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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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p
u
t
/
k
t
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
200
400
600
800
1,000
1,200
1,400
D
e
m
a
n
d
/
k
t
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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200
400
600
800
1,000
1,200
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p
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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

952 438.000 24.6kt and accounting for 48 percent of the national output.711.324 0 2. plastic.2% of total consumption.664 758.511 61.2kt. of which 1506.311 490. In 2005.6% of total output.000 2. with the capacity of 2.136 1.000 340. of which 1.436 tonnes. even reaching 40% in 2005. Central South China was the second biggest production area of pigment. In 2005. paper making and rubber industries. paper making and rubber industries. Chinese pigment industry will keep rapid development in 4 . China has to import large quantities of pigment every year.928 31. with the average annual growth rate of output being 21% in 2002~2005. because of the shortage of high-class products.885 Import (t) 227.260. which totally consumed 82.000 180. and they totally produced 1. reaching 896.4% of pigment in 2005.868 kilo tonnes of pigments in 2005. 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. Chinese pigment highly depends on overseas markets.000 40.506.000 1. Pigment production in China concentraes on East China and Central South China. respectively. ink.000 Output (t) 682. and the respective output share of the other areas is smaller than 10%. The annual export proportion of Chinese pigment was generally beyond 35%. Pigment is chiefly consumed in coatings. the top three provinces of pigment production were Jiangsu. Coatings industry was the biggest consumer of pigment.000 36. China has become one of major production countries of pigment in the world.736 197.000 150.585 1. where the output in 2005 was 691.591 170.228 73.600 120.300 tonnes are inorganic pigment and only 73.867. Nowadays.000 114.300 156. 37% of national output.000 622.425 329.005 69.631 644.000 15.260kt/a.Executive summary Chinese pigment industry develops rapidly in recent years. the apparent consumption volume of pigments in China reached 1579.215 470.433 80. East China had the largest output of pigment.364 Along with the swift development of downstream industries such as coatings. of which a majority were high-class products. Guangdong and Zhejiang. In last year.136 tonnes are organic pigment.000 800. This situation was just like the consumption structure of pigment all over the world. plastic.916 10. accounting for 91. ink.711kt were inorganic pigments.000 2.579. Current statistic shows that there are about 350 manufacturers of pigment in China.700 250. China imported 470 kilo tonnes of pigments in 2005. For instance.664 Apparent consumption(t) 752. At the same time. occupying 51.143 Export (t) 157.080.321 1.

the future. reaching 276kt in 2010. Chinese market is more attractive to those large multinational pigment manufacturers who are transferring more capacity of pigment to China.500 1. iv) The pressure of environmental protection becomes heavier.000 500 2006 2007 2008 2009 2010 Inorganic pigments Organic pigments Titanium pigment In 2001~2005. Iron oxide pigment 5 . titanium dioxide produced by Chinese enterprises amounted to 682kt with the contribution rate to global market being 14. 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 the future.500 Output/kt 2. export of Chinese pigment will also keep a mighty increment.1% over that in 2004. The output of inorganic pigment in China will increase with the CAGR of 10% in the coming five years. worse quality products and fewer specifications. Titanium pigment of China presents the following characters: i) With rapid development in the past. the import of titanium pigment uncommonly presented a decreasing trend opposite to the situation in the past years. Chinese titanium dioxide enterprises have undeveloped technologies. In 2005. Figure I Output of pigment in China in the coming five years 3. the total output will be about 2. the output of organic pigment will also increased with an average growth rate of 12%. Compared with the international market. China is turning to be a global production center and crucial sales market of pigment.000 1. Meanwhile.540 kilo tonnes. and to 2010. both production and consumption increased explosively. In 2005.000 2. ii) Production scale of enterprise keeps enlarging. Here is the future production situation of pigment in China in the future. While the export volume in 2005 increased 67. and the industry is tending towards production intensification. China’s titanium dioxide industry kept growing rapidly. iii) Compared with oversea enterprises.9%. Chinese titanium pigment is entering in the international market.

iron oxide yellow. Other pigment At present. accounting for about 40% of the national capacity.700t accounting for half of the world. and Fujian Province and Guangdong Province in the north. Apparent consumption of iron oxide in 2005 reached 490. China is the largest producer of chrome pigments in the world. Jiangsu Yixing Yuxing Pigment Factory is the largest manufacturer and the only one having the capacity above 100. accounting for 40% of global capacity.591t. In 2006. Generally. energy and son on. Southeast Asian and Middle East including Spain. Iron oxide pigment include iron oxide red. There are about 140 manufacturers producing iron oxide pigment in China. North America is the largest destination where China exported 124. Chinese iron oxide industry generally depends on export.As the top color pigment.4% from 2004.000 t/a. iron oxide red and iron oxide yellow are the key members. iron oxide pigment is mainly consumed in these fields including architectural materials (construction). the price turns to be stable.433t iron oxide pigment. of which 80kt were exported. However. and 2/3 of iron oxide pigment in the international market is from China. coatings and 6 . Jiangsu Province. Zhejiang Province and Shanghai City in Yangtze River Delta.000t/a. Among all manufacturers. more than half of the output is exported in 2005 with a growth rate of 5. lithopone industry of China runs hard and the profit level is very low. Other export destinations are Europe. the top ten have an annual production capacity of 377. The total output of these two kinds of pigment in 2005 takes about 77% of the total output of iron oxide pigment. iron oxide black and so on. iron oxide production concentrates in Shandong Province and Hebei Province in the north. China is the largest producer of iron oxide pigment in the world with a production capacity above 800. The current capacity is 40kt/a. China is the unique producing country of lithopone in the world. In the iron oxide pigment family. The price of iron oxide pigment kept going up from 2003 to the beginning of 2006 because of the cost rise of raw materials. rubber and plastic and paper-making. UK. Germany and Canada and so on. The output of lithopone will gradually decrease with an average annual growth rate of -5% in the coming five years. Coatings & paint and architectural materials are the major application fields. The output in 2005 reached 622. In 2005. Because of the rapid development of ink. 329.000t/a in China. iron oxide pigment industry in China has a history of over 40 years. In terms of regional distribution. Import and export of iron oxide pigment in China are both increased recently. Influenced by titanium pigment with better performance. coatings and paint.293t iron oxide pigment to in 2005. China produced 250 kilo tonnes of lithopone.

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

Chinese blue etc. 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. and species with good heat resistance. zinc oxide.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. iron red. cutting the cost. chrome yellow. In the 1960s some modern manufacturers with a certain scale were established to produce titanium dioxide. and the output was small. 11 . reducing waste. Traditional processes of industrially producing zinc oxide. new specifications and structures of organic pigments were developed less and less. yellow lead. Since the 1950s Chinese inorganic pigment industry developed fast. and it reached 390. lead chromate yellow. In 1982 the output of organic pigment in the world was about 250.6% of the world. The earliest organic pigment was a kind of infusibility lakes. etc. Since the 1970s. Production technology at that time lagged behind. exploring new pigment medicament form or special medicament form and so on. chrome yellow. more breeds were developed. etc. Since then. only accounting for 5. improving the yield and quality.000 tonnes in 2005. Before 1949. carbon black. flake white. light-fastness. lithopone. Egyptian blue. etc appeared during the early 30 years in the 19th century. In 2005 the output of global inorganic pigment] reached 6 million tonnes. etc was developed. inorganic pigment] developed fast in the world.000 tonnes. and the quality improved a lot. inorganic pigment in China included iron blue. researching the superficial treatment of pigment. And the first titanium dioxide plant was built in 1916. The organic pigments industry in the world turned to focus on developing new synthesis technologies. mercury sulphide. Polymer materials developed fast after 1954. red lead. which was produced by treating mordant dye extracted from plant with metal salt. The commercial processing of inorganic pigment began in 1704 with the production of iron oxide blue. were used. The output of inorganic pigment in China in 1980 reached 204. red lead. iron oxide. Lithopone was put into commercial production in 1874. Development of pigment in China The initial step of Chinese pigment industry began much later than that in the world. the output increased.200 tonnes.

