment factory with the capacity of 15kt/a in 1995 by purchasing technologies of Poland. production and consumption explosively increased. of which 12 ones are able to produce Titanium Dioxide Rutile. As a kind of important inorganic pigment.

450 163.595 499. the number of Chinese titanium dioxide manufacturers decreased to about 60.5% ii) Enterprise production scale keeps enlarging.518 704.533 250.789 79. there were 27 manufacturers with respective output over 10kt.425 29.311 13.000 354.130 187.588 752.224 22.450 82. 10 manufacturers with the respective output being over 20kt.800 101.477 31. furthermore. Sulfuric Acid Method was gradually displaced by Chlorination Method which had many advantages including fewer impurities. 5 manufacturers with the respective output being over 30kt.932 153. narrow granularity distribution and high white content. According to statistics in 1996.4% Import/t 54.4% Export/t 15.015 94.736 10. the former accounted for 55% of global capacity of titanium dioxide.000 191.535 68. the output of the top ten manufacturers totaled 313. lower quality products and fewer specifications.8% 27.500 162.000 420.833 91.603 55.Table I-3.1-2 Supply and demand situation of titanium dioxide in China in the past Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 CAGR (2001~2005) CAGR (1996~2000) Output/t 77.083 53. The above data shows that titanium dioxide industry of China is tending towards production intensification. iii) Compared with oversea enterprises. At the original stage of the global titanium dioxide industry.750 tonnes which accounted for 46% of countrywide output of titanium dioxide.771 227. and 1 manufacturer with the output being over 40kt.800 20.300 111.812 209.806 42. On the contrary.5% which was several times as the growth rate of global titanium dioxide output.000 380.400 121.000 548.329 79. the capacity of Chlorination Method exceeded that of Sulfuric Acid Method.4% 14. Due to the heavy pressure from environmental protection.8% 30. its output in 2005 reached 682kt with a year-on-year increment of 24.183 157.2. Chinese titanium dioxide enterprises have undeveloped technologies.622 569.068 55. the demand for Titanium Dioxide Rutile from consumers turned larger and larger.028 141. some enterprises were shut down.951 228. while the latter only took 19 . In 2005.000 17. Sulfuric Acid Method had many disadvantages such as seroius waste-generation and low utilization ratio of resources.889 23.328 257.329 451. As a result.000 293. In 2005.259 152.960 379.244 179.7% Apparent consumption/t 116.134 109. it was only Sulfuric Acid Method that was used to produce titanium dioxide.6% 23. as a result.000 682. and the industry trends towards production intensification.

45%. At present, in American, there is little market share for Titanium Dioxide Rutile produced by Sulfuric Acid Method, and all existing manufacturers who adopt Sulfuric Acid Method just produce Titanium Dioxide Anatase. Different from the situation of other countries, Chinese titanium dioxide manufacturers widely adopt Sulphuric Acid Method to produce titanium dioxide. Among about sixty active producers, only Jinzhou Titanium Industry Co., Ltd. of Pan Gang Group (Pan Jin Tai Ye) adopts Chlorination Method. The company owns the capacity of 15,000t/a, 2% of total capacity in China. In theory, Sulfuric Acid Method could produce Titanium Dioxide products which were of equivalent quality with Chlorination Method, but actually, in the international market, no products of Sulfuric Acid Method can contend against top-ranking products of Chlorination Method either on the aspect of appearance, resistance to elements or dispersivity, etc. Although the quality of products from Pan Jin Tai Ye is improved much in the past, there is still a long way to catch up with the similar type of products of large oversea companies. Because of the increasing demand for first-class titanium dioxide from end use sectors especially slap-up coatings industry, China must import a large amount of titanium dioxide products every year. In the past three years, China imported more than 200,000 tonnes of titanium dioxide products per year to meet domestic demand. iv) The pressure of environmental protection becomes heavier. It is well-known that Sulfuric Acid Method causes serious environmental pollution and the treatment of pollution costs high. In fact, environmental protection has already imposed a heavy burden on each titanium dioxide enterprise. Undoubtedly, aknowlegement of “Clean Production” is now one of the most important factors deciding whether titanium dioxide enterprises can realize the sustainable development. In recent years, the Chinese government highlighted the concept of environmental protection. In 2002~2005, almost all titanium dioxide manufacturers were exposed by Media or government their faulty establishment for bad environmental protection or nonstandard operation which led to the superfluous discharge of “three-waste”. Many of these enterprises were required to consolidate within a given time, during which the manufacturers must stop production or reduce the output. Moreover, rigorous regulations about environmental protection also affect the future distribution of titanium dioxide industry. In the past three years, several initiated projects of titanium pigment were suspended or stopped because they failed to pass the evaluation of environmental protection, through which the eyeless enlargement of capacity was strictly monitored. Several years ago, seldom titanium dioxide enterprises attached importance to the warning on environmental protection, but now the severe situation comes true. At present, Chinese governmental policies on the development of titanium dioxide industry are these: - To encourage project development of Chlorination-Method titanium dioxide; - To encourage the exploitation of new technology and new products;
20

In the future. electric wedding rod and titanium pigment. In the future. . iron oxide is selectively reduced to be iron metal while oxide of titanium is enriched to form the final product “Titanium Slag”. At present. China needs about 1.Supplying situation of raw materials At present. Vietnam. titanium ore has a definite trend of short-supply along with the development of titanium pigment industry. more than 90% of titanium ore is symbiotic mine in which the content of titanium dioxide is low and its components are complex..000kt/a. titanium-rich slag can not only improve the quality of product but also 21 . As an kind of unreproducible resource. mixed with reductant containing carbon. Titanium slag is mainly used to produce titanium sponge. Titanium slag Ilmenite. China must import a lot of ilmenite sand and titanium-rich slag.The newly established projects of both Chlorination Method and Sulfuric Acid Method must conform to the standard of environmental protection. future competition in titanium pigment industry of different countries. while ordinary enterprises are only able to purchase it from domestic and oversea market. India and North Korea. the output of titanium pigment will increase rapidly. In the future. more than 90 percent of titanium slag is used as the raw material of titanium pigment. titanium ore resource will surely become one of the key factors that affect the development of titanium pigment industry of China. Therefore. Ilmenite Although China is one of the countries that own the most abundant titanium resource. . it is inevitable that the supply of titanium resource in China is insufficient. so titanium pigment enterprises should make full preparation to deal with such situation. Compared with ilmenite. during which.800 kilo tonnes of ilmenite per year for titanium pigment. regions and enterprises will focus on the ownership of mine resource. but domestic capacity of ilmenite is only 1. Raw materials used to produce titanium pigments include ilmenite and titanium slag.To forbid the development of Sulfuric-Acid-Method projects to some certain extent unless the project has such advantages as that the quality reaches international standard. Those powerful enterprises may participate in the exploitation of titanium ore resource. since that the domestic supply of titanium ore resource is insufficient. and both waste acid and ferric sulfate are effectively utilized. China imports ilmenite and titanium-rich slag from Australia. In fact. Canada. is smelted and reduced in smelting furnace. which will definitely widen the gap between demand and supply of ilmenite.

Pan Gang Group Chongqing Titanium Industry Co.566 2.3% 2.016 22.579 0 0 0 10. Ltd. Ltd. Ltd. the association desired that the tariff of titanium-rich slag be exempted and importing tariff No. Shandong Wudi Haixing Coal Chemical Industry Co.. Nanjing Titanium Dioxide Chemical Co.976 23. In such report.660 20.. the output of Chlorination-Method titanium pigment accounts for over 60% of global titanium pigment..6% 5.2. Ltd.741 15.1% 3.. Manufacturers of titanium pigment probably choose titanium slag as the raw material for production under the situation that regulations on environmental protection are more and more rigorous in the world.643 21.411 37. Sichuan LOMON Corporation Jiangsu Taibai Group Zhenjiang Titanium Dioxide Co.722 10. .1% 1. Ltd.884 38.950 451. Ltd.Manufacturers of titanium dioxide Table I-3.4% 3. of titanium-rich slag be also confirmed...760 0 3. Yunnan Dahutong Industry&Trading Co.449 12. CNNC Hua Yuan Titanium Dioxide Co. At present. Ltd.643 21.6% 2..5% 2.3% to 57.402 20..239 17.873 17. Company % total output Output Rutile Anatase 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Shandong Dongjia Group Co. Guangxi Cangwu Shunfeng Titanium Dioxide Co.124 38.500kt/a to 2.963 37. which seriously affects the enthusiasm of titanium pigment manufacturers who employ titanium-rich slag as raw material.239 28. Henan Billions Chemicals Co.249 15.3% 2.633 37.449 17. Hunan Zhuzhou Chemical Industry Group Co.206 18. Sulfuric Acid Method is not permitted to employ ilmenite as the raw material.. Ltd.143 0 4...705 0 N/A 14. Ltd.0% 2.5% tariff because there is no special importing tariff number for it in China..6% 5. Ltd.5% 4.915 0 3. Guangxi Baihe Chemical Co. the imported titanium-rich slag with lots of advantages is imposed 4.6%. Anhui Tongling Annada Titanium Dioxide Co.9% 1.. and its proportion in global output of titanium pigment went up from 45. Ltd Total 6.950 0 8.3% 3.862 38.615 12.5%~6. Ltd.702 24. Ltd. However.2% 3.7% 5.1-3 List of major titanium dioxide producers and their production situation in 2005 (unit:t) No.723 17. In foreign countries. The rapid development of Chlorination-Method titanium pigment leads to enormous demand for titanium-rich slag. Ltd.. Guangxi Dahua Chemical Plant Pan Gang Group Jinzhou Titanium Industry Co.613 18. Ltd.615 N/A N/A 218.446 15.296 36. Therefore.902 23.2% 44. Hunan Yongli Chemical Incorporated Co...249 11.7% 5.258 14. China National Coatings Industry Association submitted the related report in June 2006 to State Tariff Committee.7% 2.610kt/a.reduce 40% of acid. Guangxi Pinggui PGMA Co.6% 66.2% 2. Ltd.478 22 . Hunan Jintian Fertilizers and Chemical Engineering Co.633 31. the global capacity of Chlorination-Method titanium pigment increased from 1. From 1990 to 2000.390 N/A 0 N/A N/A 187.390 15..402 8. Ltd. 20% of electricity and 30% of water and basically avoid ferrous sulfate (major byproduct when ilmenite is used as raw material).016 22. Shandong Jinan Yuxing Chemical Industry Co.

Table I-3.000 783. There are three classes of country in terms of production capacity of iron oxide pigment in the world. The production capacity in China exceeds 800.97% 10. The production proportion of these two kinds is about 1:3.260.000t since 2005. Japan and India.000 Output (t) 256. iron oxide production mainly concentrates in Europe and America.2 Iron oxide pigment . Russia.48% 14.2.59% 25. 23 . France. Iron oxide pigment ranks the second in both production and sales volume in the pigment family.000 800.14% -7. The first class includes these countries: China.000 396.2. The annual output of iron oxide in China in 2005 reached 622. UK.000t.Historical development of iron oxide industry Iron oxide industry in China began in the 1960s.700t.000 545.Production situation of iron oxide pigment Production feature iron oxide pigment Production in the world There are generally two kinds of iron oxide products in the world’s market.000 622. Besides China. America. China is the largest producer of iron oxide pigment all over the world.I-3. Mexico and the South Africa and so on.2-1 Production capacity and output of iron oxide pigment in China in recent years Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Capacity (t/a) 600. It has been profoundly promoted by the Reformation and Openness and the Ninth Five-year Plan.58% 18.700 Growth rate of output (%) 8.000 416. The second class includes these: Canada.000 713.000 350.000 460. natural iron oxide pigment and synthesized one. Since the 1990s.000 365.000 278.90% 13. Regarding region distribution. the iron oxide industry in the world is leaded by three giant enterprises. Nowadays it has already well developed after 40 years’ growth.26% . Japan is the second major producer in Asia. And the detail is shown in the following figures. and its output amounts to half of the world. while the global output in 2005 was about 1. Extreme monopolization is the apparent feature in oversea production of synthesized iron oxide. Germany.83% 13. Spain.

The third class includes these: Norway, Austria, Chili, Venezuela, Brazil, Cyprus, Australia, The detail is shown as the following figures: Figure I-3.2.2-1 Iron oxide output of the first class countries in 2004

600,000

540,000

Output/t

400,000

250,000 80,000 100,000 150,000 80,000

200,000

0

China

Germany

England

USA

Japan

India

Figure I-3.2.2-2 Iron oxide capacity of the second class countries in 2004
20,000 15,000 20,000 15,000 15,000 15,000 15,000 15,000

Capacity/t

10,000 5,000 0

Canada

Russia

France

Spain

Mexico

South Africa

Among above countries, India develops quickly in recent years by taking advantage of raw materials, energy and cheap labor source. It has become a major producer of iron oxide in Southeast Asia. Germany, America, the UK and Japan rank in the first class in terms of product’s grade, marketing, price, comprehensive economic benefit and competition. Other countries come the second. Production in China China makes important contribution to the world’s iron oxide production. Iron oxide pigment in China has many specifications and a lot are exported. After all, there are no world-class brands of iron oxide pigment made in China. On this account, China ranks between the first and the second class. Regional distribution of iron oxide production in China Before the 1980s, regional distribution of iron oxide production in China was decentralized, and iron oxide manufacturers sporadically existed in the coastal area, the Central South China
24

Ltd.000 10. iron oxide production distributes in Shandong Province and Hebei Province in the north.000 41.000t.000 4.000 2. The total production capacity of iron oxide in coastal provinces and areas in 2005 reached about 600.000 3. amounting to 15%. of which iron oxide red is 455. Shanghai City.000 19.000 104.) are located in Zhejiang Province.000 153.000 38. transparent iron oxide and reprography magnetic particle and so on with the capacity of 24.2. and iron oxide black is 120. and their total capacity in 2005 amounted to nearly 58% of the national capacity. Jiangsu Province. Ltd.000 7.compound iron green. Jiangsu Province is the second where the Chinese largest manufacturer is located. Jiangsu Province and Shanghai City.000t/a amounting to about 3% of the total..000 2. From the middle 1990s on. the total production capacity of iron oxide series is currently 800.000t/a.000t/a.000 23.000 11. Most large-scale manufacturers of iron oxide pigment are located in Zhejiang Province.000 10.000t/a in 2005. the center of iron oxide production in China began to move to the coastal areas.000 32. The top three regions with the largest iron oxide production capacity were Zhejiang Province.000 2.000 33. iron oxide yellow is 200. Jiangsu Province. Zhejiang Province and Shanghai City in Yangtze River Delta.000t/a. and Fujian Province and Guangdong Province in the north.000 43.000 Province/City Xiamen Guangxi Jilin Guangdong Shanxi Sichuan Jiangxi Yunnan Beijing Harbin Ningxia Xinjiang Capacity (t) 11.000 Production situation of iron oxide pigment series in China i) Production capacity As confirmed. amounting to 75% of the national capacity. The rest are mica iron oxide. amounting to 57% of the total capacity. Typically.2-2 Regional production distribution of iron oxide pigment in China in Jul 2005 Province/City Zhejiang Jiangsu Shanghai Shandong Henan Hunan Anhui Gansu Hebei Xi’an Hebei Tianjin Capacity (t) 203.000 3.000 2.and Central China.000 8. Production capacities of iron oxide series from 2002 to 2005 is as follows: 25 . Three of the top ten manufacturers (Zhejiang Shenghua Group Deqing Huayuan Pigment Co. Table I-3.. amounting to 25%.000 36. Zhejiang Deqing Ferricoxide Pigment Factory& Zhejiang Haining Xiaoxiang Chemical Co. Centre China and Central South China. Zhejiang Province ranks the first with the production capacity about 203.000t/a.

000 4. The following table shows the situation of output of iron oxide pigment in the past several years.000 20.000 20.000 713. the process to produce iron oxide red with mixed acid method becomes more and more popular nowadays.000 2. In addition.000 200.000 2.000 2005 430.Table I-3.2.000 14.000 16.000 5. ii) Output Output of iron oxide pigment in China in 2005 reached 622.000 120.000 200.000 783.000 1.000 2.000 58.000 5.700t which.000 5. which makes the capacity of iron oxide red with mixed acid method amount to about 95% the total capacity.000 170.000 10. was increased by 14.000 2004 420.000 15.000 26.000 1.000 193.000 15.26%. Transparent iron oxide and iron oxide red also grow quickly at a speed higher than the average growth rate.000 The average capacity growth rate of iron oxide pigment in recent years is about 10%.2-3 Annual capacity of iron oxide series from 2002 to 2005 in China (Unit: t) Products Iron oxide red with mixed acid method Iron oxide red with sulphuric acid method Iron oxide red with dry method Iron oxide yellow Iron oxide black Mica iron oxide Compound ferric green Transparent iron oxide Reprography magnetic particle Total 2002 300.000 2003 393.000 1. The output in recent years increases rapidly with an average annual growth rate of 14. On the other hand.000 60.000 600.000 25. It is iron oxide black that has the largest growth rate in production volume in iron oxide industry. Capacities of iron oxide black and magnetic particle grow at the fastest speed in iron oxide series with the rate of 26%.000 1.4%.000 12.000 20.000 15.000 1.000 800. the capacities of iron oxide red with sulphuric acid method and iron oxide red with sulphuric acid method decline.000 100. 26 . compared to that of 2004.