I-2.500kt in 2005 from 980kt in 2002 with the average annual growth rate of 15.350 3. Its output accounted for about 40% of the world in 2005.470 10. among which lithopone possessed the largest share. inorganic pigments industry in China keeps growing at a high speed.030 1.980 3. The output in 2005 was up to 1.2%.950 1.1%.600 7.700kt from 950kt in 2002 with the average annual growth rate of 21. and China is a large producer of organic pigment in the world today. pigment could be classified into natural pigment and synthetic one. 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.Since the 1900s inorganic pigment in China developed rapidly and the national output reached 742. I-2 Classification of pigment in China There are many approaches to classify pigment: According to chemical component. and only a few are made from biologic products.200 tonnes in 1995.180 7. The apparent consumption reached 1. Synthetic pigment is synthesized through chemical reaction.010 74. while the rate in 1982 was only 1. Most kinds of natural pigment are made from mineral.1 Inorganic pigment According to chemical component.220 In recent years. Since the 1980s organic pigment also developed fast in China. pigment could be classified into inorganic pigment and organic one. inorganic pigment can be classified into the following categories: Titanium pigment Iron pigment Chrome pigment Lead pigment Zinc pigment Metal pigment Others 12 .300 Yellow lead Red lead Chrome pigments Other inorganic pigments Silver powder Total Species Output 4.360 980 12.4%. According to its processes.

13 . organic pigment can be classified into the following categories: Azo pigment Phthalocyanine pigment Ketone containing condensed rings Others I-2. 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. iron oxide. other inorganic pigment. In this report CCM will introduce pigment industry in China by classifying sections of titanium dioxide. organic pigment etc. and lithopone.According to chemical species.3 Classification in this report CCM takes on a simple classification method.2 Organic pigment According to chemical structure. 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. 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.

In 2005.6kt). The order was basically the same to that in 2004. Hebei.1-1 Geographical distribution of pigment output in China in 2005 Northeast 0.868kt (including 1. reaching 896. In 2005.2kt.1% North China 9.0% Southwest 5. At present.080kt/a are for inorganic pigment.1-1 and Figure I-3. Statistics showed that the total output of pigment in China in 2005 was 1.1-1. Zhejiang (233. As for organic pigment the current annual output of China accounts for about 40 percent of global output. The geographical distribution of pigment output and the order of province or city in 2005 are shown in the Figure I-3. Demand and supply situation of pigment in China in 2005 is shown in Table I-3.0% South central China 37.711 kilo tonnes of inorganic pigment and 157 kilo tonnes of organic pigment) with a year-on-year increment of 18. Figure I-3. China is the unique producer of lithopone. Shandong.1 Summary of production As one of the main countries producing and consuming pigment especially inorganic one. The capacity of organic pigment is only 180kt/a.I-3 Current production situation of pigment in China I-3.2% Northwest 0. Each output of pigment in Northeast and Northwest was less than 10kt. Guangxi. Central South China was the second with the output in 2005 of 691. accounting for 92 percent of total pigment capacity. Guangdong (244. there are over 370 pigment manufacturers in China with the total capacity of 2.0% 14 .6kt and accounting for 48 percent of the national output. the top three provinces of pigment production were Jiangsu (398.2%. Shanghai.260kt/a.7kt). of which 2.1-2. East China had the largest output. accounting for 37% of national output. Chongqing and Henan. The following production bases were orderly North China and Southwest China. and the following provinces were Hunan.5kt). being a very small proportion of the countrywide output.7% East China 48. The pigment production in China focuses on East China and Central South China.

7 398.7 79.711 439 644 1.8% 41.1% 6.2% 70.1 56.482 18.868 470 759 1.6% 42.5% 215.1% 15 .2% 113.580 440 538 1.5% 1.8% 118.506 Organic pigments in 2005 157 31 115 73 home-made products Market share of imported products Output/consumption 29.8% 57.3% 70.0 132.7% 106.579 1.Figure I-3.3% 29.5 141.4 108.5 244.2% 6.6 400 450 Output/kt Table I-3.8 206.5% 1.6% 11.1-1 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 70.1-2 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 56.8 233.0% 29.

5 24 100 24. and the apparent consumption was 1506.000 369 N/A 170 250 68.0% Lithopone Iron oxide 800 140 5.4% 567.080kt/a and an average capacity of 8. the most important category is white covering type pigment in which titanium dioxide takes the key position.6% 247.217 1.433 517 0.2-1.300 tonnes.592 84% 93% N/A N/A 427.200 40.286 250 74% 14.4% Total in 2004 1.Historical development of titanium dioxide industry Among inorganic pigment.500 37 93% 2.4 752 4. The operating rate of titanium dioxide industry was 82.4% and lithopone 14.9% 100% 51.324 416 329.2 Introduction to major pigments in China Inorganic pigment At present.425 1. there are about 250 active manufacturers of inorganic pigment in China.5 99% 0 N/A 80.835 157. Among inorganic pigment. 644kt. The output of inorganic pigment in 2005 was 1.9% 37% 25.1% of the total output of inorganic pigment.321 1.2.589 16.1% 36.736 1. The production and sales situation of major inorganic pigment in China in 2005 was listed in Table I-3.997 21% I-3.714 623 78% 36. iron oxide and lithopone are the major categories and their proportions of output in 2005 were titanium dioxide 39. respectively.369 N/A N/A 1.338 N/A N/A 1.82 491 1. In 2005.3% in last year.525 1. titanium dioxide.9% N/A N/A 227.9% Chrome series 40 16 2.638 251 6.2-1 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 14.096 1.6%.0% Total in 2005 1.139 23.361 83% 94. Table I-3.976 N/A 582.9%.500 682 91% 39.3kt.320t/a.648 N/A 499. accounting for 91.6 99% 2. iron oxide 36.9% 22% 750 60 12. At the same time.389 98% 452. Chrome series occupied 2.711.6% of gross output of pigment in China. increasing by 7% over that in 2004.916 3.0 91% 197.1 Titanium dioxide . the import and export volume of inorganic pigment was 439kt. with the total capacity of 2.261 5. 16 .437 6.I-3.4% 340 14 24.7% 1.890 230 8.511 2.226 15.

During 1962~1963. the former No. Guangzhou. Spain. The top six producers of titanium dioxide in the world are all multinational corporations. 1. It has the capacity of more than 3.4 Huntsman of the United States: The corporation has eight plants which are located in USA. Furthermore. it laid a foundation for the production of Titanium Dioxide Anatase by Sulfuric Acid Method in China. five of them are in USA. China started to import oversea technologies into titanium dioxide production. Since the late 1980s. The total capacity is 720kt/a. Canada. Belgium.375kt/a in West Europe. Kronos has six plants with the total capacity of 430kt/a. England. The plants are located in USA.700kt/a. other manufacturers in the world are regional producers of titanium dioxide. Liaoyang.3 Ken-mcgee of the United States: The corporation has six plants which are located in USA.300kt/a. of which 1. Netherlands. respectively. Australia.620kt/a is in North America.1 Dupont of the United States: The corporation has five plants which are located in USA. Singapore and Taiwan of China. Belgium. The total capacity is 220kt/a. Here is the brief introduction of them: No. 239kt/a in East Europe a. and the products were mainly used in porcelain enamel and electric welding rod. The total capacity is 600kt/a. who produces titanium dioxide. Chinese organizations did not research the production technology of titanium dioxide until 1954. and established pilot equipment in chemical plants of Shanghai and Tianjin. England. the global capacity of titanium dioxide is about 4. Mexico and Taiwan of China. In China Titanium dioxide industry of China owns a short history. No. For example. Italy. South Africa and Malaysia.. France and Brazil. Ltd. Germany and Norway. 135kt/a in Africa and the Middle East.6 ISK of Japan: The corporation has four plants which are located in Japan. etc.) established a Sulfuric-Acid-Method titanium 17 .2 Millennium of the United States: The corporation has eight plants which are located in USA. No. 829kt/a in the Asia-Pacific. Australia and Saudi Arabia. Jinan. No.5 NL (National Lead) of the United States: It is Kronos Corporation. Wuxi. No. 352kt/a in other regions. moreover.In the world At present. At that time. Germany.404 Factory of Ministry of Nuclear Industry (current CNNC Huayuan Titanium Dioxide Co. some small titanium dioxide factories were established in Shanghai. one of NL’s subsidiaries in Germany. Tianjin Chemical Academy scaled up its experiment about the preparation of Titanium Dioxide Anatase. all titanium dioxide were not pigment grade products. In general. Obviously. France. the United States is the largest producer of titanium dioxide in the world. The total capacity reaches 1000kt/a. and 70kt/a in South America. Tianjin. The total capacity is 576kt/a. No. The achievement of Tianjin Chemical Academy passed the authentication of State Ministry of Chemical Industry. In the 1950s.