700 19. These three series of iron oxide pigment totally took a great proportion which is almost 97%. and it is the only one having the capacity above 100. amounting to about 40% of the national capacity. quality.4 166.000 12.000t/a in 2006.000 21.600 2003 195. They own comparatively advanced technologies and capability of researching and innovation to produce high grade iron oxide pigment up to the world class.000 460.6 38.500 Annual growth (%) 12.000 545. the top ten have annual iron oxide capacity of 377.2-4 Output of iron oxide series in China in 2002-2005 (Unit: t) Product Iron oxide red Iron oxide yellow Iron oxide black Other Total 71.4 2002 170.Table I-3. Among all manufacturers.000 180.6 The average operating rate of the industry in 2005 was 78%.2.000 78.200 622.000 7.000 100.000t/a in China.000 122.2. among which iron oxide red.000t/a.000 416. Key manufacturers have been improving their products’ structure.000 236. There are stable export channels in China. The production structure of specific iron oxide pigment is shown as follows: Figure I-3. 27 . Here are the top ten manufacturers in China.000 2004 205.2-3 Production structure of iron oxide in China in 2005 Other Iron black 20% 3% Iron red 39% Iron yellow 38% .000t/a to 100. Jiangsu Yixing Yuxing Pigment Factory is the largest manufacturer of iron oxide pigment in China with the production capacity of 100.Introduction to manufacturers of iron oxide There are about 140 manufacturers producing iron oxide in China with the total capacity of around 800.000 210.000 t/a.400 8.000 2005 243. iron oxide yellow and iron oxide black respectively amount to 39%. instrument detection and transport condition to catch up the developing pace in developed countries.000 30. and export volume increases yearly.000t/a.4 14. 38% and 20%. Production scale of these top ten ranges from 10.

000 40.000 N/A 354. This is the bottle-neck of iron oxide industry in China confronts: there are too much manufacturers producing iron oxide in a small scale.2-5 Top ten manufacturers in China in 2006 Launch No.000 20. This situation leads to the problem that most of iron oxide pigment produced in China is primary products with comparatively low quality and weak competitiveness in the international market.000 N/A 27.635 30. Jiangsu Changshu Ferroxide Factory Zhejiang Deqing Ferricoxide Pigment Factory Shenzhen Elementis Pigment & Chemical Co.357 N/A N/A 1.000 15.. Ltd.080 3.297 35. Hunan Three-ring Pigments Co. Ltd. Private manufacturers become the leader of iron oxide production.394 2. Ltd. Consequently. Production in small-scale manufacturers can not catch up with the pace of the development of the world’s iron oxide industry. 28 .019 N/A 11. production of iron oxide in China is too scattered to have unified management.222 38.000 Zhejiang Haining Xiaoxiang Chemical Co. iron oxide industry in China has experienced transformation in manufacturer structure.850 N/A 1.000 20. and many small-scale producers come forth.000 40.These manufacturers do not have enough capital to enlarge their production or to improve their technology.257 22. Ltd Total Entering the 20th century. there is much room for non-state-owned enterprises in this industry.036 N/A N/A Output in 2005/t 62. 1 2 3 4 5 6 7 8 9 10 Company name time Jiangsu Yixing Yuxing Pigment Factory Zhejiang Shenghua Group Deqing Huayuan Pigment Co. Bayer Shanghai Pigments Co.200 100. Further more. Shanghai Yipin Pigments Co.000 92. the rest one hundred and thirty all have the capacity below 10. Since that iron oxide industry does not have economic assistance from government any more after China came into the age of market economy..000t/a.616 211.154 N/A N/A 11.2. Ltd Hangzhou Xiaoshan Yongfeng Chemical 1977 1993 1965 1931 N/A 1990 1997 1958 1994 1998 2006/t·a Capacity in -1 Output in June ‘06/t 5.Table I-3. Apart from the top ten manufacturers. they are not willing to spend adequate effort on environmental protection during their iron oxide production...650 1. Ltd...

There are two lithopone producers in Guangxi Province with the total capacity of 70.2% of the total capacity of lithopone in China. and they are Liuzhou Zinc and Guangxi Yuanjiang. The total output of lithopone in China was 250. Guangzhou Huali-sachtleben is the top producer in China with the capacity of 62. zinc oxide. when it was widely applied in coatings industry. and their total output accounts for about 67% of the nation.3 Lithopone Lithopone is a kind of white pigment. Xiangtan Hongyan and Hunan Linxiang.Historical development of lithopone industry Lithopone first appeared in France in 1850. and barium sulfate.000t/a accounting for 18. Hengyang Meilun. They are Changsha Fengchao. good whiteness and masking power. .000t/a.5%. In 1996 Germany Sachtleben stopped domestically producing lithopone. After the 1970s lithopone almost disappeared in the coatings industry in developed countries. Major regions producing lithopone include Hunan Province. 29 . low Mohs hardness. There are 14 active manufacturers of lithopone in China in 2006. There are five lithopone producers in Hunan Province with the total capacity of 95. lithopone was gradually replaced by titanium oxide from the 1950s on. Since titanium oxide has the better performance than lithopone.I-3.Current production situation of lithopone Currently China is the only producer of lithopone in the world with the capacity of 340. It has properties of low oil absorption.2. which was the end of lithopone production in advanced countries. And it is a mixture of zinc sulfide.000t/a in 2005.000 tonnes in 2005 and the operating rate was only 73. Guangxi Province and Guangdong Province.000t/a. . Xiangtan Niutou.

. Ltd. Hunan Xiangtan Hongyan Chemical Co. Ltd.097 21. Hebei Xuri Industry Co.000 2005 61. Ltd.708 19.460 16.. Liuzhou Zinc Products Group Hebei Yuhuan Industry Co.138 28.000 16...915 33. Ltd.000 40.Manufacturers of lithopone Table I-3. Ltd..410 Output(t) 30 .2. Hunan Xiangtan Niutou Chemicals Co.140 16.000 20.000 30.616 23. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Producer (t/a) Guangdong Guangzhou Huali-sachtleben Chemical Co.000 20. Guangxi Wuzhou Yuanjiang Lithopone Co.330 13. Hengyang Meilun Pigmental Chemical Co.302 2004 60.000 4.568 20.2. Ltd. Ltd.000 10....389 16. Ltd.218 2005 250.008 12.600 16.000 30.000 25.766 15.424 10. Shandong Qingdao Baiyu Chemical Industry Co.3-2 Lithopone manufacturers in China Capacity No.201 5.000 20. ltd.000 2004 235..620 23. 62.560 2003 59. Hebei Yongming Lithopone Factory Hunan Linxiang Chemical Plant Yunnan Malong Wanqi Chemicals Co.000 20.318 15.Table I-3. Shanghai Jinghua Chemical Co.3-1 Output of lithopone in the recent three years Year Output/t 2003 226.000 20.604 9.782 5..937 22.. Ltd.000 23. Hunan Changsha Fengchao Pigment Chemical Co.362 18.000 .103 20.000 15. Ltd.

6% Lemon chrome yellow 20.2.612 3.5% 82.I-3. 31 .2.4-1 Product structure of chrome pigment in China in 2005 Other 15.8% There are 16 active producers of chrome pigment in China in 2006.790 36.4 Chrome pigment China is the largest producing nation of chrome pigment in the world with the capacity of 40.000 Output/t 36. was the top producer of chrome pigment with the output of 6. Table I-3.697 1. Ltd.5% 75.4-2 Specifications of chrome pigments in China in 2005 Product Chrome yellow Lemon chrome yellow Molybdate red Zinc yellow Other Total Output/t 18.6% of the total output in China. Jiangsu Shuangle Chemical Pigment Co.600 Figure I-3.2.1% Chrome yellow 49.348 5.068 tonnes in 2005 accounting for 16.000 40.2.7% Molybdate red 10.9% Table I-3.000t/a accounting for about 40% of the total global capacity.981 30.600 32.000 40..153 7.8% Zinc yellow 3.4-1 Output of chrome pigment in the recent three years Year 2005 2004 2003 Capacity(t/a) 40.342 Operation rate 91.

Table I-3.2.4-3 Active producers of chrome pigment in China (Capa., t/a; Prod., t)
Capa. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Producer Jiangsu Shuangle Chemical Pigment Co., Ltd. Shanghai Chrome Yellow Pigment Factory Chongqing Jiangnan Chemical Co., Ltd. Shandong Penglai Xinguang Pigment Chemical Co., Ltd. Henan Xinxiang Highland Pigments Co., Ltd. Hunan Star & Moon Pigment Liability Co., Ltd. Jiangsu Taizhou Zhongjian Industry Co., Ltd. Jiangsu Suzhou Industry Park Chuangyi Pigment Factory Shanghai Junma Chemical Co., Ltd. Guangdong Xiangyuan Chemical Architecture Material Co., Ltd. Zhejiang Hangzhou Yingshanhua Pigment Chemical Co., Ltd. Anhui Guangde Fuli Dope Factory Tianjin Beacon Pigment Co.,Ltd. BeiJing Jingcan Pigment Chemical Co., Ltd. Shandong Jinan Ink Factory Zhejiang Hangzhou Baihe Chemical Holding Group. Total 05' 7,000 5,000 5,000 4,000 3,000 2,500 2,500 2,000 2,000 1,500 1,500 1,500 1,000 500 500 500 40,000 Output ‘05 6,068 4,523 4,321 3,923 2,847 2,507 2,305 2,059 1,707 1,550 1,326 1,209 935 525 415 398 36,618 Output ‘04 5,399 4,462 4,418 3,918 2,783 1,502 2,425 1,731 1,700 200 1,490 1,285 800 484 185 200 32,981

32

In 1903 Lake Red C (C.0% Europe 33..0% Japan 14.I-3. In 1954 Ciba-Geigy Co. where the capacity respectively accounted for 29% and 19% of the world.I.0% North America 33. 33 .0% Comparison between organic pigment and inorganic pigment Compared to inorganic pigment. Pigment red 53:1) was developed.0% Other countries 13. was explored and sold as sodium salt. Ltd.2. Figure I-3. in Switzerland developed yellow and red azo pigment with good thermal stability and non-migratory. A milestone of organic pigment in its development is that blue phthalocyanine pigment appeared in 1935 and then green phthalocyanine pigment was put into the market in 1938.2. In 1911 Pigment yellow 12 (Benzidine yellow) was developed.5 Organic pigment Production of organic pigment mainly centralized in North America and West Europe. In 1910 Pigment Hansa yellow was put into the market. About 67% of organic pigment in the world were consumed in Europe and America. Lithol Red.Historical development of organic pigment In 1899 the first organic pigment.5-1 Distribution of high-grade organic pigment in the world in 2004 South America 7. organic pigment has better performances as follows: Vivid color light High color intensity Good transparency Good chemical stability Various chromatograms Many varieties Less poison .

Ltd.. accounting for 39. and some new organic pigment for plastic and high-glade coatings are being developed. orange and red. About 35% of the total producers in China have reduced their output of organic pigment because of the rising price of raw materials and harsh competition in Chinese market.585 tonnes in 2005. the sales value in China only accounted for 20% of the global sales value in 2005. among which about 120 are produced routinely. Currently Chinese producers attach more importance to plastic and high-grade coatings.Current production situation of organic pigment China is the largest producer of organic pigment in the world with the output of 156.9% of the world.... Ltd. Ltd. accounting for above 60% of the total output in China.. 34 . developed DPP red and orange.In 1955 DuPont Co. in Germany developed pigment benzimidazolone yellow. Many small enterprises stopped production or ran at half capacity. Chinese producers of organic pigment can produce about 250 specifications of organic pigment. in USA developed pigment quinacridine red and orange. However. and BASF Co. In the 1960s Hoechst Co. . In the 1970s isoindolinone pigment was developed by Ciba-Geigy Co. Phthalocyanine and diaminodiphenyl are the major specifications of organic pigment in China. Ltd. Ltd. In the 1980s Ciba Co.

Ltd.370 tonnes in 2005 accounting for 16..992 tonnes accounting for 62. Jiangsu Province...I.957 tonnes.2% of the total output of organic pigment in China. Shanghai Aster Printing Pigments (China) Co. The total capacity of the five ones was less than 500 t/a. Ltd..000 180. Ltd.I. There is no production of C.Table I-3. Hebei Jiehong Pigment Chemicals Co.. Hebei Meilida Pigment Industry Co. Jiangsu Shuangle Chemical Pigment Co.2. Pigment red 254...000 120.551 127.0% 20. in 2005 reached 10.... Guangdong Zhuhai Toyo Ink Co.. was the largest producer of organic pigment in China with the output of 25. and Zhejiang Baoyuan Chemical Co. Shandong Province and so on.. Pigment red 264 in China though its price is high in the international market.4-c) pyrrole pigment (DPP) in China with the specification of C. and most of their products were exported overseas. Ltd whose output together with that of BASF Dyestuff Chemical Co.5-1 Output of organic pigment in the recent three years Year 2005 2004 2003 2002 Capacity (t/a) 180.6% of the nation’s.212 Growth rate 9. one of its primary raw materials. Ltd. Ltd. in China. Ltd.. Shanghai Silian Industrial Co. Pigment red 254 is applied . The yield is low if the same technology with that of C. There are two reasons as follows: There is no production of 4-Cyano-Biphenyl.... Ltd. and their total output was 97.585 143. Ltd. was officially acquired by CVC CapitalPartners of England to establish Shanghai Aster Printing Pigments (China) Co. Hebei Province.Manufacturers of organic pigment There are above 100 producers of organic pigment in China and they are mainly located in Zhejiang Province.0% At the end of 2005 there were 5 producers of Diketopyrrolo (3... Tianjin City. In the middle of 2005 BASF Dyestuff Chemical Co.I.1% 13.000 160.000 Output (t) 156.. 35 .. Zhejiang Hangzhou Baihe Chemical Holding Group.. Zhejiang Changzhou North American Pigment and Chemicals Co. Ltd.000 96.0% 32. Shanghai City. Ltd. Clariant (Tianjin) Ltd. Ltd. In 2005 the top 10 producers of organic pigment were Zhejiang Changzhou North American Pigment and Chemicals Co.

. Jiangsu Shuangle Chemical Pigment Co.942 6.992 2004 21...370 14. Zhejiang Baoyuan Chemical Co. Shanghai Silian Industrial Co. Shanghai Aster Printing Pigments (China) Co. Guangdong Zhuhai Toyo Ink Co..2. Ltd..879 5.749 36 .177 90.655 13.782 8.788 4.251 4.862 5.5-2 Top 10 active producers of organic pigment in China Output (t) No.033 13.684 10. 1 2 3 4 5 6 7 8 9 10 Producer 2005 Zhejiang Changzhou North American Pigment and Chemicals Co.Table I-3. Clariant (Tianjin) Ltd. Ltd.. Ltd.733 4. Ltd.957 9.097 13. Ltd.994 4.410 5.383 6. Ltd.167 4.248 3. Ltd. Total 25..941 2.059 10..478 12.198 5. Zhejiang Hangzhou Baihe Chemical Holding Group.035 97.657 5.600 12.875 2003 17.282 3.873 68.576 4. Ltd.035 3. Hebei Jiehong Pigment Chemicals Co. Hebei Meilida Pigment Industry Co.

The largest in chrome pigment industry Jiangsu Shuangle is the top producer of chrome pigment in China with the output of 6. The largest pigment manufacturer in China Jiangsu Tianpeng is the top one pigment manufacturer in China with lead salt series products.1% of the national pigment output. 60 manufacturers produced titanium dioxide.6% of the total output of chrome pigment in China. Among these.605 tonnes of pigment in 2005 accounting for 5. whose actual output in 2005 was 62. and the rest 100 ones produced organic pigment. 140 ones specialized in iron oxide. 14 for lithopone. The largest in lithopone industry Guangzhou Huali-sachtleben is the largest producers of lithopone in China.915 tonnes of lithopone in 2005 accounting for 24. 37 .222 tonnes accounting for 10. This manufacturer produced 94.3% of the total output of lithopone in China.3 List of pigment manufacturers in China There were all together about 350 pigment manufacturers in China in 2005.2% of the total output of organic pigment in China.068 tonnes in 2005 accounting for 16.I-3.0% of the national output of iron oxide pigment.370 tonnes in 2005 accounting for 16. The largest in organic pigment industry Changzhou North America is the top producer of organic pigment in China with the output of 25. 16 for chrome pigments. which produced 61. The largest in iron oxide industry Yixing Yuxing is the top producer of iron oxide pigment in China.