. production and consumption explosively increased. (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. 682kt. During the Ninth Five-year Plan (1996~2000).pigment factory with the capacity of 15kt/a in 1993 by purchasing technologies of former Jugoslavia and Czech Republic. China has owned the scale of titanium dioxide industry that exceeded Japan and become the second biggest producer. Except for Pan Gang Group Jinzhou Titanium Industry Co. titanium dioxide industry of China developed rapidly.9%. other old Sulfuric-Acid-Method factories also imported software and equipment for technical reform. The former Chongqing Yugang Titanium Dioxide Co. As a kind of important inorganic pigment.Characters of Chinese titanium dioxide industry i) With rapid development in the past. respectively with the average operating rate being 91%. titanium dioxide produced by Chinese enterprises amounted to 682kt with the contribution rate to global market being 14. In 2006..5%. The specification structure of titanium dioxide in 2005 was as follows: Table I-3. .. 18 . there are about 60 manufacturers of titanium dioxide in China.. In 2001~2005. In 2005. Since 2001. titanium dioxide occupied half of the consumption of inorganic pigment in China. driven by domestic demand and the increment of export. titanium dioxide industry of China presents a prosperous situation both production and marketing thrive. the CAGR of output and apparent consumption was 30. To 2005. Here is the supply and demand situation of titanium dioxide in China in the past. Ltd. 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.2. the import volume also increased much because of the fast development of its end use sectors. At the same time. Ltd. 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”.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.4% and 23. of which 12 ones are able to produce Titanium Dioxide Rutile. by which both quality and production level were improved remarkably. all other manufacturers adopt Sulfuric Acid Method to produce titanium dioxide. merely next to the United States. the capacity and output of titanium dioxide was 750kt/a.

083 53.588 752. the number of Chinese titanium dioxide manufacturers decreased to about 60. Sulfuric Acid Method was gradually displaced by Chlorination Method which had many advantages including fewer impurities.000 293. it was only Sulfuric Acid Method that was used to produce titanium dioxide.450 82.500 162. At the original stage of the global titanium dioxide industry.183 157.889 23.4% Import/t 54.750 tonnes which accounted for 46% of countrywide output of titanium dioxide. Chinese titanium dioxide enterprises have undeveloped technologies.736 10.595 499.518 704.5% ii) Enterprise production scale keeps enlarging. According to statistics in 1996.951 228.015 94.329 451.300 111. 5 manufacturers with the respective output being over 30kt. the output of the top ten manufacturers totaled 313.960 379. In 2005. iii) Compared with oversea enterprises. lower quality products and fewer specifications. The above data shows that titanium dioxide industry of China is tending towards production intensification.000 354.535 68.1-2 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 77.000 17.450 163.328 257.5% which was several times as the growth rate of global titanium dioxide output.622 569.Table I-3. Due to the heavy pressure from environmental protection.833 91.425 29.4% 14. and 1 manufacturer with the output being over 40kt.000 420.2.771 227. as a result. furthermore. some enterprises were shut down.800 20.789 79.400 121.8% 30.8% 27. its output in 2005 reached 682kt with a year-on-year increment of 24. there were 27 manufacturers with respective output over 10kt.4% Export/t 15.130 187.477 31.311 13. On the contrary.932 153. the capacity of Chlorination Method exceeded that of Sulfuric Acid Method.244 179.329 79.6% 23. narrow granularity distribution and high white content.533 250. the former accounted for 55% of global capacity of titanium dioxide.224 22.000 191.603 55. As a result. In 2005.806 42.068 55. Sulfuric Acid Method had many disadvantages such as seroius waste-generation and low utilization ratio of resources.134 109.800 101.000 380.7% Apparent consumption/t 116. 10 manufacturers with the respective output being over 20kt.000 682.259 152.028 141. and the industry trends towards production intensification. the demand for Titanium Dioxide Rutile from consumers turned larger and larger.812 209.000 548. while the latter only took 19 .

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

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

.258 14.402 8.579 0 0 0 10. Ltd Total 6.449 12.610kt/a.705 0 N/A 14.500kt/a to 2.643 21.633 37..478 22 .2% 44.6% 2.6% 5. Nanjing Titanium Dioxide Chemical Co.723 17.950 451.Manufacturers of titanium dioxide Table I-3.613 18. Ltd.3% 2. At present. Anhui Tongling Annada Titanium Dioxide Co.3% to 57. Ltd..239 28. Sichuan LOMON Corporation Jiangsu Taibai Group Zhenjiang Titanium Dioxide Co.. Ltd.449 17.143 0 4..1% 3.5% 2.. which seriously affects the enthusiasm of titanium pigment manufacturers who employ titanium-rich slag as raw material.862 38.. Hunan Zhuzhou Chemical Industry Group Co. .9% 1. Pan Gang Group Chongqing Titanium Industry Co. CNNC Hua Yuan Titanium Dioxide Co. Sulfuric Acid Method is not permitted to employ ilmenite as the raw material. Ltd.016 22.873 17.884 38.915 0 3.963 37. In foreign countries.7% 5. Guangxi Cangwu Shunfeng Titanium Dioxide Co...296 36.902 23. Ltd. Ltd. Guangxi Dahua Chemical Plant Pan Gang Group Jinzhou Titanium Industry Co. From 1990 to 2000. of titanium-rich slag be also confirmed.249 15. 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. Therefore. Ltd. Ltd.7% 5.0% 2.2% 3.615 12.7% 2.390 N/A 0 N/A N/A 187. 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..976 23.566 2...615 N/A N/A 218. In such report.239 17.643 21.5% 4. Ltd. China National Coatings Industry Association submitted the related report in June 2006 to State Tariff Committee. Yunnan Dahutong Industry&Trading Co.446 15. Henan Billions Chemicals Co.741 15. Ltd. Ltd.411 37..3% 3.950 0 8.6% 66. the imported titanium-rich slag with lots of advantages is imposed 4.6% 5.249 11. However. Shandong Wudi Haixing Coal Chemical Industry Co. Shandong Jinan Yuxing Chemical Industry Co.5% tariff because there is no special importing tariff number for it in China.3% 2..reduce 40% of acid. Hunan Yongli Chemical Incorporated Co.1-3 List of major titanium dioxide producers and their production situation in 2005 (unit:t) No.. the association desired that the tariff of titanium-rich slag be exempted and importing tariff No.660 20.2.206 18. the global capacity of Chlorination-Method titanium pigment increased from 1.5%~6. Ltd. Guangxi Baihe Chemical Co. Ltd. Hunan Jintian Fertilizers and Chemical Engineering Co. Guangxi Pinggui PGMA Co.402 20.2% 2.702 24.390 15.633 31.760 0 3. and its proportion in global output of titanium pigment went up from 45.4% 3. Ltd.. The rapid development of Chlorination-Method titanium pigment leads to enormous demand for titanium-rich slag.016 22. 20% of electricity and 30% of water and basically avoid ferrous sulfate (major byproduct when ilmenite is used as raw material). Ltd. the output of Chlorination-Method titanium pigment accounts for over 60% of global titanium pigment..124 38. Ltd.722 10.1% 1.6%.