Ltd. Guangdong Sanshui T&H Glaze Co.605 62.140 24.827 23.873 17. Yunnan Dahutong Industry & Trading Co.291 9.868 44.902 23.. Pan Gang Group Chongqing Titanium Industry Co. CNNC Huayuan Titanium Dioxide Co.249 16..355 18.103 20. Guangxi Pinggui PGMA Co.963 39.825 23.019 33.424 2. Ltd..097 21. Hebei Yuhuan Industry Co.020 5.412 17. Ltd. Shanghai Jinghua Chemical Co..423 16. Ltd.. Sichuan Lomon Corporation Jiangsu Taibai Group Zhenjiang Titanium Dioxide Joint-stock Co.862 38.708 19.222 61. Ltd Hunan Xiangtan Niutou Chemicals Co.. Ltd.999 10 11 12 13 14 15 16 17 18 19 Titanium dioxide Iron oxide Lithopone Iron oxide Titanium dioxide Organic pigment Titanium dioxide Titanium dioxide Iron oxide Lithopone.430 30. Henan Billions Chemicals Co.956 N/A N/A 17. Ltd.540 N/A N/A 32. Nanjing Titanium Dioxide Chemical Co..287 38. Jiangsu Yixing Yuxing Pigment Factory Guangdong Guangzhou Huali-sachtleben Chemical Co. Hunan Changsha Fengchao Pigment Chemical Co.616 2003 98. Ltd.643 22. Ltd.085 15. Ltd.138 4 5 6 7 8 9 48.206 18.410 8.884 38.016 22.620 23.. Ltd..828 35. Shandong Jinan Yuxing Chemical Industry Co.230 34.297 28..460 9.568 21.957 22.. Shenzhen Elementis Pigment & Chemical Co.254 23. Ltd..616 22.187 22.. Ltd...703 59.. Guangxi Cangwu Shunfeng Titanium Dioxide Co.008 14.024 17.800 60. Ltd. Ltd.460 30..560 10.657 19..633 37. Ltd.. Hunan Jintian Fertilizers and Chemical Engineering Co.651 N/A 8... Ltd.960 20 21 22 23 24 25 26 27 28 29 30 22.604 24.478 38 . 1 2 3 Producer Jiangsu Tianpeng Chemicals (Group) Co.201 15.782 21.449 17.054 N/A 14..402 15.029 N/A 19.397 32. cadmium pigment Lithopone Lithopone Titanium dioxide Lithopone Titanium Dioxide Lithopone Titanium dioxide Titanium dioxide Titanium dioxide Lithopone Organic pigment 37.758 38.976 15.880 15.330 20.234 N/A 16.915 2004 104.051 N/A 18.Ltd. Shanghai Yipin Pigments Co. Ltd. Hunan Three-ring Pigments Co.457 16.000 N/A 12. Hunan Hengyang Meilun Pigmental Chemical Co.318 N/A 10. ltd. Ltd. Jiangsu Changzhou North American Chemical Group Anhui Tongling Anada Titanium Dioxide Co. Ltd.588 23. Shenghua Group Deqing Huayuan Pigment Co. Ltd. Ltd. Shandong Dongjia Group Co.766 18...026 19.507 24. Hebei Xuri Chemical Co. Hebei Yongming Lithopone Factory Zhejiang Baihe Chemical Holding Group Product 2005 Lead salt series Iron oxide Lithopone Glaze products for ceramic Titanium dioxide Titanium dioxide Iron oxide Titanium dioxide Titanium dioxide 94.239 35.Table I-3.. Ltd.635 38.3-1 List of major producers in 2006 Output (t) No.

In general. Here is the price of titanium pigment in some areas in July 2006. But in July 2006. the quoted price was universally lower than RMB18. From winter of 2003 to spring of 2004. On the contrary.I-4 Price analysis of pigment in China . International market In the past several years.950/t and RMB20. the price of rutile type titanium pigment declined slowly along with the increment of its output. shut down some Sulfuric-Acid-Method production installations in recent two years due to the factors including economic benefit and environmental protection. of which about 170 to 180 kilo tonnes are rutile type. Under the condition of short supply in the international market. Sichuan Lomon and Hunan Yongli were put into production. By the end of the same year. When entering 2006. and the markup stayed between USD100/t and USD150/t. raised up the market price of titanium pigment again on January 1st. the other was that several sets of new rutile type equipment in Shandong Jinhong. Major manufacturers such as Millennium. the price of home-made rutile type products rose because of the shortage of supply. 4th biggest manufacturer of titanium pigment in the world. Meanwhile.050/t. the price of titanium pigment jumped four times in 2005 each with an increment of USD100/t to USD150/t. the price of rutile type titanium dioxide declined to some extent because of two reasons. Domestic market Similar to the international market.000/t. most manufacturers basically had no storage and the price of anatase type products universally went up with the markup of RMB300~500/t. Ken-mcgee and Huntsman. anatase type products were also very salable. Huntsman. demand for titanium pigment in the global market kept increasing steadily while the supply retrenched. In May 2005. the price of titanium pigment in Chinese market also fluctuated widely along with the supply situation. Millennium. etc. 39 . the price of rutile type products was between RMB19. At the beginning of 2003. One was that China imported 229 kilo tonnes of titanium pigment in 2003. 3rd. which was opposite to previous situation. which led to swift increment of the output of rutile type products. the 2nd. No new plants were established by large international manufacturers since 1997.Titanium pigment The price of titanium pigment is usually influenced by the supply & demand situation and the price of raw materials. 2006.

i) Force from the rise of production cost Raw materials for iron oxide pigment such as sheet iron.400/t. 40 .Table I-4-1 Price of titanium pigment in July 2006 Producing area Guangxi Liaoning Jinzhou Shandong Jinan Shandong Zibo Chongqing Gansu Henan Jiangsu Zhenjiang Jiangxi Sichuan Lomon Yunnan Hubei Wuhan Specification BA01-01 R501 R818 R-236 R224 R-215 BA010 R904 GA-100 R996 BA01-01 BA01-01 Price (RMB/t) 9. The price of sulphate and liquid alkali was up to RMB700/t. Price of energy and transport charge hiked around 30-40% in 2004. A turbulence happened in the international energy market in 2004. and that of nitric acid reached RMB1. transportation fee went up. are the very direct factors related its production cost. Diesel oil at that time was RMB4. In late March 2004.600/t in July in 2004.100 15.500 16.500 18.400 10. Other important production sources such as energy and fuel influnced the price of iron oxide pigment in those years. liquid alkali and nitric acid.500 10. and coal reached RMB610/t.Iron oxide pigment Price change in the past several years (from 2003 to 2005) Before 2003. and transport charge. which brought the rise of iron oxide pigment price. The price of these raw materials turned to rise in 2003.000 15. going up from RMB2.500 Packaging mode 25kg/bag paper bag 25kg/bag 25kg/bag paper bag 25kg/bag 25kg/bag 25kg/bag 25kg/bag 25kg/bag 25kg/bag paper bag Supported by the markup of raw materials. . However. the price of iron oxide pigment had kept declining. most manufacturers boosted their price of iron oxide pigment with a rate around of 20% as their production face the price ascendance of raw materials. sulphate.500 11. it began to climb up rapidly from 2003 with the rise of production cost and other factors.000/t.500 10. the price of rutile type titanium pigment will not decline in a vast scale but vary within a certain extent in the future. Simultaneously.000 16. In 2004 the price of raw materials was 3-4% higher from 2003. which led to the jump of energy price. energy.300 16.500 16. Sheet iron also became more expensive.500/t in February to RMB2.

. Price war in the iron oxide industry in China In the Chinese market for iron oxide pigment. energy and transportation. they considered competition as to defeat with one another in the market through lowering down the price. sheet iron reached 23%. never to mention co-operate with each other. manufacturers had no choice but to lowered down their price so as to expand their market.000t have been established in China. a price war in the iron oxide industry is raised by domestic manufacturers from the late 2003 to late 2005. while the rate for iron oxide pigment was only 9. the growth rate of raw material. the price has been keeping climbing. There are several factors for the price war. As a result. the piece rise was necessary and was in accordance with the development trend of iron oxide industry. Manufacturers are required to spend more expense on environmental protection and resource sustainability. The rise of price in the past years benefited the heathy development of iron oxide pigment industry in China. As a result. a reasonable price system was formed. In addition. Later on. commercial protectionism revived to cause the price fluctuation of iron oxide pigment.The exceeding enlargement of production capacity. In front of competition. Since that the average profit declined. having been formed different quality grades of iron oxide products. There is a deep gap in the price growth rate between iron oxide products and raw materials. which decreased USD20 million of rebate taxation of the iron oxide industry.ii) Influence from regulation and policy Some relative regulations and policies of the government had influenced he price of iron oxide pigment. Instead. which benefits the stable functioning of the price of iron oxide pigment. The government issued some rules to regulate the production security of iron oixde pigment. in the early 2005. new production lines with total capacity near 50. According to statistics. most manufacturers of the industry raised up their price. 41 . From 2003 to 2005. on the other side. many manufacturers did not take measures to promote their product quality or improve their technology. . a so-called suggestive industrial price was put forward for the first time by the Committee of Iron Oxide Industry in China with the view of keeping basic profit and stabilizing the market of the industry. The tax reimbursement for export in the early 2004 was reduced by 2 percentage point. Nevertheless. on one side.7% during 2003 to late 2005.The ideology about competition of manufacturers in the industry was misled.

The stabilization benefits from the following factors: i) Balance between supply and demand of the industry According to estimation. demand for iron oxide pigment in China will keep rising. Meanwhile. Consumption of this year will be upped by 4-6% from 2005.000 600 6.600 680 synthesis 6.000t during the whole year. development of the downstream industries of iron oxide pigment such as building materials.Table 1-4-2 Suggestive industrial price of iron oxide pigment in 2005 Mixing acid Item method Iron oxide red Iron oxide yellow Iron oxide black Sale in domestic market (RMB/t) Sale in overseas market (USD/t) Sale in domestic market (RMB/t) Sale in overseas market (USD/t) Sale in domestic market (RMB/t) Sale in overseas market (USD/t) 6.300 760 Sulphuric acid Additive Liquid-phase Price situation in the first half of 2006 The price of iron oxide pigment turns to keep stable in 2006 on the whole. Their production is conducted under dangerous condition and causes serous pollution to the surroundings.000 740 method 5. the market of the entire industry will stay balanced in the short term.Demand situation of iron oxide pigment With the smooth rapid development of domestic economy in China.000t. 42 . It is assessed that the total domestic demand of iron oxide pigment in China will be around 250.100 750 process 5.000t in 2006.000t because of large quantities of investment in the industry and the enlargement of production capacity. circulative economy and sustainable development of the country. The total consumption volume will be about 600. production of iron oxide pigment had been boosted with a total increase at least over 100. Closing them will benefit the stability of iron oxide price. Usually. . Except some particular oversupply and short-supply in some places some time. those small-scale manufacturers produce low quality products with comparatively high cost. the supply and demand of iron oxide pigment in 2006 keeps balance on the whole. Most small-scale manufacturers will be closed by the end of 2006. .Production capacity of iron oxide pigment During the past several years. coatings and rubber will be controlled at sound pace under the condition of macro-adjustment. with the export volume of more than 600.

600 580 6. the production capacity of iron oxide pigment has been doubled over reaching 800. export price of iron oxide has begun to go up. The over capacity comes forth and brings in pressure for the iron oxide industry. the State Department issued a policy in the early of the year that production with capacity below 5. this is in 43 . oversea transport will cost more with the rise of oil price in the international market. the Chinese government pays more attention to protection of environment and natural resources and production security. According to statistics.000t/a will be not allowed. ii) Policy of macro-adjustment for iron oxide pigment During the past 5 years. the states speeds up the pace of macro-adjustment for iron oxide industry.800 700 method 4.560 670 synthesis 6.000 730 process 5. Here are the details: Table 1-4-3 Suggestive price of the iron oxide industry in the third quarter in 2006 Mixing acid Item method Iron oxide red Iron oxide yellow Iron oxide black Sale in domestic market (RMB/t) Sale in overseas market (USD/t) Sale in domestic market (RMB/t) Sale in overseas market (USD/t) Sale in domestic market (RMB/t) Sale in overseas market (USD/t) 5.Transportation efficiency for iron oxide pigment Transportation efficiency for iron oxide pigment has been strengthened in 2006 a lot after the transportation structure is gradually optimized.250 750 Sulphuric acid Additive Liquid-phase According to export situation in recent years. On one side. Many measures are taken as macro-adjust the industry.300/t at present from the original RMB3. iii) Support from production cost Production cost of iron oxide pigment is upped nowadays and this helps the stabilization of price. The implementation of the policy will effectively temper the pressure of oversupply and benefit the stabilization of iron oxide price. The average export price in 2005 was about 9-16% up from 2004. Some manufacturers put forward a suggestive price again in 2006. For example. As mentioned before. In the face of this.800/t. the production cost is up to RMB4. which asks for higher cost for iron oxide pigment production..000t/a. The cost rise of iron oxide pigment supports the price to stay reasonably high. At the same time. This guarantees the requirement of transport for export in each region of China. The improvement of transportation will also benefit the price stabilization.

this individual change won’t affect the whole price trend of stabilization. coil. On the other side. The average export price of lithopone in 2005 was RMB3. For example the prices of Zinc oxide.230/t.500/t in May 2005. but also proves the successful development of Chinese iron oxide industry. specification and application in the international market. Influenced by the markup of raw material. However.accordance with the price raise of international iron oxide series. RMB230/t over than that in 2004.260 20. major export enterprises such as Guangzhou Huali-sachtleben. 2006 takes developing economy smoothly and rapidly as the theme. and 90% from those in 2004 respectively. The price stabilization of iron oxide pigment in China will promote the development of domestic economy to grow soundly and harmoniously since that the permanence of the iron oxide industry plays an important role in the domestic economy. and the profit was about RMB35/t. fuel oil.664 N/A Export price 17.1% more than that in 2004. which was 11.110 13. 22%. the price of iron oxide pigment will keep stable in China in the near future.052 44 . 30%. 25%. Xiangtan Niutou and Hengyang Meilun adjusted the export price to RMB3. .027 13. 20%. their prices will keep rising in the following years. Table 1-4-4 Price of chrome pigment in the recent three years (RMB/t) Year 2005 2004 2003 Domestic price 15. Further. Since that above raw materials are all non-renewable resources.400/t~RMB3. it not only brings in more profit for the country.Lithopone The average price of lithopone in 2004 was about RMB3. Forecast on the price of iron oxide pigment On the whole. Guangxi Yuanjiang.000/t.845 Import price 26.061 14. The price of raw materials for lithopone rose rapidly in 2004 and 2005. sulphuric acid. Chinese iron oxide is generally accepted and recognized in quality. .110/t in China in 2005. The price of iron oxide pigment in some part of China and price of some particular manufacturers will vary and may even fluctuate a little in a certain period in future. the price will be adjusted to meet the requirement of the demand and supply.601 11.Chrome pigment The price of chrome pigment was about RMB15. The cost to produce lithopone had increased RMB535/t only from January to March in 2005. As the first year of the 11th Five-year Plan in China. zinc dust and potassium permanganate in 2005 were up by 25%.

The import price of chrome pigment was about 1.330 4. one kind of raw material for the production of inhibitive pigment. .130 N/A Export price (USD/t) 4. The growth rate of the price of sodium molybdate.130 4. and its cost accounts for about 50%-60% of the total production cost of the two ones. reached about 30%. and that of zinc oxide.600/t than that at the end of 2005 which was about RMB9.5 times more than the export price. one kind of raw material for producing molybdate red.Organic pigment Table 1-4-5 Import and Export price of organic pigment in the recent three years Year 2005 2004 2003 Import price (USD/t) 5. copper. Plumbous chromate made of lead is the major constituent of chrome yellow and molybdate red. The price of domestic lead increased almost RMB3. the growth rate reached 40%. reached 20%. zinc. aluminium and lead.520 5.200/t.050 45 . After the Spring Festival of 2005 the production cost of chrome pigment rose in vast scales because of the price rise of nonferrous metals in international market including gold.

321/t. ii) The growth rate of domestic output was higher than that of consumption. The modes of trading of titanium pigment in China in 2005 are listed in the following table. China must import a large amount of titanium dioxide with high quality from abroad to meet the domestic demand.425 tonnes at the price of USD1. As a result. however. the export volume of Chinese iron oxide. so enterprises turned to exploited international market for relieving domestic competitive pressure. In 2005. while the average export price increased 18%. entrepot trade by bonded area. lithopone and Chrome pigment has been far more than the import volume of them. the import business of titanium dioxide can basically keep balance with the export business because a part of import business is carried out by the trading modes of processing and assembling trade. During 1998~2004. In 2005. 66% of importation trade of titanium pigment of China was carried out by ordinary trade. etc. Judging from the mode of trading. processing with the imported materials. the situation indicated that the gap between the import price and export price is shrinking gradually. The export volume increased 67% over that in 2004. The average import price in 2005 increased 6% over that in 2004. which led to the fact that home-made products substituted some of imported titanium dioxide in some end use segments. However. The import price was 1.4 times as the export one.I-5 Import and export situation of pigment in China I-5. Modes of trading For a long time. and totally exported 157. the export volume increased at a very high year-on-year growth rate. the import volume of titanium dioxide in 2005 decreased for the first time within the past eight years. while the import volume declined 9% than 2004. the import volume decreased. Several factors led to the different situation: i) The output of home-made titanium dioxide grew rapidly and the quality was improved than before. the import volume of titanium dioxide kept increasing at the average annual growth rate higher than 20%. 46 . while 98% of exportation trade was by ordinary trade mode.835/t.736 tonnes of titanium dioxide at an average import price of USD1. China imported 227. at the same time.1 Titanium pigment For a long time. the import volume of titanium dioxide has always been larger than the export volume.

The import volume of titanium pigment from the four countries in 2005 accounted for 75% of the total import volume. Export to other countries is comparatively dispersive and generally lower than 7 percent of the total export volume.97 18. The second biggest importation region was Oceania.863 1.56 6.565 3.04 2.14 100.99 0. 47 .932 9. Nearly 50 percent of the imported titanium dioxide in 2005 was from Asia.39 31.561 574 0 1 124 302 157.19 100.1-2 Trading regions of Chinese titanium dioxide in 2005 (broken down by continent) Import Region Asia Oceania Europe North America Latin America Africa Total Volume/t 114. Australia.129 776 560 0 227.574 31.37 0.38 1.34 0.947 48.Table I-5. Table I-5.8 1.425 Export Proportion /% 40.45 11.20 0.21 15.319 14.01 0 100 Volume/t 63.36 0 0. accounting for 30 percent of the total export volume.366 157.773 35. the import trading partners are mainly Taiwan of China. 31% of titanium dioxide exported by China in 2005 was consumed in North America.08 0. and the second biggest exportation destination was North America.00 Trading partners of Chinese titanium dioxide in 2005 As to the trading partners. The most important export destination of Chinese titanium pigment is the USA where 48.622 56.301 0 227.25 0 100 Volume/t 154.00 Regions of trading Among the trading regions.02 9.425 Export Proportion /% 98. Asia takes the biggest share of trade volume of Chinese iron oxide and titanium dioxide.735 Proportion /% 66.516 3.736 Proportion /% 50.316 2.01 0.84 14.1-1 Trading modes of titanium pigment in China in 2005 Import Mode of trading Ordinary trade Processing with the imported materials Entrepot trade by bonded areas Processing and assembling trade Others Customs warehousing trade Petty trade in the border areas Total Volume/t 150.33 24.923 22.121 tonnes of titanium pigment was exported.08 6. which was at the same time the Chinese export destination with 40% of the exported titanium dioxide of China. Japan and USA.099 28.178 26.

Table I-5.1-3 Export destination of China’s titanium dioxide in 2005
Destination America South Korea Turkey Spain India Brazil Thailand Italy France Hong Kong Malaysia Pakistan Japan Australia Russia Indonesia Taiwan, China Belgium Netherlands Iran Germany Vietnam Saudi Arabia Bangladesh Argentina Philippine England Mexico Nigeria Singapore Columbia Canada Egypt Syria Israel Poland Others Total Export volume/t 48,121 11,381 9,996 9,176 8,563 5,235 4,503 4,132 4,105 3,377 3,368 3,250 3,141 2,936 2,442 2,166 2,128 2,037 2,021 1,988 1,904 1,849 1,565 1,224 1,138 1,135 1,099 1,003 943 925 859 811 775 766 679 580 6,101 157,422 Proportion/% 30.57 7.23 6.35 5.83 5.44 3.33 2.86 2.62 2.61 2.15 2.14 2.06 2.00 1.87 1.55 1.38 1.35 1.29 1.28 1.26 1.21 1.17 0.99 0.78 0.72 0.72 0.70 0.64 0.60 0.59 0.55 0.52 0.49 0.49 0.43 0.37 3.86 100.00

48

85 1.898 56.207 7.308 227.276 4.60 22.48 9.46 1.369 2.18 2.26 5.Table I-5.420 50.84 0. China Australia Japan USA Germany Malaysia England Saudi Arabia Singapore France Spain India Mexico Finland Czech Republic Others Total Import volume/t 61.43 3.042 4. Qingdao Customs and Huangpu Customs.75 1.00 49 .822 7.460 1.082 7.97 1.759 4. Export ones included Shanghai Customs.280 1.552 29.886 6. Table I-5.907 1.253 6.43 3.15 9.035 22.02 2.43 3.32 1.75 9.00 0.36 100.04 1.18 24.00 Trading customs of Chinese titanium dioxide in 2005 Major import customes of titanium dioxide in 2005 were Shanghai Customs and Huangpu Customs.930 7.95 0.736 Proportion/% 27.1-5 Importation Customs of titanium dioxide in 2005 Customs Shanghai Customs Huangpu Customs Tianjin Customs Shenzhen Customs Guangzhou Customs Qingdao Customs Hefei Customs Ningbo Customs Nanjing Customs Dalian Customs Xiamen Customs Gongbei Customs Jiangmen Customs Shenyang Customs Chengdu Customs Shantou Customs Others Total Import volume/t 67.36 3.736 Proportion/% 29.83 12.89 100.223 5.820 7.86 1.08 0.163 1.73 2.221 2.17 1.24 3.078 227.716 3.1-4 Country/region where China imported titanium dioxide from in 2005 Country/region Taiwan.441 21.48 2.458 2.48 3.079 12.78 4.651 5.601 21.64 0.385 6.229 2.657 2.265 10.

000 tonnes.18 13. more and more enterprises get self-support import and export right.726 1.63 4.1-8.79 0.73 0.76 5. and the total volume of titanium dioxide of them occupied 70% of countrywide export volume.425 Proportion/% 34.28 0.1-6 Exportation Customs of titanium dioxide in 2005 Customs Shanghai Customs Qingdao Customs Huangpu Customs Nanjing Customs Shenzhen Customs Chongqing Customs Tianjin Customs Ningbo Customs Dalian Customs Guangzhou Customs Shenyang Customs Xiamen Customs Hefei Customs Chengdu Customs Others Total Import volume/t 54.275 2.471 3. importers of pigments are usually trading companies. The major importers of titanium dioxide in 2005 are listed in the Table I-5.068 9.25 100.240 560 450 435 320 387 157.11 2.462 38. the consumption volume of single consumer is small.60 24. which leads to the too high import cost if the consumers independently import pigment. Therefore. In general. Only a few large enterprises import pigment by themselves.47 5.20 0. there were 22 exporters who had their export volume of titanium dioxide exceeding 2. The major exporters of titanium dioxide in 2005 are listed in the Table I-5.28 6. So exporters of pigments are generally pigment manufacturers or their trading companies.913 10.00 Major importer and exporter of titanium dioxide in China in 2005 Along with the inpouring of foreign capital and then the enlargement of production scale in domestic enterprises.966 6.08 1.063 20.Table I-5.1-7. In 2005.36 0.188 9. 50 .29 0.

Henan Billions Chemicals Co.. Ltd. Co.55 1. Guangxi Tengxian Fuhua Chemicals Co. Zhejiang Ningbo Xinfu Titanium Dioxide Co.62 2.791 5. Ltd. Jiangsu Zhenjiang Fanhua Imp. Ltd. Guangxi Cangwu Shunfeng Titanium Dioxide Co..52 1.159 2.835 3.35 1.06 2.92 7. Ltd.11 2.. Guangxi Dahua Chemicals Plant Shanghai Siji Titanium Industry Co. Ltd..43 2.703 4.440 2..260 2.. Ltd...127 2. Shanghai Jianghu Titanium Dioxide Chemical Products Co.16 100.05 1. Henan Luohe Xingmao Titanium Industry Co.868 8.130 3.242 3.43 1. SINOPEC Jiangsu Imp. Ltd.723 5. Shandong Zaozhuang Tianyuan Fine Chemical Co. Ltd.. Ltd. Ltd.225 2.44 1. Shandong Dongjia Group Co. Ltd.54 4.266 2..329 3.62 2.11 2. Pan Gang Group International Trade and Economy Co.87 2. Pan Gang Group Chongqing Yugang Titanium Dioxide Co.46 1. & Exp. Ltd... Jiangsu Zhenjiang Titanium Dioxide Co. Ltd.00 51 . & Exp. Shandong Jinan Yuxing Imp.. Ltd.30 31.1-7 Major exporters of titanium dioxide in 2005 Exporter Sichuan LOMON Corporation Shandong Jinhong Titanium Dioxide Chemical Co.425 Proportion/% 10..189 11.334 3. Others Total Export volume/t 17. Co.63 5.37 1..392 2. Guangzhou Zhujiang Chemical Group Co.27 3. Ltd.. Ltd.47 5.. Guangdong Guangzhou Leitong Trade Co.Table I-5.717 6..529 4.766 8.045 49. Ltd. Ltd... Ltd. Co. Liaoning Maanshan Jinxing Chemical (Group) Co.059 157.296 2. & Exp.67 3. Gansu Sangkai Commercial Co. Ltd.

04 1.816 3. Ltd.38 1..24 1. Ltd.15 1.. Others Total Import volume/t 16. Guangdong Shenzhen Bao’an Foreign Economic Development Co.01 100.00 52 .34 0. Ltd.556 5 157.00 Volume/t 156.78 2.. Ltd. Ltd. Ltd. Shanghai Sanchang Imp. Shanghai Yuanxin Imp & Exp.Table I-5.1-9 Transportation mode of import & export of titanium dioxide Import Transportation mode By sea By road By railway By air Total Volume/t 202.445 9. Guangdong Guangzhou Huasheng Paint and Pigments Co.736 Proportion/% 88.35 2. Zhejiang Hangzhou Hemeng Chemical Raw Materials Co.00 100. Fujian Sannong Chemicals Imp. Ltd.352 4.63 1..300 25.03 0.620 6.15 1.425 Export Proportion/% 99.340 4.100 15.80 1. Guangdong Dongguan Foreign Processing & Assembling Service Co. China Agricultural Producer Goods Group C. Tianjin Tianbao International Logistics Co.70 1.23 0. Nippon Paint (China) Co. & Exp.90 1.07 1.07 6..568 8.88 1. Ltd.736 Proportion/% 7. Guangdong Guangzhou Nippon Paint Co.351 60 25 227.288 4.. Ltd..900 4.146 2..33 0.00 Transportation modes of the international trade of titanium dioxide Both imported and exported titanium pigments were mainly transported by sea. Co.43 0.02 51.83 11. Ltd. Trade Co..73 2... Ltd. Table I-5. Co.. Ltd. & Exp.67 1.78 4.220 5. Guangdong Guangzhou Kemeiqi Chemical Industry Co.524 4.882 3. & Exp.099 3. Jiangsu Huihong International Group Cotton Knitwear Imp.381 683 3.380 2. Ltd..42 100. Ltd.. Guangdong Yuntianzhi Trade Co.446 2.98 1.20 3.. Ltd.119 227.320 117. Co.. Liaoning Shenyang Jin’ao Chemical Trade Co.720 3.829 2.. Ltd. Ltd.. Ltd. Guangzhou Huiyang Foreign Processing & Assembling Service Co.. Dupont Trade (Shanghai) Co. Sichuan Chengdu Shide Plastic & Rubber Industry Co. Ltd.620 2.1-8 Major importers of titanium dioxide in 2005 Importer Shanghai Hailuo Building Materials International Trade Co. Ltd. Shanghai Meililian Chemicals Trade Co..

3% 5.000 96.1-1 Export situation of iron oxide in recent years Year 2001 2002 2003 2004 2005 Export volume (t) 170. In 2005.I-5.000.447.433 Growth rate of volume (%) 17. the import volume of iron oxide pigment jumped up to as much as four times of the volume in 2001.000. it not only 53 .6% 20. grade. On one side.1% 13. Import volume was 197.73/t in 2004 to USD556.675t iron oxide in 2004 with export value about USD162 million. China imported large quantities of iron oxide pigment than ever before.5% According to export situation in recent years. electronic and magnetic materials. In 5 years’ time.2 Iron oxide pigment Chinese iron oxide pigment contributes a great proportion to the global consumption of this pigment. oil.4% in 2005.350 183. The average export price in 2005 was about 9-16% up from 2004. Export value of iron oxide in 2005 was increased at a growth rate of 13. which made export value of USD183.800t in 2004. cosmetic and pharmaceuticals and so on. namely 53% of the total output. The situation of export and import in recent years is shown as follows: Table 1-5. On the other side.0% 30.500. export price of iron oxide has begun to go up. China exported 312. Export volume of iron oxide grew quickly at a rate of 5. As mentioned before.000 312.675 329.447. China still has to import high quality iron oxide pigment to meet the domestic demand from such fields as top grade coatings. Export price of iron oxide pigment was averagely increased more than USD40/t from USD516.2. chemical catalyzer.4% Export value (USD) 82. this is in accordance with the price raise of international iron oxide series.2% 13.000 109.000 200. there is a gap between Chinese iron oxide and the world’s top grade one in property. Although China is the top country in producing iron oxide pigment in the world and it exports it a lot.5% 48.324t in 2005 and 197.000 161. The difference between both growth rates resulted from the growth of export price. Chinese iron oxide pigment has achieved great growth in both import and export.000 240.2. 2/3 of iron oxide pigment in the international market is made in China. 329. Nevertheless. In the past two years.568.86/t in 2005.1 General situation of export and import General situation in the past According to statistics from the Chinese Customs Bureau. In recent years. the annual growth rate of export volume turns to exceed that of import year by year in the past.433t iron oxide pigment was exported.5% which was as twice as that of the export volume. I-5.000. Iron oxide industry in China generally depends on export.500 Growth rate of value (%) 17. price and service.

the export volume was increased by 11.1-3 Import and export situation of iron oxide in the first half year in 2006 and 2005 Export Growth 2006 2005(Jan-Jun) (Jan-Jun) on year Volume value 182. Table 1-5.490 87. but also proves the successful development of Chinese iron oxide industry.2 Export destinations and import original regions of iron oxide pigment The first major export destination of iron oxide is North America.834.90% 20% 93467.000.360 Growth rate of import volume (%) 57. And the export profit made in North American market in 2005 reached about USD63.769t and USD51. I-5. and the value was 4% off.200 197.000t this year.brings in more profit for the country.2.753t 44. Table 1-5.856. According to the import and export situation from January to June this year. It is estimated that the iron oxide industry will face a burden imposed on by export surplus.9t 105. UK.100 96.583.163. Export volume and profit of iron oxide in North America in 2004 reached 112.8% 43. import of iron oxide will off from the volume n 2005. Germany and Canada and so on.000 61.500 11.393.328.000. Other major export destinations are Europe. Southeast Asian and Middle East including Spain.632.69t 88.471 99500. of which 114. Chinese iron oxide is generally accepted and recognized in quality. and the export value will be over USD200million.2.800 197.000 69. China exported about 124. However.9% and the export value was increased by 20% in the first half of the year.553t iron oxide to in 2005 and export value of USD46.293t iron oxide to North America in 2005.78t 42.463.960 respectively.2% Import and export situation in 2006 It is estimated that the amplitude of export will continue exceeding that of import in iron oxide industry.324 Import value (USD) 47.2.933. specification and application in the international market.000 was made there.64% of the total exported iron oxide.617. The situation of export according to destination in recent two years is shown as follows: 54 .945 on year -6.400 138. the annual export volume will exceed 350. In contrast.4% 43. volume of import in the first half year was 6% off from 2005.000.1-2 Import situation of iron oxide in recent years Year 2001 2002 2003 2004 2005 Import volume (t) 61.000 82.1% -0. Europe is the second region where China exported 82.000.103t was exported to America.600 163407.06% -4% rate year 2006(Jan-Jun) 2005(Jan-Jun) rate year Import Growth According to analysis of import and export situation of iron oxide in the first half year 2006. amounting to 34.