23 .26% .14% -7.000t since 2005.2. Russia. The second class includes these: Canada.000 713. Mexico and the South Africa and so on. It has been profoundly promoted by the Reformation and Openness and the Ninth Five-year Plan. Germany. Regarding region distribution.Historical development of iron oxide industry Iron oxide industry in China began in the 1960s. UK. The annual output of iron oxide in China in 2005 reached 622.700t. iron oxide production mainly concentrates in Europe and America. America.58% 18.2 Iron oxide pigment .000 800. Besides China.I-3.2.2-1 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. The first class includes these countries: China.48% 14.000t. Nowadays it has already well developed after 40 years’ growth.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.83% 13. There are three classes of country in terms of production capacity of iron oxide pigment in the world.260. Japan and India. Extreme monopolization is the apparent feature in oversea production of synthesized iron oxide. And the detail is shown in the following figures.000 Output (t) 256. France.000 416.000 545. Japan is the second major producer in Asia. Spain.97% 10.000 278. while the global output in 2005 was about 1.000 460. Iron oxide pigment ranks the second in both production and sales volume in the pigment family. the iron oxide industry in the world is leaded by three giant enterprises.000 350. The production capacity in China exceeds 800.90% 13. and its output amounts to half of the world. The production proportion of these two kinds is about 1:3.000 396.000 783. China is the largest producer of iron oxide pigment all over the world.000 622.000 365.59% 25. natural iron oxide pigment and synthesized one.700 Growth rate of output (%) 8. Table I-3. Since the 1990s.

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

amounting to 15%. Jiangsu Province is the second where the Chinese largest manufacturer is located.000 19.000 41.000t/a amounting to about 3% of the total.000 10. Zhejiang Province and Shanghai City in Yangtze River Delta. Jiangsu Province and Shanghai City. Typically.000 3.and Central China.000t/a in 2005.000 Production situation of iron oxide pigment series in China i) Production capacity As confirmed.000 104.000 10.. of which iron oxide red is 455. iron oxide yellow is 200.000 2. The total production capacity of iron oxide in coastal provinces and areas in 2005 reached about 600. Ltd.000t/a.000 33. The top three regions with the largest iron oxide production capacity were Zhejiang Province. Production capacities of iron oxide series from 2002 to 2005 is as follows: 25 .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. Ltd.) are located in Zhejiang Province. Table I-3.000 36.000 38.000 3. Jiangsu Province. Three of the top ten manufacturers (Zhejiang Shenghua Group Deqing Huayuan Pigment Co.000t.000 23. The rest are mica iron oxide.compound iron green. and Fujian Province and Guangdong Province in the north.000 Province/City Xiamen Guangxi Jilin Guangdong Shanxi Sichuan Jiangxi Yunnan Beijing Harbin Ningxia Xinjiang Capacity (t) 11. and iron oxide black is 120. iron oxide production distributes in Shandong Province and Hebei Province in the north. Jiangsu Province. the center of iron oxide production in China began to move to the coastal areas.000 2.000 2.000 153.2.000 8. Centre China and Central South China.. Most large-scale manufacturers of iron oxide pigment are located in Zhejiang Province. the total production capacity of iron oxide series is currently 800.000 11.000 4. Zhejiang Province ranks the first with the production capacity about 203.000 43. and their total capacity in 2005 amounted to nearly 58% of the national capacity. amounting to 57% of the total capacity.000t/a.000 2.000t/a. Zhejiang Deqing Ferricoxide Pigment Factory& Zhejiang Haining Xiaoxiang Chemical Co. From the middle 1990s on.000t/a. transparent iron oxide and reprography magnetic particle and so on with the capacity of 24.000 7. Shanghai City. amounting to 25%.000 32. amounting to 75% of the national capacity.

000 16.000 2.000 1. In addition.000 2003 393.000 14.000 2005 430.000 2.000 4.000 200. Transparent iron oxide and iron oxide red also grow quickly at a speed higher than the average growth rate.000 1.000 2.000 1.000 800.000 20. On the other hand.000 25. The output in recent years increases rapidly with an average annual growth rate of 14.000 120.000 100.000 15.000 170.000 713. The following table shows the situation of output of iron oxide pigment in the past several years.000 2004 420.000 193. was increased by 14.000 20. ii) Output Output of iron oxide pigment in China in 2005 reached 622.000 1. the process to produce iron oxide red with mixed acid method becomes more and more popular nowadays.000 5.000 5.Table I-3.000 1.000 15.000 26.000 600.000 20.000 58. 26 .000 200.700t which.000 The average capacity growth rate of iron oxide pigment in recent years is about 10%.2. Capacities of iron oxide black and magnetic particle grow at the fastest speed in iron oxide series with the rate of 26%.000 783.000 5. It is iron oxide black that has the largest growth rate in production volume in iron oxide industry.000 15.000 60. the capacities of iron oxide red with sulphuric acid method and iron oxide red with sulphuric acid method decline.000 10. compared to that of 2004. which makes the capacity of iron oxide red with mixed acid method amount to about 95% the total capacity.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 12.26%.4%.

000 21.700 19.Table I-3.6 38. quality.000 460.000t/a in China.000 78.000t/a to 100. Here are the top ten manufacturers in China. the top ten have annual iron oxide capacity of 377.000t/a.500 Annual growth (%) 12. instrument detection and transport condition to catch up the developing pace in developed countries.000 210. 27 .600 2003 195. among which iron oxide red.2.000 2005 243.000 236.000 545. and export volume increases yearly.000t/a in 2006. amounting to about 40% of the national capacity. The production structure of specific iron oxide pigment is shown as follows: Figure I-3. 38% and 20%. Key manufacturers have been improving their products’ structure.400 8. These three series of iron oxide pigment totally took a great proportion which is almost 97%. Among all manufacturers.2.000t/a.000 180. They own comparatively advanced technologies and capability of researching and innovation to produce high grade iron oxide pigment up to the world class.200 622.000 2004 205.000 100.4 2002 170. Jiangsu Yixing Yuxing Pigment Factory is the largest manufacturer of iron oxide pigment in China with the production capacity of 100.000 12.2-4 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. There are stable export channels in China. Production scale of these top ten ranges from 10.000 416.000 122.2-3 Production structure of iron oxide in China in 2005 Other Iron black 20% 3% Iron red 39% Iron yellow 38% .Introduction to manufacturers of iron oxide There are about 140 manufacturers producing iron oxide in China with the total capacity of around 800.4 166. iron oxide yellow and iron oxide black respectively amount to 39%.000 30.000 7.6 The average operating rate of the industry in 2005 was 78%.4 14. and it is the only one having the capacity above 100.000 t/a.

Consequently. Jiangsu Changshu Ferroxide Factory Zhejiang Deqing Ferricoxide Pigment Factory Shenzhen Elementis Pigment & Chemical Co. 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. production of iron oxide in China is too scattered to have unified management.635 30.650 1.850 N/A 1.000t/a. 28 .257 22. Shanghai Yipin Pigments Co..000 N/A 27. Ltd Total Entering the 20th century..080 3.000 20.2-5 Top ten manufacturers in China in 2006 Launch No. This is the bottle-neck of iron oxide industry in China confronts: there are too much manufacturers producing iron oxide in a small scale.394 2.036 N/A N/A Output in 2005/t 62. Ltd.019 N/A 11.000 92. 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 354. Further more.These manufacturers do not have enough capital to enlarge their production or to improve their technology.000 Zhejiang Haining Xiaoxiang Chemical Co.000 20..200 100. they are not willing to spend adequate effort on environmental protection during their iron oxide production.. Bayer Shanghai Pigments Co.222 38.154 N/A N/A 11. Private manufacturers become the leader of iron oxide production.297 35. 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. iron oxide industry in China has experienced transformation in manufacturer structure.000 40.357 N/A N/A 1.Table I-3.000 15.. Ltd. there is much room for non-state-owned enterprises in this industry.2. Hunan Three-ring Pigments Co. Since that iron oxide industry does not have economic assistance from government any more after China came into the age of market economy.616 211. Apart from the top ten manufacturers. Production in small-scale manufacturers can not catch up with the pace of the development of the world’s iron oxide industry. Ltd. the rest one hundred and thirty all have the capacity below 10. and many small-scale producers come forth..000 40. Ltd.