001 329.788 5.190 485.000 500 183.126 6.593 13. 4.69 19.454 9.03 7.56 112. Hongkong is the region from which the Mainland of China imports the most iron oxide with a volume of 48.408 8.10 22.87 650.993 12.358 1.123 489.00 Iron oxide pigment is mainly imported from Hongkong.791 8.01 2.268.188 512.71 Average growth rate of price year on year (%) 12.851 11.433 Proportion (%) 34.984.Table 1-5.51 11.608. The following table shows the import situation of iron oxide from main countries and regions in 2005.965.553 56.978.40 82.2.82 1.25 11.201 12.52 553.53 2.292 312.40 22.00 19.350 504.672.40 100.769 51.454 62.97 1.339 8.000 564.095 8.000 36.000 511.129 12.293 63.496 5.50 124.135.060.201.904. America.80 Table 1-5.584 63.583. 55 .994 5.500 562.08 10.30 9.76 1.675 3.98 1. Japan and South Korea.000 561.92 16.000 161.52 77.795t in 2005.207 9.000 7.836 20.433 4.97 2. Taiwan Province.12 503.103 46.960 Export volume(t) 2004 Export value (USD) Average price (USD/t) 453.30 10.64 14.894 329.897 11.47 1.632.2-2 Export statistics of iron oxide pigment in China in 2005 Country/region America Hongkong Spain Germany Canada UK Netherlands Japan South Korea Turkey South Africa United Arab Emirates Australia France Other Total Export volume (t) 114.000 539.55 2.540 36.568.2-1 Export situation in the seven export destinations in recent two years Region Export volume(t) 2005 Export value (USD) Average price (USD/t) North America Europe Southeast Asian Middle East Africa South America Oceania Other Total 7.317.163.810 37.538 6.899.447.74 1.36 16.25 4.183 46.56 576.22 6.548.2.023 2.736 5. Imported iron oxide pigment from these five regions in 2005 amounted to nearly 80% of the total import volume.

738 25.2.2-3 Import original regions of iron oxide in 2005 Country/ region Kongkong America Taiwan Japan South Korea Germany India Netherlands Belgium Poland Canada Thailand Malaysia Australia Other Total Import volume (t) 48.861 8.493 2. 56 .513 15.085 21.324 Proportion (%) 26.38 2.Table 1-5.747 2.00 I-5. and export value of about USD61 million was made.447 197.35 1.28 1.973 1.58 4.099 3.3 Major provinces of import and export in China Major export provinces and regions of iron oxide pigment in China are the main production areas.70 0.294 1.068 14.375 1.029 2.795 44.09 100.478.20 13.07 0.48 1.64 8.39 24.64 1. Zhejiang Province is the top one where 119.807 3.57 11.57 1.2.06 1.635t iron oxide pigment was exported in 2005. The following is the export situation of main provinces in recent two years.

125 2.000 119.000 3.743 76.497.2.165 32.085 112.477.546 12.000 9.000 2004 Export value (USD) 58.747 3.140 40.815.827.478.946.000 69.293 172.759 16.633.674 1.685 46.746 38.012 52.632 29.800 0.540 9.570 7.491.973 145.930 21.680 3.700 3.000 Export value (USD) 61.044.675.512 107.990.000 2.900.000 22.168 50.734 67.136 45.690 33.500 155.061.120 78.660.060.846.430 15.898.000.100 9.000 8.625 53.596.Table 1-5.563.640 Volume (t) 118.891.900 409.793 14.095.731 860.301 613.685.877.550 12.070.427.199.060 36 183.979 51.542 297.430 1.455.405.600 54.350 Import provinces and cities of iron oxide are mainly located in coastal areas because of the heavy demand in the course of economic development in these regions.320.163.937 2.447.983 239.025 312.309 209.000 443.000 96.000 3.157.418 546.050.000 413.461.907.509 26.440 253.750 7.568.000 26.086 6.034 62.815.376.620 6.065. Guangdong Province keeps the top one to import iron oxide pigment in recent years.680 291.000 1.215.600 20. 57 .000 184.854 153.223 7.070 21.991 157.053 1.714 121.334.180.507 2.635 92.210 34.842 11.013 329.624 2.357.035.550 378.600 27.001 728.398 14.060 11.226 666.550 54.240.330 49.238 5.385 4.758.043.880 4.656 1.788 1.433.370 5.440 16.490 1.116 364.000 20. For example.235.070.3-1 Export situation of iron oxide in major provinces in 2005 and 2004 2005 Province and city Zhejiang Shanghai Jiangsu Shenzhen Hunan Guangdong Hubei Tianjin Henan Guangxi Shaanxi Anhui Shandong Hebei Gansu Jiangxi Liaoning Beijing Zhuhai Yunnan Jilin Shanxi Sichuan Suzhou Qingdao Guangzhou Fujian Hainan Dalian Other Total Volume (t) 119.829 4.940 85.244 87.051 1.440 5.200 70.798.629 161.745 2.000 1.

58 .76 0.80 644.56 176.985.424 57.763.60 860.2.00 2.344 24.453 1.2.553 137.92 3.748.19 28.04 26.572 8.10 8.96 4.954.390 9.933 2.276 20.796.356.768 35.564.40 6.463.590.663.63 480.400 640 82.45 7.Table 1-5.403.150.90 3.363 Volume (t) 54.08 197.90 1.820.859 226.131.65 2.490 1-5.48 51.009 111.218 122. Shenzhen Customs and Ningbo Customs and so on.49 60.258 11.914 9.395 484.357.55 6.997.34 1.00 865.451.00 2. Huangpu Customs and Nanjing Customs.04 42.445 4.795.393.60 186.315.720.88 374.00 1.180.714 139.28 5.522 13.72 7.118 2.434.09 1.169.353 28.534.324.934.04 197.336.46 0.70 7.3-2 Import situation of main provinces in 2004 and 2005 Province/ city Guangdong Zhejiang Jiangsu Beijing Fujian Shanghai Anhui Shandong Shaanxi Xiamen Shenzhen Guangzhou Henan Sichuan Hebei Tianjin Zhuhai Hubei Liaoning Qingdao Suzhou Yantai Hunan Shantou Dalian Wuhan Guangxi Wuhu Chongqing Total Volume (t) 64.106 15.318.405.541.937.355 1.947 201.98 112.502 3.11 49.56 258.586 60.70 739.368 301.935 87.284 1.692 428.408 731 1.153 30.194 305.527.805.350 11.804 726.331 754.331.872 402.94 2004 Sum (USD) 4.70 313.293. Major import ports are Shanghai Customs.49 47.80 173.20 29.470 1.00 0.03 4.329 368.326 3.222 40.26 150.889.85 9.384 3.838.30 2005 Sum (USD) 46.52 1.70 12.934.648. The following are specification of export and import of iron oxide pigment in major ports in 2005.87 630.50 7.587 205.643.02 0.885 1.717 96.261 1.497 308.021 87.4 Export and import Customs for iron oxide pigment Customs for exporting iron oxide pigment from China are mainly Shanghai Customs.941 3.556 46.30 48.70 78.34 20.473.30 445.178.786 86.847 436.883.60 520.572 571.

04 0.243 8.627 32.66 1.010 1.475 5.400 4.250 0.95 1.01 0.21 0.160 100.279 5.Table 1-5.324 Proportion (%) 31.17 9.2.150 0.680 4.990 4.080 3.04 100.66 15.410 0.49 1.247 713 555 117 157 329.999 31.819 2.500 4.059 7.249 819 506 335 287 323 197.38 0.60 1.5 International trading approaches of iron oxide pigment There are mainly two channels to export and import iron oxide pigment in China in recent 59 .290 12.298 3.336 2.363 11.608 49.570 7.894 8.2.821 9.273 6.650 0.00 Table 1-5.683 8.4-1 Export situation in major customs in 2005 Customs Shanghai Customs Shenzhen Customs Ningbo Customs Huangpu Customs Changsha Customs Tianjin Customs Nanning Customs Wuhan Customs Guangzhou Customs Nanjing Customs Jiangmen Customs Qingdao Customs Kunming Customs Other Total Import volume (t) 219.820 14.730 16.958 3.433 5.000 1-5.640 2.153 24.17 0.2.184 3.73 0.85 0.170 0.403 1.433 Proportion (%) 66.4-2 Import specification in major customs in 2005 Customs Shanghai Customs Huangpu Customs Nanjing Customs Guangzhou Customs Tianjin Customs Xiamen Customs Shenzhen Customs Ningbo Customs Qingdao Customs Jiangmen Customs Xi'an Customs Gongbei Customs Beijing Customs Hangzhou Customs Wuhan Customs Dalian Customs Other Total Import volume (t) 62.

Table 1-5.00 100. processing with the imported materials and so on.64 0.2.103 5.882 1.04 0. The most common one is ordinary trading mode.50 0. Therefore.00 0.02 0.490 196 118 60 3 2 0 329.06 0. 04 11.103t.02 100. the self.00 100.08 1. and the export volume by this mode in 2005 was 323.80 0.5-1 Trading modes of iron oxide pigments in China in 2005 Export Mode of trading Volume/t Ordinary trade Processing with the imported materials Petty trade in the border areas Customs warehousing trade Processing and assembling trade Entrepot trade by bonded areas Exported Commodities for contracted projects Other Total 323.26 0. Trade through agency is that iron oxide manufacturers or end users assign international trading companies as their agencies to export or import iron oxide pigment.947 83 85 22.00 0.04 0.324 Proportion (%) 83. Long ago. enterprisers of the iron oxide industry will be the key role of international trading of iron oxide pigment. Direct trade is to make tractions by iron oxide manufacturers themselves.72 0 16.324 Proportion/% 42. export and import of iron oxide pigment in China mainly depended on trading company and agency.433 Proportion/% 98.00 Volume/t 83.5-2 Transportation modes of import & export of iron oxide pigment in 2005 Import Transportation mode By sea By railway By road By air Total Volume (t) 165.32 1. However.18 0. amounting to 98.968 259 0 38 197.2. such as ordinary trading.54 43.years: direct trade and trade through agency.00 Import Table 1-5.export in recent years apparently takes on more.13 0.00 0.00 100.944 89.193 0 32.00 1-5.58 0.08% of the total export of iron oxide pigment.422 Export Proportion (t) 98.888 3. Iron oxide pigment is exported and imported in several modes in China.092 42 197.00 Volume (t) 323.640 12 329. China enterprisers including iron oxide manufacturers gradually become mature and have nurtured their business capability and experience. After China entering the WTO to take part in the global competition.2.6 Application of exported iron oxide pigment 60 .

2.25/t. 1-5. Exported iron oxide pigment is extensively used to paint brick. Although iron oxide pigment from China has better quality than before and is widely accepted in the international market.86 516. Here is the general situation of price in recent two years. Domestic demand for iron oxide with high quality is another reason for import development. export volume of iron oxide pigment in China has exceeded 300. title. chemical catalyzer. electronic and magnetic materials.73 7. In 2005 the average import price was USD443. Table 1-5. Firstly.56 6. There are several factors driving the rapid growth.80% Import price (USD/t) 443.7 Comparison of import and export prices There is a typical feature on price of iron oxide foreign trade in recent years. Unlike any other kinds of pigment. oil. Substantive investment in the industry from developed countries and multinational companies also promotes the development. the import price of iron oxide is much lower than export price. most of iron oxide pigment has properties suitable enough to be applied in building and construction in the international market.86/t.2.25 416. Grand projects such as Beijing Olympic Games in the 2008 and Shanghai World’s fair in 2010 demand a great dear of high grade iron oxide pigment with unique properties which has to be imported from abroad for infrastructure.8 Driving forces for import and export of iron oxide pigment Import and export of iron oxide pigment of China in recent years have succeeded in achieving apparent development. It is calculated that the import volume of iron oxide from these enterprises in 2004 reached 60% of the total export volume. there is still a deep gap between Chinese iron oxide and the world’s top grade one.2. Among those exported. 1-5.9 Problems on foreign trade of Chinese iron oxide in 2006 61 .7-1 Price of import and export in 2004 and 2005 Export price (USD/t) 2005 2004 Growth rate (%) 556. and concrete and wall and so on. which brings in opportunity and room for the development of its import and export.40% 1-5. Therefore. cosmetic and pharmaceuticals and so on. China has to import a large quantity of iron oxide pigment in urgent need for building materials.2.000t/a. Several world-famous multinational companies have invested in building iron oxide manufacturers in Mainland of China. In addition.Currently. demand for iron oxide pigment from the international market increasingly grows. Exported iron oxide is still scarcely applied in top grade coatings. export price was USD556. the import growth of iron oxide in China was impelled by individual and joint venture enterprises in the past three years.

Far away from the investment of 20% of the sales profit in developed countries. Further more. Investment in researching in the industry is insufficient. apparatus and iron& metal industry. the 62 . There are about 40 export manufacturers of iron oxide in China. the capital will outflow. the whole industry of iron oxide will have difficulty in exporting and absorbing oversea investment. Expense for iron oxide to export will be raised by the implementation this law. There are only three or four manufacturers with the export value exceeding USD10 billion. Lack of concentration for the industry to export Export of iron oxide pigment is not concentrated in China.Export of iron oxide in China has made achievement in promoting relevant fields to develop. earning foreign exchange and stimulating region economic development.360t/a. which imposes pressure on export. However. Poor independence of research and development Independent research and development is poor in the iron oxide industry in China.700t/a. comparative interest can be obtained through labor division of the globe. There are about 140 manufacturers producing iron oxide pigment in China at present. Capacity surplus and unbalance between demand and supply Chinese Commercial Affairs Department has ever surveyed over 900 series of products only to find that scarce ones are in short supply. Currently. the average production scale of these manufacturers is around 5. and trade deficit will happen. Consequently. there are still apparent and profound problems in the iron oxide industry. What will directly affect the iron oxide industry in China is that the law of REACH is to be implemented in the near future as scheduled. The following are some problems for Chinese iron oxide pigment to export. anti-subsidy and guarantee measure is spreading from traditional labor. and the average export volume of each is 2. Export value affected is up to USD5billion. Competition in the industry depends on price war.intensive industries to motor industry. Sharp trading conflict It is estimated that international antidumping. Half of the export manufacturers have their export value below USD500 thousand. Influence from RMB appreciation RMB appreciation which happens in these years brings in serious influence on the iron oxide industry which is on the path of low –value export. The iron oxide industry is also at the stage of oversupply. Investigation on those industries of overplus by the State Development and Reformation Committee reveals that 11 industries are oversupply or have the trend of oversupply. among which 10 have export value exceeding USD1million.

market strategy and establishment of modern enterprise system are to be improved in the iron oxide industry. few are brand products but most are primary products. Export will go on growing although at a lower rate.investment of iron oxide in China is generally 2%-5%. 63 . Among the 330. uncertainty such as factors on processing trade policy will affect the industry as well. Management. Others Besides. Iron oxide products in China lack of independent intellectual rights. Nevertheless.000t exported iron oxide pigment in China. export of iron oxide industry in China has many advantages and is promising in 2006 in the whole.

79.405 2003 86. where the export volume reached 31. The top export destination of lithopone was Egypt.055 1.I-5.377 2.3 Lithopone China is a net exporter of lithopone.391 79.870 2.693 64 .109 2.130 896 827 736 728 8. Table 1-5.441 2.8% of the national output was exported.981 2.959 5.3-1 Export volume of lithopone in the recent three years (Unit: t) Year Export volume 2005 79.290 tonnes in 2005 accounting for 39.000 Table 1-5.156 3.693 tonnes of lithopone was exported to oversea in 2005 which meant that 31.200 2.693 2004 85.290 9. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Egypt Belgium Algeria Thailand Syria Pakistan Iran Vietnam India Indonesia Bangladesh Morocco Saudi Arabia Italy Greece Russia Others Total Destination Export volume/t 31.3-2 Export destination of lithopone in 2005 No.547 2.3% of the total exported lithopone.