2. Since titanium oxide has the better performance than lithopone. Xiangtan Niutou.Historical development of lithopone industry Lithopone first appeared in France in 1850.000t/a accounting for 18. Hengyang Meilun. and their total output accounts for about 67% of the nation. Guangxi Province and Guangdong Province. when it was widely applied in coatings industry. It has properties of low oil absorption. There are two lithopone producers in Guangxi Province with the total capacity of 70. low Mohs hardness. . good whiteness and masking power.000t/a. and they are Liuzhou Zinc and Guangxi Yuanjiang. The total output of lithopone in China was 250. which was the end of lithopone production in advanced countries. and barium sulfate. 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.5%. Xiangtan Hongyan and Hunan Linxiang. In 1996 Germany Sachtleben stopped domestically producing lithopone. . zinc oxide. 29 . Guangzhou Huali-sachtleben is the top producer in China with the capacity of 62. After the 1970s lithopone almost disappeared in the coatings industry in developed countries.I-3. And it is a mixture of zinc sulfide.Current production situation of lithopone Currently China is the only producer of lithopone in the world with the capacity of 340.000t/a. They are Changsha Fengchao. Major regions producing lithopone include Hunan Province.000 tonnes in 2005 and the operating rate was only 73.000t/a in 2005.3 Lithopone Lithopone is a kind of white pigment. There are 14 active manufacturers of lithopone in China in 2006.2% of the total capacity of lithopone in China.

140 16.560 2003 59. Ltd.138 28. Ltd.000 30.616 23.218 2005 250.389 16.2.424 10. Ltd.000 2005 61. Ltd.000 16. Hengyang Meilun Pigmental Chemical Co. Liuzhou Zinc Products Group Hebei Yuhuan Industry Co. 62. Shanghai Jinghua Chemical Co.915 33..000 30. ltd. Ltd.Manufacturers of lithopone Table I-3..000 20.302 2004 60. Guangxi Wuzhou Yuanjiang Lithopone Co.604 9..000 4..000 23.330 13.000 10. Ltd. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Producer (t/a) Guangdong Guangzhou Huali-sachtleben Chemical Co.000 15..000 20.410 Output(t) 30 . Shandong Qingdao Baiyu Chemical Industry Co.000 25.Table I-3. Ltd.782 5.2. Hebei Yongming Lithopone Factory Hunan Linxiang Chemical Plant Yunnan Malong Wanqi Chemicals Co.000 20. Ltd. Hunan Xiangtan Hongyan Chemical Co.937 22.097 21.000 2004 235.600 16.460 16.766 15.362 18. Hunan Xiangtan Niutou Chemicals Co. Ltd.000 20. Hunan Changsha Fengchao Pigment Chemical Co..708 19.000 40.3-1 Output of lithopone in the recent three years Year Output/t 2003 226.318 15.103 20.201 5.000 20... Hebei Xuri Industry Co.008 12.3-2 Lithopone manufacturers in China Capacity No.000 .. Ltd.620 23.568 20...

068 tonnes in 2005 accounting for 16.. Ltd.000t/a accounting for about 40% of the total global capacity.2.342 Operation rate 91.4-2 Specifications of chrome pigments in China in 2005 Product Chrome yellow Lemon chrome yellow Molybdate red Zinc yellow Other Total Output/t 18.7% Molybdate red 10.4-1 Output of chrome pigment in the recent three years Year 2005 2004 2003 Capacity(t/a) 40.000 Output/t 36.9% Table I-3.2.697 1.4 Chrome pigment China is the largest producing nation of chrome pigment in the world with the capacity of 40.2.6% Lemon chrome yellow 20. was the top producer of chrome pigment with the output of 6.6% of the total output in China.612 3.600 32. 31 .I-3.8% There are 16 active producers of chrome pigment in China in 2006.348 5.981 30.1% Chrome yellow 49. Table I-3.4-1 Product structure of chrome pigment in China in 2005 Other 15.8% Zinc yellow 3.600 Figure I-3.5% 75.5% 82.2. Jiangsu Shuangle Chemical Pigment Co.790 36.000 40.000 40.153 7.

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

Lithol Red. Pigment red 53:1) was developed. organic pigment has better performances as follows: Vivid color light High color intensity Good transparency Good chemical stability Various chromatograms Many varieties Less poison .5 Organic pigment Production of organic pigment mainly centralized in North America and West Europe. 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. 33 . was explored and sold as sodium salt.2.0% Other countries 13. Figure I-3.0% Japan 14. in Switzerland developed yellow and red azo pigment with good thermal stability and non-migratory. In 1910 Pigment Hansa yellow was put into the market.I-3.. In 1903 Lake Red C (C. In 1911 Pigment yellow 12 (Benzidine yellow) was developed.Historical development of organic pigment In 1899 the first organic pigment. About 67% of organic pigment in the world were consumed in Europe and America.2.I.0% North America 33.5-1 Distribution of high-grade organic pigment in the world in 2004 South America 7.0% Europe 33. Ltd. where the capacity respectively accounted for 29% and 19% of the world. In 1954 Ciba-Geigy Co.0% Comparison between organic pigment and inorganic pigment Compared to inorganic pigment.

. and BASF Co.9% of the world. Many small enterprises stopped production or ran at half capacity. However..Current production situation of organic pigment China is the largest producer of organic pigment in the world with the output of 156. In the 1960s Hoechst Co. in Germany developed pigment benzimidazolone yellow.585 tonnes in 2005. Ltd.. Phthalocyanine and diaminodiphenyl are the major specifications of organic pigment in China. the sales value in China only accounted for 20% of the global sales value in 2005.. Chinese producers of organic pigment can produce about 250 specifications of organic pigment.. In the 1980s Ciba Co. . in USA developed pigment quinacridine red and orange. and some new organic pigment for plastic and high-glade coatings are being developed.In 1955 DuPont Co. Ltd. Ltd. 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. developed DPP red and orange. among which about 120 are produced routinely. 34 . In the 1970s isoindolinone pigment was developed by Ciba-Geigy Co. accounting for above 60% of the total output in China. Ltd. orange and red. accounting for 39. Ltd. Currently Chinese producers attach more importance to plastic and high-grade coatings.

Manufacturers of organic pigment There are above 100 producers of organic pigment in China and they are mainly located in Zhejiang Province.. Shanghai Silian Industrial Co.I.6% of the nation’s. in 2005 reached 10. and their total output was 97. Tianjin City.992 tonnes accounting for 62. Hebei Meilida Pigment Industry Co..... Zhejiang Hangzhou Baihe Chemical Holding Group. 35 .. Ltd.370 tonnes in 2005 accounting for 16..1% 13..5-1 Output of organic pigment in the recent three years Year 2005 2004 2003 2002 Capacity (t/a) 180. Guangdong Zhuhai Toyo Ink Co. was the largest producer of organic pigment in China with the output of 25. Hebei Jiehong Pigment Chemicals Co. Ltd. There is no production of C.000 96. Pigment red 254 is applied . There are two reasons as follows: There is no production of 4-Cyano-Biphenyl. Shanghai Aster Printing Pigments (China) Co. Pigment red 254. Ltd. Ltd whose output together with that of BASF Dyestuff Chemical Co. In the middle of 2005 BASF Dyestuff Chemical Co.2% of the total output of organic pigment in China.. Pigment red 264 in China though its price is high in the international market. Ltd. Jiangsu Province...2. and Zhejiang Baoyuan Chemical Co...551 127.4-c) pyrrole pigment (DPP) in China with the specification of C. Jiangsu Shuangle Chemical Pigment Co.. Shandong Province and so on.. Shanghai City. Ltd. In 2005 the top 10 producers of organic pigment were Zhejiang Changzhou North American Pigment and Chemicals Co..585 143..I.0% At the end of 2005 there were 5 producers of Diketopyrrolo (3.000 160. Clariant (Tianjin) Ltd.000 180. one of its primary raw materials..0% 20. in China.I.957 tonnes.000 120.212 Growth rate 9. Ltd. Ltd.Table I-3. was officially acquired by CVC CapitalPartners of England to establish Shanghai Aster Printing Pigments (China) Co. Hebei Province. The yield is low if the same technology with that of C. Ltd.0% 32. Zhejiang Changzhou North American Pigment and Chemicals Co.000 Output (t) 156. Ltd.. Ltd. The total capacity of the five ones was less than 500 t/a. and most of their products were exported overseas. Ltd...

Total 25.478 12.282 3..177 90. Jiangsu Shuangle Chemical Pigment Co. Ltd.035 97.684 10...370 14.655 13.942 6.251 4. Shanghai Silian Industrial Co.035 3.600 12.Table I-3. Clariant (Tianjin) Ltd.576 4.749 36 .198 5..097 13. Ltd.941 2. Ltd. Shanghai Aster Printing Pigments (China) Co.167 4.. Ltd.782 8.410 5. Hebei Jiehong Pigment Chemicals Co..657 5. Zhejiang Baoyuan Chemical Co.383 6. Hebei Meilida Pigment Industry Co.992 2004 21.5-2 Top 10 active producers of organic pigment in China Output (t) No. Guangdong Zhuhai Toyo Ink Co.2.. Ltd.875 2003 17.862 5.733 4.994 4. Zhejiang Hangzhou Baihe Chemical Holding Group.788 4. Ltd. Ltd..873 68.033 13.059 10.957 9.248 3. Ltd.879 5. 1 2 3 4 5 6 7 8 9 10 Producer 2005 Zhejiang Changzhou North American Pigment and Chemicals Co.

This manufacturer produced 94. 60 manufacturers produced titanium dioxide. whose actual output in 2005 was 62.0% of the national output of iron oxide pigment.370 tonnes in 2005 accounting for 16. 16 for chrome pigments.6% of the total output of chrome pigment in China.1% of the national pigment output.222 tonnes accounting for 10.3% of the total output of lithopone in China. 14 for lithopone.068 tonnes in 2005 accounting for 16. which produced 61. 140 ones specialized in iron oxide. The largest in iron oxide industry Yixing Yuxing is the top producer of iron oxide pigment in China. and the rest 100 ones produced organic pigment. The largest in organic pigment industry Changzhou North America is the top producer of organic pigment in China with the output of 25. The largest pigment manufacturer in China Jiangsu Tianpeng is the top one pigment manufacturer in China with lead salt series products. The largest in chrome pigment industry Jiangsu Shuangle is the top producer of chrome pigment in China with the output of 6. Among these.3 List of pigment manufacturers in China There were all together about 350 pigment manufacturers in China in 2005.915 tonnes of lithopone in 2005 accounting for 24. The largest in lithopone industry Guangzhou Huali-sachtleben is the largest producers of lithopone in China.2% of the total output of organic pigment in China. 37 .605 tonnes of pigment in 2005 accounting for 5.I-3.

029 N/A 19. Henan Billions Chemicals Co.. Ltd.140 24.782 21. Shandong Jinan Yuxing Chemical Industry Co.249 16.. Ltd.054 N/A 14. ltd.880 15.902 23..460 30.635 38.020 5..016 22. Ltd.915 2004 104. Guangdong Sanshui T&H Glaze Co.187 22.708 19.703 59.000 N/A 12.507 24...254 23..976 15.999 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.. Hebei Yuhuan Industry Co.449 17. Ltd. Ltd.206 18.424 2.412 17.588 23.. 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. Guangxi Cangwu Shunfeng Titanium Dioxide Co. Ltd.. Ltd..297 28. Jiangsu Yixing Yuxing Pigment Factory Guangdong Guangzhou Huali-sachtleben Chemical Co.800 60.291 9.330 20.620 23. Shenghua Group Deqing Huayuan Pigment Co. Ltd.560 10. Hunan Hengyang Meilun Pigmental Chemical Co. Guangxi Pinggui PGMA Co. Hunan Jintian Fertilizers and Chemical Engineering Co..103 20...568 21..540 N/A N/A 32. Ltd Hunan Xiangtan Niutou Chemicals Co.019 33.963 39. Hebei Xuri Chemical Co.643 22.873 17. Ltd. Shandong Dongjia Group Co.008 14. Pan Gang Group Chongqing Titanium Industry Co..Ltd.616 2003 98. cadmium pigment Lithopone Lithopone Titanium dioxide Lithopone Titanium Dioxide Lithopone Titanium dioxide Titanium dioxide Titanium dioxide Lithopone Organic pigment 37..828 35. Shenzhen Elementis Pigment & Chemical Co.. CNNC Huayuan Titanium Dioxide Co.222 61.478 38 .460 9. Ltd.884 38.Table I-3.657 19..239 35.604 24.402 15.423 16.457 16.051 N/A 18. Hunan Three-ring Pigments Co. Ltd.825 23. Ltd. Ltd.138 4 5 6 7 8 9 48. 1 2 3 Producer Jiangsu Tianpeng Chemicals (Group) Co.3-1 List of major producers in 2006 Output (t) No.085 15.355 18.827 23.024 17..430 30.201 15. Ltd.616 22. Yunnan Dahutong Industry & Trading Co.766 18.868 44. Hunan Changsha Fengchao Pigment Chemical Co. Shanghai Jinghua Chemical Co.230 34.758 38. Shanghai Yipin Pigments Co.960 20 21 22 23 24 25 26 27 28 29 30 22.234 N/A 16. Sichuan Lomon Corporation Jiangsu Taibai Group Zhenjiang Titanium Dioxide Joint-stock Co. Nanjing Titanium Dioxide Chemical Co.318 N/A 10.097 21. Ltd.605 62.862 38.956 N/A N/A 17... Ltd.651 N/A 8. Ltd. Ltd..410 8.287 38. Ltd.397 32..957 22. Ltd. Ltd.633 37..026 19. Ltd. Jiangsu Changzhou North American Chemical Group Anhui Tongling Anada Titanium Dioxide Co.

Huntsman. 4th biggest manufacturer of titanium pigment in the world. Major manufacturers such as Millennium. 39 . In May 2005. etc. the other was that several sets of new rutile type equipment in Shandong Jinhong. the price of rutile type products was between RMB19. By the end of the same year. Ken-mcgee and Huntsman.050/t. most manufacturers basically had no storage and the price of anatase type products universally went up with the markup of RMB300~500/t. the price of titanium pigment jumped four times in 2005 each with an increment of USD100/t to USD150/t. shut down some Sulfuric-Acid-Method production installations in recent two years due to the factors including economic benefit and environmental protection. When entering 2006. which was opposite to previous situation. From winter of 2003 to spring of 2004. the 2nd. No new plants were established by large international manufacturers since 1997. Here is the price of titanium pigment in some areas in July 2006.950/t and RMB20. In general. the price of rutile type titanium pigment declined slowly along with the increment of its output. which led to swift increment of the output of rutile type products. of which about 170 to 180 kilo tonnes are rutile type. Millennium. the quoted price was universally lower than RMB18. 2006. Under the condition of short supply in the international market. But in July 2006. Meanwhile. raised up the market price of titanium pigment again on January 1st. anatase type products were also very salable. On the contrary. Sichuan Lomon and Hunan Yongli were put into production. 3rd. demand for titanium pigment in the global market kept increasing steadily while the supply retrenched.000/t. the price of home-made rutile type products rose because of the shortage of supply. the price of rutile type titanium dioxide declined to some extent because of two reasons.Titanium pigment The price of titanium pigment is usually influenced by the supply & demand situation and the price of raw materials. International market In the past several years. Domestic market Similar to the international market. the price of titanium pigment in Chinese market also fluctuated widely along with the supply situation. One was that China imported 229 kilo tonnes of titanium pigment in 2003. At the beginning of 2003. and the markup stayed between USD100/t and USD150/t.I-4 Price analysis of pigment in China .