Table 1-5.3-3 Export destination of lithopone in 2004
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Egypt Belgium Algeria Iran Syria Thailand Pakistan Bangladesh India Vietnam Saudi Arabia Indonesia Morocco Brazil Italy The other 48 destinations Total Destination Export volume/t 35,244 9,975 5,029 3,755 3,430 2,867 2,794 2,719 2,184 2,048 1,858 1,567 1,303 1,302 1,135 8,195 85,405

Table 1-5.3-4 Active exporters of lithopone in 2005
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Traders Guangdong Guangzhou Huali-sachtleben Chemical Co., Ltd. Guangxi Wuzhou Yuanjiang Lithopone Co., Ltd. Hunan Xiangtan Niutou Chemicals Co., Ltd. Hunan Hengyang Meilun Pigmental Chemical Co., ltd. Hunan Changsha Fengchao Pigment Chemical Co., Ltd. Sinochem Tianjin Imp. & Exp. Corp. Hunan Xiangtan Hongyan Chemical Co., Ltd. Shenzhen Fujinhui Imp. & Exp. Co., Ltd. Guangxi Xinhua Imp. & Exp. Co., Ltd. Hunan Xiangtan County Foreign Economic Relations And Trade Corp. Sinochem Guangdong Co. Hunan Friendship & Apollo Co., Ltd. Guangzhou Changjia Imp. & Exp. Co., Ltd. Guangxi Liuzhou Zinc Products Group Sinochem Shanghai Corp. Hebei Hengshui Wukuang Chemical Co., Ltd. Others Total Export volume 05'/t 25,053 9,263 4,751 4,273 4,234 2,754 2,592 2,296 2,284 1,895 1,509 690 661 657 598 594 15,589 79,693

65

The export volume was 2. Japan. Holland and South Korea. Thus there is a deep gap in price between the two.3% of the total output in 2005. or primary products while the imported are mainly upper-scale and scarce products with high-quality. 42.0%.7%. 366 tonnes accounting for 35.316 tonnes accounting for 19. low-end. Export analysis China exported 15. 465 tonnes. 2.916 tonnes of chrome pigment in 2005 which meant 12.0%.4 Chrome pigment Import analysis China imported 2.511 tonnes of chrome pigment.880 tonnes. 16.041 tonnes.942 tonnes. The import volume was 1. The top 3 export destinations of chrome pigment were Spain. The top 3 import origins of chrome pigment were Hongkong. The exported chrome pigment are middle-class. 12.1% of the national chrome pigment consumption.6% of the total import respectively. 8. 66 . and South Korea. 1.I-5. 18.6%.5% of the total exported chrome pigment respectively.

Table 1-5.916 67 .041 465 366 169 161 152 149 120 108 51 35 8 3 3 2 83 2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Origin Hongkong Holland South Korea Brazil Japan Belgium Germany Canada Taiwan USA Thailand Italy Spain Indonesia Malaysia Others Total Volume/t 1.4-1 Import origins of chrome pigment in 2005 No.

095 708 667 600 513 465 454 386 369 329 279 247 244 189 79 64 20 1.511 68 .316 1.Table 1-5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Destination Spain Japan South Korea USA Russia Vietnam Canada Malaysia Thailand Taiwan Italy Bangladesh Indonesia Iran Germany Ukraine Holland Belgium Brazil Hongkong Others Total Volume/t 2.880 1.4-2 Export destination of chrome pigment in 2005 No.665 15.942 2.

0% Export/t 114. Most of the imported organic pigment were high-grade used in plastic. Table 1-5.5-1 Numbers of import origins of organic pigment in the recent three years Year 2005 2004 2003 Import origin 42 46 41 The export volume of organic pigment increased year by year with the annual growth rate of 11.5-3 Import and export details in the recent three years Year 2005 2004 2003 Import/t 31.7% 4. USA was the top export destination of organic pigment all the time in the past several years.000 tonnes. In 2005. Table 1-5. According to Chinese Customs’ statistics. high-level coatings and coatings printing etc. which showed that Chinese producers of plastic. their export volume of organic pigment accounted for above 90% of their output.9% -6.987 85. there were 7 import origins each having the import volume above 1.64% in the past three years.8% in the past three years. while there were 8 origins in 2004.0% -3.2% 23. ink and coatings chose more qualified homemade organic pigment. the declared export volume exceeded the output in several Sino-foreign joint ventures and foreign-owned manufacturers.5-2 Numbers of export destinations of organic pigment in the recent three years Year 2005 2004 2003 Export destination 107 97 97 Table 1-5.5% 69 . much higher than that of other Chinese producers.664 105.929 Growth rate -4.5 Organic pigment The import volume of organic pigment decreased year by year with the annual growth rate of -4.691 Growth rate 8.215 32.833 34.I-5. The imported organic pigment were mainly applied in plastic masterbatch and high-grade coatings. Insofar as we can see. 10-40%.

41 6.214.96 3. 1 2 3 4 5 6 7 Taiwan South Korea Japan Germany USA Hongkong Indonesia The other 35 import origins Total Origin Volume (t) 6.600 490.80 5.218.807.711.1 3.534.Import analysis of organic pigment Table 1-5.294.0 Price (USD/t) 3.900 4.100 3.5 4.8 3.70 5.0 1.456.20 3.50 5.286.033.35 2.39 2. 1 2 3 4 Trade method Processing with imported materials Ordinary trade Processing and Assembling Entrepot Trade by Bonded Area Other Total Import quantity/t 18.13 Table 1-5.214.330.1 32.2 7.71 2.0 3.622.634.8 2.994.400 1.642.287.800 Price(USD/kg) 3.033.888.72 5.300 4.180.000 1.462.55 5..89 9.52 Table 1-5.638.485.100 71.375.800 7.214.5-7 Trade method of the imported organic pigment in 2005 No.500 31. 1 2 3 4 Region Guangdong Province Shanghai City Jiangsu Province Shandong Province The other 19 import regions Total Volume (t) 19.17 11.12 3.0 31.5-5 Import origins of organic pigment in 2004 No.654.3 1.198.5-6 Major import regions of organic pigment in China in 2005 No.900 5.800 1.57 7.93 5.5-4 Import origins of organic pigment in 2005 No.5 1.0 1.147.833.800 Import price (USD/kg) 4.39 9.67 7.5 2.8 Table 1-5.27 5.0 4.100 6.19 8.52 70 .200 31.09 2.35 8. 1 2 3 4 5 6 7 8 Taiwan Japan Germany South Korea USA Hongkong Indonesia England The other 38 import origins Total Origin Volume (t) 8.000.

38 4.58 4.664.6 9.45 4.6 7.08 5.070.8 3.24 4.29 2.76 4.0 5.802..8 3.668.314.5 5.1 3.3 9.90 4.40 4.70 3.33 Table1-5.4 105.027.2 6.275.65 4.14 71 .0 3.37 5.323.9 3.44 4.14 4. 1 2 3 4 5 6 7 8 9 10 11 USA Japan Germany England South Korea Holland Belgium Indonesia Hongkong Italy Malaysia The other 96 export destinations Total Destination Volume (t) 17.15 4.14 3.056.1 Price (USD/kg) 4.7 9.5 37.692.6 3.399.0 Price (USD/kg) 4.54 3.014.3 8.8 9.Export analysis of organic pigment Table 1-5.630.74 4.567.6 39.740.730.34 3.352.84 2.071.74 5.987.5-8 Export destinations of organic pigment in 2005 No.9 7.9 3.6 4.894.86 4.5-9 Export destinations of organic pigment in 2004 No.1 3.27 4. 1 2 3 4 5 6 7 8 9 10 USA Germany Japan South Korea England Holland Italy France Indonesia Belgium The other 87 export destinations Total Destination Volume (t) 15.545.216.657.9 114.598.999.

92 4.664.44 4.568.504.33 Table 1-5. 1 2 3 4 5 6 7 Region Jiangsu Province Shanghai City Zhejiang Province Guangdong Province Shandong Province Tianjin City Heibei Province The other 19 export regions Total Volume (t) 24.67 4.133.956.0 24.302.99 3.1 23.9 4.400.985.9 10.1 5.57 4.Table 1-5.4 13.550.80 4. 1 2 3 Ordinary trade Processing with imported materials Processing and Assembling Other Total Trade Volume (t) 83.14 4.098.1 Price (USD/kg) 4.9 27.452.2 114.04 3.6 705.5 8.2 114.07 3.664.1 Price (USD/kg) 4.670.4 2.5-11 Trade method of the exported organic pigment in 2005 No.5-10 Active export regions of organic pigment in China in 2005 No.35 3.33 72 .69 3.73 4.

especially on China. The coastal regions become the production bases of iron oxide pigment for oversea enterprises whose production capacity reaches 120.I-6 Competitiveness of Chinese pigment industry Along with the accelerating marketization of Chinese pigment industry. It was estimated that the average annual growth rate of pigment demand in developed countries will be lower than 2%. quality of product. Changshu City and Taicang City in Jiangsu Province and Shenzhen City. For example. domestic titanium pigment industry is also challenged by large multinational companies. improving quality of product. the industrial competition among native pigment enterprises becomes very intensive. Such situation makes them pin their hope on Asia. environmental protection. The two plants include production base invested in by Dupont of America in Shandong Dongying and production base invested in by Astron of Australia in Liaoning Yingkou. etc. which leads to unprecedented competition between Chinese and oversea pigment enterprises. Total capacity of the two plants is 400kt/a. Chinese pigment enterprises had to conduct technical innovation. At present. the real threat to Chinese pigment enterprises comes from the large multinational enterprises. Chinese pigment industry is not so competitive in the international market. Bayer of Germany. The prices of energy sources and raw materials for pigment production rose in recent years. Fuyang City of Zhejiang Province. To survive in the keen competition in the future. Similar to the situation of iron oxide. More enterprises will be washed out because of the factors including environmental protection. and even completely change the pattern of this industry. The two projects will lead to the unprecedented competition in Chinese titanium pigment industry. at the same time. On the basis of the publicized plans. two ultra-large type Chlorination-Method Plants will be established. pigment industry in developed countries has already went into maturity age. during the “Tenth Five-year Plan”. However. accounting for 15% of the national capacity. 73 . Rockwood and Elementis of England have already established solely-funded enterprises and joint ventures in developed coastal cities in China such as Shanghai City. some world-famous iron oxide manufacturers entered Chinese market in succession.000t/a. high production cost. so pigment enterprises in those countries may not invest into capacity-enlarging projects in the future.

408 1.300 Organic pigments 48.000 1.436 tonnes.823 986.2% of total pigment consumption volume.480. Coatings industry was the biggest consumer of pigment.140.I-7 Consumption situation of pigment in China I-7. plastic. The year-on-year growth rate in 2004 was 29. the apparent consumption volume of pigment in China reached 1579.9% 29. but the growing speed was not even. occupying 51. In last year.9% 5. Table I-7.410. Pigment is chiefly consumed by coatings.9% 6. while it was only 6.9%.579.300 tonnes are inorganic pigment and only 73.6% 3.2% 7.037.1 Summary of consumption The consumption of pigment in China increased in the past years.506.773 1.7% Figure I-7. The increment of pigment consumption mainly comes from inorganic consumption growth because inorganic pigments accounted for more than 90% of pigment consumption.136 Total 936.1-1 Consumption situation of pigment in China in 2005 17.4% of pigment in 2005.238 70.136 tonnes are organic pigment.011 1.1-1 Apparent consumption of pigment in China in the past Apparent consumption (t) Year Inorganic pigments 2001 2002 2003 2004 2005 887.7% in 2005.3% 14.1% Coatings Plastic Ink Paper Rubber Others 74 .063.177 50.000 1. of which 1506. This was just the same as the situation all over the world.397 73. The following table and figure showed the consumption volume and consumption structure of pigment in China in the past.8% 9.788 1.436 Grow rate N/A 10.9% 51.011 1. even 95% in 2004 and 2005. paper making and rubber industries. ink. which totally consumed 82.212 76.

respectively. dispersivity and chalk resistance as well. titanium dioxide has the highest refraction coefficient which leads to some good optical performance such as the best masking power (opacity) and reducing power. On the aspect of reducing power. It also has good white content.02 2.00 1.6 6.1 6. rubber and cosmetic industries. Consumption of titanium dioxide in China during 2001~2005 still kept increasing with the CAGR of 13. it is considered as the best white pigment in the world and is widely used in coatings.56 and 4.2. In 1996.0 5. times as that of ordinary lithopone.1 Consumption situation of titanium pigment in China As titanium dioxide is nontoxic with advantages of best opacity.9 4.55 2. of modern Titanium Dioxide Rutile has been improved to a vast extent. such as white content. ink.76 2. The following table showed the comparison of performance of Pigment White.2 3 Refraction coefficient 2. paper making. the consumption volume of titanium dioxide in China was only 163kt.2 Introduction to consumption situation of each pigment I-7. Titanium dioxide has two kinds of crystalline forms including Anatase (namely A type) and Rutile (namely R type). In theory. the masking power of Titanium Dioxide Rutile and Titanium Dioxide Anatase is 5.93 1. Consumption of titanium dioxide in China increased rapidly. Properties.25 and 4.84 Reducing power Masking (relative value) power (relative value) 100 77 40 17 12 9 7 16 100 78 39 15 14 12 10 18 Among white pigments.81 times as ordinary lithopone. chemical fibre. The following figure shows the consumption situation of titanium dioxide in China in recent years.2 4. reducing power. Table I-7. white content and luminance brightness. 75 . masking power. The CAGR of titanium dioxide consumption volume was 23.6% although the speed of development was lower than that in the “Ninth Five-year Plan”.67 5. Titanium Dioxide Rutile and Titanium Dioxide Anatase are 6.37 2. plastic. while it increased to 379kt in 2000. The development speed of titanium dioxide consumption in China was much faster than the average level in the world.1-1 Comparison of main performance of Pigment White Density Pigment Titanium Dioxide Rutile Titanium Dioxide Anatase Zinc Sulfide Antimony Oxide Zinc Oxide Zinc subcarbonate Lead subsulfate Lithopone (g/cm ) 4. This should be attributed to the persevering endeavor of titanium dioxide manufacturers in the past 90 years.5% during the “Ninth Five-year Plan”.2.33.I-7.09 2.2 3. high luster and good dispersivity.

titanium pigment also has the most application to coatings industry in the pigment family. followed by ink. rubber and chemical fibre industries. etc.2.311 tonnes are pigment grade (People usually call pigment grade titanium dioxide as titanium pigment).8% of pigment grade titanium dioxide. titanium pigment can also strengthen the mechanical strength and adhesive attraction of lacquer film. prevent crackle. In 2005.0% Paint Plastic Paper Ink Rubber Chemical fibre Others . The above industries generally need Titanium Dioxide Rutile and some special Titanium Dioxide Anatase. Coatings (paint) industry is the No.4% 18. prolong the life of paint film. Besides the above. reaching 416kt. near 62% of titanium pigment was consumed in coatings industry.0% 4.8% 5. protect lacquer film from ultraviolet and water. According to statistics in 2005.0% 5.2. Here is the consumption pattern of titanium pigments in China in 2005. especially Titanium Dioxide Rutile.311 tonnes.1-2 Consumption pattern of titanium pigment in China in 2005 4. the apparent consumption of titanium dioxide in China was 752. good tinctorial strength. 76 .8% 0.Coatings (paint) Industry Coatings industry is the biggest consumption field of titanium pigment.1-1 Consumption volume of titanium dioxide in China in the past ten years 800 Apparent consumption/kt 700 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Titanium pigment was mainly consumed by coatings. quality and specification. Coatings. At the same time. plastic and paper making industries totally consumed 85.0% 62. coatings industry brings heavier pressure on titanium pigment on the aspects of quantity.Figure I-7. Along with the development of Chinese architecture and automobile industries. approximately accounting for 62% of total consumption volume.1 end use sector of titanium pigment. of which 670. plastic and paper making industries. Figure I-7. Coatings that are made of titanium pigment are technicoloured with many advantages including high masking power.

9% - . and it not only gives plastic products bright color but also good intensity. This happens because titanium pigment has perfect performance and is absolutely nontoxic and people in the world prefer the white or light color when they decorate things.1%.6% Growth rate -1. In recent years. which strongly stimulates the consumption of titanium dioxide. and during 2006~2010.5% Consumption/t 195 214 254 309 392 19. In 2005.2.Plastic Industry Plastic industry is the second biggest end use sector of titanium pigment. Table I-7. The annual consumption volume of titanium pigment in China is about 750kt.97% 9. weather resisting property and chemical corrosion resistance of coating. of which 150 kilo tonnes are used as architectural coatings. around 121 kilo tonnes of titanium pigment was consumed in this industry. both the quality and the category of home-made Titanium Dioxide Rutile and Titanium Dioxide Anatase can meet the demand from architectural coatings. Titanium pigment does not 77 .8% 23. coatings industry of developed countries mainly uses titanium pigment as white or lightcoloured covering pigment and achromatic pigment. toys decorated by plastic lacquer containing toxic materials will be strictly limited by EU. Titanium pigment is the basic white pigment of architectural coatings and important to maintain the ornamental property. there are still some factors that slow down the development of the coatings industry: some small enterprises with weaker competitiveness will be washed out because the price of raw material rises up and the profit level declines.7% 26. shipping paint.6% 19.1% 28. carpentry paint.1-2 Production and consumption situation of coatings in China in the past Year 2001 2002 2003 2004 2005 CAGR in 2001~2005 Output/t 181 202 242 298 383 20.6% and 19. It is estimates that the growth of coatings’ output in China in the future is slower than before. automobile paint and plastic paint also need lots of titanium pigment. the output and consumption volume of coatings in China reached 3.7% 18. Titanium pigment can be almost used in all thermoset and thermoplastic plastics. China will keep the increasing demand for coatings because of the fast development of architectural. container paint. In 2005. coatings’ output in China will increase with a CAGR of 11%.1% Growth rate -1.Despite the fact that titanium pigment is expensive than ordinary lithopone in the international market. However. At present. And the CAGR of output and consumption volume in the past five years was 20.920kt. furniture and automobile industries. Chinese coatings industry developed quickly. accounting for 18% of total consumption volume. In the future.44% 11. Besides architectural coatings.830kt and 3.7% 21. respectively.