Diesel oil at that time was RMB4. In 2004 the price of raw materials was 3-4% higher from 2003. going up from RMB2.500 10. which led to the jump of energy price. Price of energy and transport charge hiked around 30-40% in 2004.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. are the very direct factors related its production cost.500/t in February to RMB2.500 16.400 10.000 15. liquid alkali and nitric acid.600/t in July in 2004. the price of rutile type titanium pigment will not decline in a vast scale but vary within a certain extent in the future. and coal reached RMB610/t. which brought the rise of iron oxide pigment price.500 10.500 18.Iron oxide pigment Price change in the past several years (from 2003 to 2005) Before 2003. it began to climb up rapidly from 2003 with the rise of production cost and other factors.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. sulphate. Sheet iron also became more expensive. In late March 2004. The price of sulphate and liquid alkali was up to RMB700/t. A turbulence happened in the international energy market in 2004. However. . transportation fee went up. and that of nitric acid reached RMB1.000 16.500 16. The price of these raw materials turned to rise in 2003. 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. the price of iron oxide pigment had kept declining.100 15.500 11. energy.300 16.000/t. and transport charge. Other important production sources such as energy and fuel influnced the price of iron oxide pigment in those years.400/t. Simultaneously. 40 . i) Force from the rise of production cost Raw materials for iron oxide pigment such as sheet iron.

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

Except some particular oversupply and short-supply in some places some time.000 740 method 5. development of the downstream industries of iron oxide pigment such as building materials. Consumption of this year will be upped by 4-6% from 2005. Most small-scale manufacturers will be closed by the end of 2006.000t. with the export volume of more than 600. Meanwhile. production of iron oxide pigment had been boosted with a total increase at least over 100. .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. The total consumption volume will be about 600. The stabilization benefits from the following factors: i) Balance between supply and demand of the industry According to estimation. It is assessed that the total domestic demand of iron oxide pigment in China will be around 250. the market of the entire industry will stay balanced in the short term.000 600 6. Usually. the supply and demand of iron oxide pigment in 2006 keeps balance on the whole.600 680 synthesis 6. coatings and rubber will be controlled at sound pace under the condition of macro-adjustment.000t during the whole year.000t because of large quantities of investment in the industry and the enlargement of production capacity.100 750 process 5. Closing them will benefit the stability of iron oxide price. 42 . those small-scale manufacturers produce low quality products with comparatively high cost.Demand situation of iron oxide pigment With the smooth rapid development of domestic economy in China.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. circulative economy and sustainable development of the country.000t in 2006.Production capacity of iron oxide pigment During the past several years. . demand for iron oxide pigment in China will keep rising. Their production is conducted under dangerous condition and causes serous pollution to the surroundings.

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. On one side. the production cost is up to RMB4. 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.800/t.000t/a will be not allowed. According to statistics. The cost rise of iron oxide pigment supports the price to stay reasonably high. this is in 43 . the production capacity of iron oxide pigment has been doubled over reaching 800. the State Department issued a policy in the early of the year that production with capacity below 5. For example.000 730 process 5.560 670 synthesis 6.250 750 Sulphuric acid Additive Liquid-phase According to export situation in recent years. Many measures are taken as macro-adjust the industry. This guarantees the requirement of transport for export in each region of China. At the same time. Some manufacturers put forward a suggestive price again in 2006. The improvement of transportation will also benefit the price stabilization.000t/a.600 580 6. the Chinese government pays more attention to protection of environment and natural resources and production security. the states speeds up the pace of macro-adjustment for iron oxide industry. As mentioned before. The average export price in 2005 was about 9-16% up from 2004.. which asks for higher cost for iron oxide pigment production. The over capacity comes forth and brings in pressure for the iron oxide industry.300/t at present from the original RMB3.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.800 700 method 4. In the face of this. ii) Policy of macro-adjustment for iron oxide pigment During the past 5 years. export price of iron oxide has begun to go up. oversea transport will cost more with the rise of oil price in the international market.

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. fuel oil. Since that above raw materials are all non-renewable resources.500/t in May 2005. On the other side. . zinc dust and potassium permanganate in 2005 were up by 25%. RMB230/t over than that in 2004. 20%. coil. 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.052 44 .260 20.664 N/A Export price 17. Forecast on the price of iron oxide pigment On the whole. and 90% from those in 2004 respectively. their prices will keep rising in the following years. this individual change won’t affect the whole price trend of stabilization. but also proves the successful development of Chinese iron oxide industry. which was 11. . However. As the first year of the 11th Five-year Plan in China. The cost to produce lithopone had increased RMB535/t only from January to March in 2005. the price of iron oxide pigment will keep stable in China in the near future. sulphuric acid. Influenced by the markup of raw material.1% more than that in 2004. it not only brings in more profit for the country. the price will be adjusted to meet the requirement of the demand and supply. 30%. specification and application in the international market. major export enterprises such as Guangzhou Huali-sachtleben. The average export price of lithopone in 2005 was RMB3. 2006 takes developing economy smoothly and rapidly as the theme.Chrome pigment The price of chrome pigment was about RMB15.accordance with the price raise of international iron oxide series.061 14. The price of raw materials for lithopone rose rapidly in 2004 and 2005. Guangxi Yuanjiang.110/t in China in 2005. 25%.Lithopone The average price of lithopone in 2004 was about RMB3.601 11. Xiangtan Niutou and Hengyang Meilun adjusted the export price to RMB3.000/t.230/t. 22%. Chinese iron oxide is generally accepted and recognized in quality.110 13. For example the prices of Zinc oxide.845 Import price 26. Further. and the profit was about RMB35/t.400/t~RMB3. Table 1-4-4 Price of chrome pigment in the recent three years (RMB/t) Year 2005 2004 2003 Domestic price 15.027 13.

The price of domestic lead increased almost RMB3. the growth rate reached 40%. reached 20%. copper.5 times more than the export price.600/t than that at the end of 2005 which was about RMB9.520 5. 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. and its cost accounts for about 50%-60% of the total production cost of the two ones.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) 5.330 4.The import price of chrome pigment was about 1. reached about 30%.200/t. aluminium and lead. one kind of raw material for the production of inhibitive pigment. The growth rate of the price of sodium molybdate. and that of zinc oxide.130 4.130 N/A Export price (USD/t) 4. .050 45 . zinc. one kind of raw material for producing molybdate red. Plumbous chromate made of lead is the major constituent of chrome yellow and molybdate red.

The import price was 1. so enterprises turned to exploited international market for relieving domestic competitive pressure. while the import volume declined 9% than 2004. however. etc. 66% of importation trade of titanium pigment of China was carried out by ordinary trade.1 Titanium pigment For a long time. 46 . 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. while the average export price increased 18%. at the same time. In 2005. During 1998~2004.I-5 Import and export situation of pigment in China I-5. and totally exported 157.425 tonnes at the price of USD1. ii) The growth rate of domestic output was higher than that of consumption. the export volume of Chinese iron oxide. Judging from the mode of trading. Modes of trading For a long time. the export volume increased at a very high year-on-year growth rate. while 98% of exportation trade was by ordinary trade mode.4 times as the export one. The average import price in 2005 increased 6% over that in 2004.321/t. processing with the imported materials. In 2005. the situation indicated that the gap between the import price and export price is shrinking gradually. which led to the fact that home-made products substituted some of imported titanium dioxide in some end use segments. lithopone and Chrome pigment has been far more than the import volume of them. China must import a large amount of titanium dioxide with high quality from abroad to meet the domestic demand.835/t.736 tonnes of titanium dioxide at an average import price of USD1. 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 export volume increased 67% over that in 2004. entrepot trade by bonded area. China imported 227. However. The modes of trading of titanium pigment in China in 2005 are listed in the following table. As a result. the import volume of titanium dioxide kept increasing at the average annual growth rate higher than 20%. the import volume of titanium dioxide has always been larger than the export volume. the import volume decreased. the import volume of titanium dioxide in 2005 decreased for the first time within the past eight years.