260 kilo tonnes. Besides PE and PVC. and domestic output increased from 3. The rapid development of PE industry in the future will largely promote the consumption of titanium pigment.8% 25.7% 13.7% 12. titanium pigment for plastic is usually pre-treated on the surface by silicon or aluminum.5% 29.0% - 9.1% 16. PVC industry in China also developed in the past. China produced 5.8% 12. Table I-7.2. At the same time.6% 8.2% 15.024 20.2% 557 577 625 710 750 22. 78 . In general. which stimulates the consumption of pigment especially titanium pigment.4% - 7.2% - 20. titanium pigment is mainly used in high-class paper and thin paper. As the filler of paper.8% 5. with the average growth rate of 2. PS.1-3 Production and consumption situation of PE & PVC in China in the past Year Output (Unit: 10kt) Growth rate PE Consumption (Unit: 10kt) Growth rate Output (Unit: 10kt) Growt h rate PVC Consumption (Unit: 10kt) Growth rate 2001 2002 2003 2004 2005 CAGR in 2001~2005 308 355 411 432 503 2.500kt in 2005. Titanium pigment is usually used in polyolefin (mainly low density PE). But laminated paper needs Titanium Dioxide Rutile with superficial treatment for better light-resistant and heat resistant properties. Titanium pigment for plastic is mainly rutile type.6% 8.8% 15. titanium pigment for paper making is Titanium Dioxide Anatase without superficial treatment which can fortify the white content of paper.5% 12. ABS. In 2005.5% 13. In 2005.influence the insulation property of plastic products. other plastics will also develop rapidly in the future.030 kilo tonnes of PE and imported 5. It is estimates that the demand for PVC in China will increase with the CAGR of more than 13% and reach 13. The apparent consumption volume of PVC in 2005 was 7.0% 14. PVC.4%.450 kilo tonnes in 2010.6% 719 810 879 910 1.9kt. During the “Tenth Five-year Plan” (2001~2005). However.9% 3.5% in the coming five years and reach 9. Plastic industry of China experienced rapid development in recent years.5% 5. the consumption volume of titanium pigment for paper making was about 38.5% 3. Prior to application.800kt in 2010.000kt.500kt. It is estimated that the output of PE in China will increase with a CAGR of 13.7% - .5% 310 355 401 503 650 17. and the apparent consumption volume of PE in 2010 will reach 17.Paper making Industry Paper making industry is the third biggest end use sector of titanium pigment.096kt in 2001 to 6. the output of PE in China grew with an average growth rate of 11%. many kinds of titanium pigment are not directly applied to plastic processing but are firstly made into masterbatch in intermediate plants and then sold to plastic fabrication plants.

accounting for 5.8% of the total consumption volume. Here is the quality standard of titanium pigment for paper making Table I-7.2.1-4 Quality standard of titanium pigment for paper making
Item Content of TiO2 /% Volume mass/ kg·m Granularity /μm Refraction index Dispersion coefficient White content /% Particle figure Water-soluble substance /%
-3

Index ≧98 3.9 0.15~0.20 2.55 4.3~5.1 ≧95 Globose <0.3

Besides the major three end use sectors including coatings, plastic and paper making, titanium pigment can be also applied in many other sectors such as ink, rubber, textile, chemical fibre and cosmetics industries.
- Ink Industry

When producing ink, pigment is one of key factors that decide the quality of ink. Titanium pigment is the indispensable material to produce high-class ink. Ink containing titanium pigment does not change color, has good superficial wettability and is easy to disperse. Although functioning mechanism of titanium pigment in ink is similar to that in coatings, the volume concentration of pigment in ink is very high. For example, sometimes, the content of titanium pigment in ink reaches 55%. In this case, titanium pigment can present high luster and high masking power only when its particle size is small and even and its dispersivity is good. Generally, ink used for metal employs rutile type titanium pigment, while ink for intaglio and relief printing employs anatase type titanium pigment because it is comparatively soft which leads to more slight abrasion of roller. In the past five years, ink output in China increased with the annual growth rate higher than10%, and the consumption volume increased with annual growth rate of higher than 13.2%. To 2005, the output of ink reached 302kt. Here is the production and consumption situation of ink in China.

79

It is estimated that Chinese demand for ink in the next five years will increase with an average annual growth rate of 10%. approximately accounting for 5. 80 .9% 17. and to 2010 will reach 580kt.2% Growth rate 10. Titanium pigment is used as “flatting agent” in synthetic fibre.3% - In 2005. Nanjing Grease Chemical Plant established a production line of titanium pigment for chemical fibre with the capacity of 1.Table I-7. titanium pigment for ink amounted to 38. And then domestic organizations made remarkable progress on the aspect of the production of titanium pigment for chemical fibre. the demand for titanium pigment used as flatting agent approaches 30kt.2% Consumption/t 220.000 258.404 Factory of Ministry of Nuclear Industry also produced a small amount of titanium pigment for chemical fibre in the 1990s.1% 25. Titanium pigment for chemical fibre generally does not need superficial treatment. Technological index of titanium pigment for chemical fibre is more rigorous than that of ordinary anatase type titanium dioxide.8% 7. Since 2001. In the beginning of 1980s.000 361.000 274.000 302. For many years. China has to import titanium pigment for chemical fibre at a high price.Textile and chemical fibre industry Another important consumption field of titanium pigment (especially anatase type titanium pigment) is textile and chemical fibre industry. rutile is not soft like anatase.1 in the world.9kt.000 242. . Granule of titanium dioxide rutile may fray the spinning nozzle and diffusion knife. Although the refractive index of titanium dioxide rutile is higher than that of titanium dioxide anatase.000 246. Titanium pigment is considered as the best flatting material.8% of total consumption volume.2% Growth rate N/A 10. so textile and chemical fibre industry usually uses titanium dioxide anatase. which leads to a perfect flatting effect.8% 4. Chinese output of chemical fibre has been No.3% 11. The refractive index of titanium pigment is quite different from that of fibre.000t/a and produced AH-1 titanium pigment for chemical fibre.000 288.2.1-5 Production and consumption situation of ink in China in 2001~2005 Year 2001 2002 2003 2004 2005 CAGR in 2001~2005 Output/t 205.0% 13. No.300 10.2% 5.000 13.000 220. At present.

water-based greasepaint. Titanium pigment is used in art paints. Leather Stationers goods Titanium pigment is used in white or colour ointment for leather.2.Other end use segments of titanium pigment Table I-7. capsule. Cosmetic Titanium pigment is widely used in cosmetics because of its whiteness. etc. cream. crayon. high masking power and ultraviolet resistance. Because of its nontoxicity. 81 . pencil.. titanium pigment is used as food additive and packaging material foodstuff. nontoxicity.1-6 Other end use segments of titanium pigment End use segments Pharmacy Foodstuff Remark Titanium pigment is used as colorant in tablet.

000 256. stationery.30% 22. station and so on.10% 14. waterproof cloth and so on Pigmentation for plastic products: . such as brick. pillar. terra.000 396.100 312. Pigmentation and antirust of paint and spray paint: .Magnetic paint. antirust paint and shipping paint Pigmentation for rubber products: .1% and 20.200 430.000 350. 82 .The inner tube of a tire (such as :automobile. such as wall.1%. The apparent consumption volume of iron oxide pigment produced in China reached 490. soft and hard PVC. Table I-7.125 490. enamel and glass.70% 20. the consumption volume in the past several years increased year by year. gloves. In the whole. The annual growth rate in 2004 and 2005 were respectively 14.00% 14.2 Consumption situation of iron oxide pigment in China With many advantages.2-1 Consumption of iron oxide pigment in China in recent years Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Apparent consumption (t) 256. . bicycle). .000 278. ceramics chemicals and so on. paper making.2. blending paint.125 in 2004. . phenolic-plastic. ceiling. rubber and plastic.It is used to color and polish ceramic. baking finish.400 358.I-7.591 Growth rate of consumption (%) 8. canal. iron oxide pigment is the most common color pigment.60% 25.10% -35.It is used to make rub piece and printing ink. and so on Others: . face brick.Thermosetting plastic: such as amino-plastic. architecture and building.90% 13. hot-water bottle. and so on. Pigmentation for cement goods and building structure as follows: .Thermo plastic: such as polystyrene plastic.591 in 2005 and 430. in sudation material.10% Application fields Iron oxide pigment is the most common color pigment extensively used in caoatings and paint. man-made marble and so on.2. spray paint. ground.All kinds of building materials. plane.The surface of all kinds of building structure.

Consumption in other fields amounted to 1.000 Paper-making 22.000 168.0% PlasticOther 3.It is used to color ferric magnetism materials and feed.800 Total* 353.2-2 The application proportion of iron oxide products used in the coatings industry Industrial 11.800t.800 * These quantities do not include the storage of the year. Generally.9% In 2005.2-2 Consumption volume of iron oxide pigment in each application field (Unit: t) Year 2003 2004 2005 Coatings &paint 131. architectural materials consumed about 150.0% Architectural 37.6% c 13.000 56.000 5. The application proportion of iron oxide products used in the coatings industry is shown in the following figure.000 433.000t iron oxide pigment.3%.000 173.0% Antitarnish 32.0% Auto 5.2. coatings & paint consumed about 173. Coatings & painting and architecture are the two major application fields of iron oxide.000 14. These two fields totally amounted to about 74.0% 2.000 Other 45.000 37. and medicine.000 46.000 151.2. Figure I-7.3% Coating&Paint 39.0% Furniture 10. Table I-7..000 150. The development of coatings industry compels iron oxide pigment to grow.6% of the total. rubber and plastic and paper-making. coatings and paint.0% 83 . amounting to 39.000 58. Consumption by rubber & plastic and paper-making was respectively 13. food stuff.000t iron oxide pigment.2. it is mainly consumed in these fields including architectural materials (construction).000 Architecture 115.000 425.4% and 10.7% of the consumption.2-1 Consumption pattern of iron oxide pigment in China in 2005 Architectural material 34. Figure I-7.4% Other 1.000 Rubber & plastic 40.8% Paper Rubber&Plasti 10.9% of its total output. Actual consumption of iron oxide pigment in 2005 was 433.

Some coatings in China have already caught up the standard of that in developed countries. iron oxide pigment can be used to test that to what extent the machine is damaged with the property of magnetism. Iron oxide yellow has the light yellowish brown color。 This durable and cheap pigment absorbs ultraviolet radiation and has low water solubility. In addition. It’s estimated that the requirement will grow at a rate of 10%. Here is application situation of each kind of iron oxide pigment: Iron oxide red pigment is widely applied for coatings including water inside and outside wall coatings and paints including surface paints and basic paints such as alcohol acid. the development of the coatings industry will surely provides a lot for the iron oxide pigment. iron oxide red pigment protects the color from fading.000t/a iron oxide pigment were used in architecture industry.000t in 2004. And it can be used to pigmentize the surface of rubber products and rubber filling stuff to strengthen its endurance. water-milled stony ground and concrete products. it is also extensively used to pigmentize various color paper. Iron oxide red pigment can be used for pigmentizing building materials such as tile. Iron oxide pigment is widely applied for color cement block. mosaic brick. about 143. The quantity was increased 18. and amidogen. the output of coatings was fourfold. Application of each kind of iron oxide pigment Due to different properties and features. iron oxide pigment applied for architecture is about 35% of that applied in coatings industry. color concrete road surface. Pigmentation for fashionable architectures.800t iron oxide products was applied in coatings and building materials. more than 60. It is extensively used for matching colors in construction and building. China will be an important base for producing coatings. roads and so on is inclined to applying colorful painting instead of single gray.2% to 170. Besides. different kinds of iron oxide pigment have their own typical application. 84 .As people’s consumption concept is experiencing tremendous transformation. In 2002. When applied for pigmnetizing plastic products. There will be a great demand for iron oxide pigment from coatings in the future. Nowadays. In recent two years. This will promote the development of the iron oxide industry. During 8 years between 1997 and 2004. color wall-brick. squares.

000.200. There will be a great demand for iron oxide pigment from coatings in the future.000 5.5 11. 85 .4 18. It can avoid color-floating or seeping due to its density.324 557 459 0.000 145 4827 545.700 78 40 567. Consumption trend of iron oxide pigment in China in future The sales volume of iron oxide pigment in China in 2005 was 570. iron oxide pigment comes across a new opportunity in its growth. It’s estimated that the annual demand of iron oxide pigment in 2015 may reach 260.2-3 Production and market of the iron oxide industry in China in 2004 and 2005 Item Production capacity (t/a) Quantity of manufacturers Average capacity of each manufacturer (t/a) Output (t) Operation rate (%) Proportion of output (%) Sales volume (t) Ratio of sales to production (%) Domestic sales volume (t) Storage (t) Export volume (t) Import volume (t) Average export price (USD/t) Average import price (USD/t) Import price /export price Sales value (RMB) 2005 800.000 38.82 2. However.400 5. acid and light.7 7. It’s estimated that the requirement will grow at a rate of 10%.3 14.000.300.000 430.Iron oxide black is also very stable to alkaline.9 2004 700.000 80.4 -6.140 517 416 0. It disperses easily and has low oil absorption property.400 19.8 2.000t. there was a large quantity of storage as a result of the gap between the growth rate output and that of sales volume.648 198.000 312.700 91 238.1 41.3 -3. By contrast with 2004. with the rapid development of architecture industry.1 4.2. Therefore.000 478.200 55.2 2.3 10.000 329.500 1.422 197. Recently.000 140 714 622.000 99 227.4 38 Year on year (%) 14.171. the output and sales volume of iron oxide pigment in 2005 both were increased in a certain degree.9 51.3 5.7 10.7 540. Table I-7.4 - Apparent consumption (%) Global consumption (t) Ratio of domestic to global consumption (t) Rate of contribution to the world (%) The prospect of iron oxide pigment in China is promising as some major consumption fields such as coatings and painting develop rapidly.542.000 1.000. iron oxide black is an ideal pigment for concrete painting.8 1.

The second was coatings amounted to 6. Most iron oxide products are applied for architecture in the world. and development of industries. Nevertheless. The largest application field is magnetic materials. requirement for iron oxide pigment from architecture is the largest. Architechture (building material) is the largest application field of iron oxide pigment in the world. which consumed 84% iron oxide pigment in the 1990s.000t/a iron oxide pigment is consumed in America. plastics and rubber both amount to 5%. Coatings is the second with a proportion of 33%. transaction volume is around 15. America consumes about 68. Canada mainly applies iron oxide pigment for architecture.000t/a used for painting. Architecture consumes only a small proportion of iron oxide pigment in Japan. with 65% of its production used for concrete. consumption patterns of each country in the world are different.000-650. with In the world. Western Europe and Japan.000t/a iron oxide pigment 600.000-85.000-250. Then is the demand from coatings with the consumption volume about 150. In Austria. From the 1990s on. iron oxide is mainly consumed in America. amounting to 60% of the total consumption.000t/a. In Western Europe. Its architecture consumes most of iron oxide pigment. consumption custom.000-68. amounting to 34% of the total consumption. The global consumption in this field amounts to 53% of total iron oxide products.000-225. the rest 9% is other fields.000t/a iron oxide pigment for architecture. due to differences in economic development.000t/a in Western Europe. 86 .000t is imported. However. Similar to the situation in Europe.000t/a. The coatings industry consumes about 46. and 250.000-370.Consumption of iron oxide pigment in the international market About 1.000t/a iron oxide pigment in America. 200.000-20.000. of which 12. consumption pattern of iron oxide in Japan is opposite to that in Occident.8%. is consumed all over the world.

I-7.2.3 Consumption situation of lithopone in China As a large market of lithopone, China consumed 170,000 tonnes of lithopone in 2005, about 78% of the global consumption volume. Figure I-7.2.3-1 Consumption of lithopone in China, during 2003-2005

200,000 150,000 100,000 50,000 0 2003 2004 2005 140,000 3.7% 13.5%

16.0% 14.0% 10.0% 7.0% 149,813 170,000 8.0% 6.0% 4.0% 2.0% 0.0% Growth Rate, % 12.0%

Lithopone is applied in many fields including coatings, paint, plastic, paper, ink, printing paste and so on. Among these, coatings and paint are the major fields, and their consumption of lithopone in 2005 respectively accounted for 41.0% and 35.0% of the total. Figure I-7.2.3-2 Consumption pattern of lithopone in China, 2005

Consumption/t

other 8.0% plastic 16.0% coating 41.0%

Paint 35.0%

87

000 tonnes of chrome pigments in 2005. PC. Chrome pigments are applied in many fields. PVC.4 Consumption situation of chrome pigments in China As a large market of chrome pigments. PP. Chrome pigments are widely used in coatings. Chrome pigments are consumed in the following plastic sectors: PE. PS. such as architectural coatings.2. 88 . ink and plastic and so on. PU and so on. including coatings. China consumed 24. ABS.I-7. anticorrosive paint. and traffic paint and so on. industry coatings. about 24% of the global consumption volume. wood coatings.

2. coatings. Table 1-7.I-7.238 70.000 0 -7.6% of the national pigment consumption.000 40.0% Other 7. coatings and plastic are the major fields.9% 20.000 51.7% 2003 2004 2005 60.397 73.0% of the total organic pigments consumption respectively. ink and plastic industry were the major consumption fields.0% 0. In Chinese finish coat for auto production mainly depended on imported ones.0% Growth Rate 40.0%.0% -10. textile and stationery and so on. thus domestic consumption of DPP pigment in auto industry was limited.0% - About DPP pigment DPP pigment is mainly used for industrial paint especially finish coat and refinishing paint for auto production.2.136 tonnes of organic pigment in 2005.5-2 Consumption pattern of organic pigment in China In 2005 Plastic 10. ink. 15.0% 10. Figure 1-7.5 Consumption situation of organic pigment in China As a large market of organic pigment. China consumed 73.3% Coating 15. Among these.0% 50.7% Ink 67.136 3.8% Consumption/t 60. including ink.0% Organic pigment is applied in many fields. 2003-2005 80. about 4.5-1 Consumption of organic pigment in China. cosmetics. whose consumption of organic pigments in 2005 accounted for 67. 89 .000 20.0% 30.7% and 10.2.0% 76.

Liaoning Zhongwang Group Koemmerling (Tianjin) High Polymer Molding Co. Ltd. Beijing Meichao Finishing Material Co.. Ltd.. Shandong Chenming Paper Industry Group Shandong Huatai Group Co.30 Nippon Paint Co. Shandong Changyu Group Co.000 20..000 80..000 80. Shanxi Taiyuan Coates Lorilleux Chemicals Ltd. Shanghai Peony Printing Ink Co.3 List of major end users Table 1-7. Ltd. Ltd.000 3.000. Ltd.. Ltd.000 N/A N/A 90 .000 1..3-1 Major end users of pigment in China No.200. Ltd. Yip's Ink & Chemicals Co. Zhejiang Yongzai Chemical Industry Co..000 40. Ltd.000 600. Tianjin Toyo Ink Co.000 400.000 100. Ltd. Ltd.7 II-2.... Golden East Paper (Jiangsu) Co.27 II-2.22 II-2.I-7.000.29 II-2. Changzhou Guanghui Chemical Co.000 1.28 II-2..000 60.4 II-2.. II-2. Shanghai Coatings Co.000.1 II-2.. Hong Kong Hempel-Hai Hong (China) Ltd.5 II-2.11 II-2.000 15.19 II-2. Ltd..000 600. Ltd. Ltd.000 300.000 30..9 II-2.000 40.. Ltd.21 II-2.15 II-2..17 II-2. Ltd. Chongqing Hongqi Paints Co.. Shanghai DIC Ink Co.26 II-2.000 15.000 100.000 40. Ltd.12 II-2.000 20.000 80. Ltd..000 27.. Ltd.000 2. ShangHai YiHua Rubber Products Factory Hebei North China Rubber Factory Company coatings coatings coatings coatings coatings coatings coatings coatings coatings coatings coatings coatings coatings ink ink ink ink ink ink ink plastic profiles PVC profiles plastic profiles PVC window & door profiles paper paper paper paper rubber products rubber products Product Capacity(t/a) 250.8 II-2. Ltd. Shanghai Cosco Kansai Paint Co.14 II-2.18 II-2. Hangzhou TOKA Ink Chemical Co. Ltd.000 15.3 II-2. Dalian Shide Plastics Industry Co.. Ltd.10 II-2.16 II-2.25 II-2. Shandong Sun Paper Industry Joint Stock Co. Anhui Wuhu Conch Profiles and Science Co. GuangDong Maydos Chemical Group Hunan Xiangjiang paint Group Co..24 II-2. Shandong Lehua Group Co. Ltd. Ltd.13 II-2.6 II-2.2 II-2. Shanghai ICI Swire Paints (Shanghai) Co.000 15.23 II-2.000 40..20 II-2. Guangdong Huarun Paints Holdings Co.000 90.

accounting for about 53% of annual output.000t/a. To treat the pollution costs much and imposes heavy burden on producers. its export volume is huge. little titanium raw material is suitable for Chlorination Method. Another problem is that the technological structure of Chinese titanium pigment is unreasonable. a part of pigment enterprises have been or are going to be shut down because they did not conform to the rigorous requirement of environmental protection. in international market. the capacity of titanium pigment by Chlorination Method has occupied 60% of global capacity. Chinese pigment industry has some common problems as follows: .The markup of raw materials and energy leads to the decreasing profit of pigment industry. Specifically. For instance. the capacity of iron oxide in China was 800. 180.Most pigments are middle and low-end products. Dupont Company.000kt/a all of which adopts Chlorination Method. they depend on trading companies. although China is one of the countries that own the most abundant titanium resource. Most manufacturers can not export their organic pigments independently. Many high-class pigments still rely on importation. The cost for environmental protection is going up swiftly. This situation indicates that Chinese iron oxide excessively relies on export. Its production may cause serious environmental pollution.5 times as the export price. Besides the above. the biggest manufacturer of titanium pigment in the world. different pigment has specific problems. Like lead. In China. more than 90% of titanium ore is symbiotic mine in which the content of titanium dioxide is low and its components are complex. Market price can clearly indicate the difference between home-made and oversea pigments. but only one company adopts Chlorination Method. For instance. . In 2005. 98 percent of capacity is adopting Sulfuric Acid Method. . which reduces the foreign exchange earn through export. The majority of raw materials for pigment production are not reproducible resources such as mine resources or petroleum. For example. the import prices of pigments are usually 1. owns the capacity of 1. As to iron oxide pigment.Each pigment manufacturer feels unprecedented pressure of environmental protection. Instead. However.000 tonnes more than the output in the same year. near 20 titanium dioxide manufacturers were shut down in the past three years due to their poor measures of environmental protection. except for iron oxide. The overplus of capacity is another problem of iron oxide industry. 91 . which results in low competitive strength in the global market.I-8 Problems existing in pigment industry At present. As a matter of fact. chrome is heavy metal and harmful to human bodies.

New projects short of legal condition won’t be approved or authorized. Therefore. to strictly limit the installation construction of iron oxide production with capacity below 5. Control of production volume On one side. Some will be recombined or reformed in the near future. to control production volume from the root. and the export volume reached 329. At present. Turnover of independent situation As calculated. secondly. the government suggests these manufacturers improve their technology to meet the need of domestic demand. The State Department orders local governments strictly put the policy into effect. most private manufacturers of iron oxide in China depend on export and they have no share in domestic market. Control of production installation Early this year. China is a large country exporting iron oxide. the Committee Meeting of Chinese Coatings Industry Association concluded three agreements in 2006: Firstly. governments and related organizations took a series of measures. because the too small factories usually can not effectively treat wastes but lead to serious environmental pollution.400t.I-9 Governmental policies about pigment industry and their influence To solve effectively the problems in pigment industry. Iron oxide Agreement of Chinese Coatings Industry Association To ensure the fine development. these manufacturers will be heavily shacked once the international demand experience change. to turn over the situation of dependence on exporting. Titanium dioxide In July 2005.300t. Chinese governmental issued a regulation in which titanium pigment projects with the capacity being no larger than 3. On the other side. To survive any suffering from the international market. the import volume was 197. and are not competitive 92 .700t.500t/a will not be allowed. the state issued a policy to forbid construction of installation with capacity below 5. installations of small-scale capacity is not allowed from then on.000t/a for producing iron oxide. the third. Now that production with equipment of low capacity causes serious pollution to environment. Unqualified manufacturers will be washed out or stopped. the production volume of iron oxide pigment in China in 2005 was 622. high cost and energy waste and so on.000t/a. exported iron oxide products from China are mainly of medium and low grade.

manufacturers conduct price war. they are required by government to control the production volume and product quality. In order to survive. Insufficient supply of national resource and energy also require manufacturers pay high expenses. which results in inefficiency of the whole industry domestically. China’s development has turned to pursue sustainable development shifting from simply focusing on economic growth.globally. cost for development rises in China. Cost on environmental protection and natural resources Since the central government set up the concept of Harmonious Development. enterprises of iron oxide pigment have to burden the cost of environmental protection which was imposed on society ever before. Chinese iron oxide pigment is oversupply in domestic market. On the same time. After this transit. To realize the transfer of development mode set up by the government. Therefore. 93 .

000 1. Meanwhile. In the future. and to 2010. ink. the export volume of iron oxide. China is turning to be a global production center and crucial sales market of pigment. Compared with the international market. chrome pigment and organic pigment in the world. lithopone.I-10 Future forecast on pigment industry in the next five years I-10. Chinese market is more attractive to those large multinational pigment manufacturers who are transferring more capacity of pigment to China. However. Chinese pigment industry will keep rapid development in the future.1-1 Output of pigment in China in the coming five years 3. reaching 276kt in 2010. Along with the increment of capacity & output of Chinese pigment and the improvement of quality. paper making and rubber industries. Figure I-10.500 Output/kt 2. China has become the largest producer of iron oxide. China has the output of titanium dioxide only second to the United States. while the import volume decreased 9. Here is the future production situation of pigment in China in the future. the export of Chinese pigments will keep continuous growing. the total output will be about 2. In the coming five years. the output of inorganic pigment in China will increase with the CAGR of 10%. lithopone and chrome pigments has been much higher than their import volume. the import & export situation of titanium pigment changed in 2005: its export volume increased much.000 500 2006 2007 2008 2009 2010 Inorganic pigments Organic pigments 94 .000 2. Along with the swift development of downstream industries such as coatings.540 kilo tonnes. For a long time.500 1.1 General situation of Chinese pigment industry in the future At present. plastic. the output of organic pigment will also increase with an average growth rate of 12%. only titanium pigment has a larger import volume than its export volume.2%. export of Chinese pigment will keep mighty increment.

the demand for titanium pigment in China will reach 1.I-10.268kt. environmental protection. To 2010. Along with the development of coatings.500kt/a). paper making. and the entering of foreign capital will change the industrial situation. Future competition in Chinese titanium pigment industry will be harder. Jiangsu. On the basis of the publicized plans.200 Demand/kt 1. two ultra-large type Chlorination-Method Plants will be established. during the “Tenth Five-year Plan”. in which the capacity of 70kt/a will be involved. Hunan. At present. Figure I-10. and other industries. China will turn to be the real production center of titanium pigment in the world. Foreign enterprises are accelerating their steps of entering Chinese market.2 Future development of titanium pigment in China (1) Production scale will be enlarged gradually and the quality will be improved. similar to the capacity of the United States (currently 1. Zhejiang. Chinese demand for titanium pigment during 2005~2010 will increase with the CAGR of 11%.350kt/a. These projects (or plans) all adopt Sulfuric Acid Method and are located in Shanghai.400 1. Moreover. besides two Chlorination-Method projects with the respective capacity of 200kt/a launched by Dupont and Astron. at the same time.000 800 600 400 200 0 2006 2007 2008 2009 2010 (2) Competition in titanium pigment industry will be harder. ink. The capacity of these projects (or plans) totals 250kt/a to 300kt/a. there are other 12~14 new projects (plans) on the stage of construction. Chinese capacity of titanium pigment in the end of the “Tenth Five-year Plan” will reach 1. there are also many native projects that are newly launched. etc. there are 4~5 plants that will be shut down due to factors including region. designation or preparation. Titanium pigment industry of China will keep developing rapidly in the coming years. The two plants include production base 95 . China has turned to be one of titanium pigment markets that have the biggest development potential.2-1 Future demand for titanium pigment in China 1. Hubei and Sichuan. At the same time. the increasing speed of titanium dioxide rutile must be much faster than that of titanium dioxide anatase. Guangdong. plastic. If the above projects (or plans) can be implemented successfully.

and their price is generally higher than that produced by Sulfuric Acid Method. etc. Shandong Dongjia Group Co. which speeds the development of local titanium pigment industry. are large-scale enterprises in titanium pigment industry. Sichuan will become a burgeoning production base of titanium pigment.. and the designed capacity is 50kt/a. It is reported that there are 7~8 manufacturers (or engineering) under construction or designation in Panzhihua-Xichang Region. Sichuan Panzhihua-Xichang region is the biggest reserve region of titanium ore in China. It is believed that the target market is just China. and Shandong Jinan Yuxing Chemical Industry Co. Among these regions. After the two projects of Dupont and Astron are put into production in the future. Shandong. Ltd. Sichuan.. The two projects will lead to the unprecedented competition in Chinese titanium pigment industry. Guangxi.invested by Dupont of America in Shandong Dongying and production base invested by Astron of Australia in Liaoning Yingkou. Ltd. more than 95% of home-made titanium pigment is produced by Sulfuric Acid Method. Local government will still view titanium pigment as the basal industry to develop it. Furthermore.. (3) Geographical distribution of capacity will be clearer. However. Nanjing Titanium Dioxide Chemical Co. Ltd. Shandong will turn to be the biggest production base of titanium pigment in coastal areas. There have already been five manufacturers of titanium pigment. After the plant invested in by Dupont in Shandong Dongying is completed.. products produced by Chlorination Method occupy the most market share of high-class titanium pigment. Guangxi is the province that has the most enterprises of titanium pigment in China because there is abundant titanium resource in it and nearby region. Guangxi and Sichuan mainly benefit from the facile raw material while Shandong and Jiangsu mainly benefit from their advanced economy. Jiangsu Province will become another production base of titanium pigment in economically advanced areas. Ltd. In Jiangsu Province. even completely change the pattern of such industry. there are nine manufactures of titanium pigment including Jiangsu Taibai Group Zhenjiang Titanium Dioxide Joint-stock Co.. Total capacity of the two plants is 400kt/a.. (4) China will probably become net exporting country of titanium pigment 96 . Profiting from the good quality. it will be very difficult for home-made Sulfuric-Acid-Method titanium dioxide rutile to take the market of high-class titanium pigment. a manufacturer of Germany also plans to establish production base of titanium pigment in the Far East Region of Russia. Jiangsu will be major production regions of titanium pigment.

3-1 Future output of iron oxide pigment in China in the next five years 1.000t/a.147. Oversea famous manufacturers of iron oxide pigment are optimistic about the Chinese market. The output of iron oxide pigment in China in the past decade went up at an average annual growth rate about 14%. It is suported that the output will still increase in the next five years. Manufacturer number will be reduced and production scale will be enlarged through competition and acquisition. It can be predicted that output of iron oxide pigment in China in 2010 will increase to 1. Figure I-10. I-10. The coastal regions become the production bases of iron oxide pigment for oversea enterprises whose production capacity reaches 120. while titanium pigment imported in the mode of ordinary trade will gradually decrease. accounting for 15% of the national capacity. Changshu City and Taicang City in Jiangsu Province and Shenzhen City.3 Future development of iron oxide pigment in China (1) There is much room for iron oxide industry to develop in China in the next five yeas. manufacturers of iron oxide pigment are attaching more importance to security and environmental protection in their production in line with the strict requirement from the 97 . In addition.200 1. Fuyang City of Zhajiang Province.284t or so with the average annual growth rate of 13% from 2006 to 2010. The export volume of Chinese titanium pigment will keep increasing. both the capacity and output of titanium pigment in China will continuously increase. and the quality of product will be improved. Rockwood and Elementis of England have already established solely-funded enterprises and joint ventures in developed coastal cities in China such as Shanghai City.000 Output/kt 800 600 400 200 2006 2007 2008 2009 2010 As for its property and performance. iron oxide pigment produced in China will be improved by new research and advanced technologies. China will probably become net exporting country of titanium pigment in the future. It is certain that the top five manufacturers will own over 75% of the annual national output in the next five years. All these will bring in the advantage of economic scale. Bayer of Germany.In the future. Production of iron oxide pigment in China will be more centralized and specialized in the future.

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