and the second biggest exportation destination was North America.14 100. Asia takes the biggest share of trade volume of Chinese iron oxide and titanium dioxide.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 114.425 Export Proportion /% 40. Table I-5.178 26.1-1 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. Nearly 50 percent of the imported titanium dioxide in 2005 was from Asia.19 100. Export to other countries is comparatively dispersive and generally lower than 7 percent of the total export volume.574 31.366 157.01 0 100 Volume/t 63. The most important export destination of Chinese titanium pigment is the USA where 48. 31% of titanium dioxide exported by China in 2005 was consumed in North America.00 Trading partners of Chinese titanium dioxide in 2005 As to the trading partners.622 56.39 31.33 24.516 3. which was at the same time the Chinese export destination with 40% of the exported titanium dioxide of China.01 0.736 Proportion /% 50.565 3.08 0.00 Regions of trading Among the trading regions.319 14. 47 .735 Proportion /% 66.84 14.25 0 100 Volume/t 154. Australia.129 776 560 0 227.45 11.8 1.425 Export Proportion /% 98.20 0.21 15.37 0.99 0.561 574 0 1 124 302 157.947 48. The second biggest importation region was Oceania.121 tonnes of titanium pigment was exported.099 28.923 22.38 1.97 18.863 1. Japan and USA.04 2.02 9. accounting for 30 percent of the total export volume.56 6.Table I-5.36 0 0.08 6.932 9.316 2.301 0 227. The import volume of titanium pigment from the four countries in 2005 accounted for 75% of the total import volume.773 35. the import trading partners are mainly Taiwan of China.34 0.

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

651 5.079 12.552 29.00 Trading customs of Chinese titanium dioxide in 2005 Major import customes of titanium dioxide in 2005 were Shanghai Customs and Huangpu Customs.95 0.04 1.32 1.1-4 Country/region where China imported titanium dioxide from in 2005 Country/region Taiwan.385 6.441 21.18 2.24 3.820 7.308 227.89 100.86 1.229 2.08 0.15 9.042 4.Table I-5.276 4.83 12.18 24.163 1. Qingdao Customs and Huangpu Customs.035 22.265 10.221 2.48 2.00 0.00 49 .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 67.43 3.223 5.73 2.759 4.898 56.601 21.36 100.078 227.907 1.02 2.822 7.736 Proportion/% 27.657 2.460 1.97 1. Export ones included Shanghai Customs.369 2.75 1.85 1. Table I-5.420 50.886 6.43 3.280 1.43 3. China Australia Japan USA Germany Malaysia England Saudi Arabia Singapore France Spain India Mexico Finland Czech Republic Others Total Import volume/t 61.36 3.48 3.736 Proportion/% 29.253 6.84 0.17 1.78 4.082 7.60 22.930 7.48 9.46 1.716 3.75 9.26 5.64 0.458 2.207 7.

25 100.1-6 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. In 2005.29 0.20 0.726 1.1-7.36 0.28 6. the consumption volume of single consumer is small.240 560 450 435 320 387 157.471 3.47 5.068 9. 50 .000 tonnes. Therefore.18 13. The major exporters of titanium dioxide in 2005 are listed in the Table I-5.08 1.00 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.425 Proportion/% 34.188 9. more and more enterprises get self-support import and export right.275 2.73 0.966 6. The major importers of titanium dioxide in 2005 are listed in the Table I-5. and the total volume of titanium dioxide of them occupied 70% of countrywide export volume.63 4. there were 22 exporters who had their export volume of titanium dioxide exceeding 2. Only a few large enterprises import pigment by themselves.1-8.063 20.462 38.Table I-5. which leads to the too high import cost if the consumers independently import pigment. importers of pigments are usually trading companies.11 2.79 0.913 10.28 0. So exporters of pigments are generally pigment manufacturers or their trading companies.60 24. In general.76 5.

Pan Gang Group Chongqing Yugang Titanium Dioxide Co. SINOPEC Jiangsu Imp.242 3.11 2. Guangxi Cangwu Shunfeng Titanium Dioxide Co.392 2. Guangxi Dahua Chemicals Plant Shanghai Siji Titanium Industry Co..27 3. Pan Gang Group International Trade and Economy Co.06 2. Shandong Dongjia Group Co. Ltd.059 157.334 3.Table I-5. Ltd.529 4.11 2. Ltd.67 3.. Ltd.127 2.63 5. Ltd. Ltd.045 49. Gansu Sangkai Commercial Co.296 2. Guangdong Guangzhou Leitong Trade Co. Ltd..87 2.62 2.16 100.189 11.868 8. Ltd. Shanghai Jianghu Titanium Dioxide Chemical Products Co. Jiangsu Zhenjiang Fanhua Imp.260 2. Co. Shandong Zaozhuang Tianyuan Fine Chemical Co. Ltd.44 1. Ltd. Jiangsu Zhenjiang Titanium Dioxide Co. Ltd. & Exp.. Guangxi Tengxian Fuhua Chemicals Co.00 51 .791 5..130 3.37 1. & Exp.. Ltd.835 3.05 1. Co..35 1. Ltd.723 5. Liaoning Maanshan Jinxing Chemical (Group) Co.717 6.766 8. Ltd..52 1.54 4..... Henan Luohe Xingmao Titanium Industry Co...1-7 Major exporters of titanium dioxide in 2005 Exporter Sichuan LOMON Corporation Shandong Jinhong Titanium Dioxide Chemical Co.43 1.329 3.266 2.62 2.703 4.. Ltd. Henan Billions Chemicals Co.. Guangzhou Zhujiang Chemical Group Co. & Exp. Ltd.46 1... Shandong Jinan Yuxing Imp.159 2. Ltd. Ltd.225 2.. Ltd.92 7. Zhejiang Ningbo Xinfu Titanium Dioxide Co.47 5. Ltd.55 1.425 Proportion/% 10. Co.43 2..440 2. Others Total Export volume/t 17.30 31.

.88 1. Tianjin Tianbao International Logistics Co..620 2...119 227. Ltd... Shanghai Sanchang Imp..882 3.80 1.620 6.524 4.445 9. Ltd. Ltd.220 5. Ltd.04 1. Ltd. Others Total Import volume/t 16..33 0.07 6.90 1. Ltd.146 2.381 683 3.340 4. Ltd.35 2. Guangdong Guangzhou Kemeiqi Chemical Industry Co.34 0.07 1.63 1. Ltd. Jiangsu Huihong International Group Cotton Knitwear Imp..351 60 25 227. Nippon Paint (China) Co.736 Proportion/% 7. Co.78 4. Co. Table I-5. Ltd.. Ltd.556 5 157.. Ltd.352 4. Ltd.00 52 . Fujian Sannong Chemicals Imp. Ltd. & Exp... Ltd. Zhejiang Hangzhou Hemeng Chemical Raw Materials Co. Liaoning Shenyang Jin’ao Chemical Trade Co.98 1. Guangzhou Huiyang Foreign Processing & Assembling Service Co.300 25.816 3. & Exp. Guangdong Guangzhou Huasheng Paint and Pigments Co. Guangdong Shenzhen Bao’an Foreign Economic Development Co.1-9 Transportation mode of import & export of titanium dioxide Import Transportation mode By sea By road By railway By air Total Volume/t 202.00 100.099 3.15 1.00 Volume/t 156.425 Export Proportion/% 99. China Agricultural Producer Goods Group C.. Guangdong Guangzhou Nippon Paint Co.70 1... Shanghai Yuanxin Imp & Exp.78 2.01 100. & Exp.43 0.829 2. Co.Table I-5.03 0.24 1. Ltd. Ltd. Dupont Trade (Shanghai) Co.446 2.38 1.02 51.1-8 Major importers of titanium dioxide in 2005 Importer Shanghai Hailuo Building Materials International Trade Co.67 1.00 Transportation modes of the international trade of titanium dioxide Both imported and exported titanium pigments were mainly transported by sea. Ltd.288 4.42 100.83 11. Guangdong Dongguan Foreign Processing & Assembling Service Co.100 15. Sichuan Chengdu Shide Plastic & Rubber Industry Co.568 8..380 2. Ltd.15 1. Trade Co.23 0..720 3.320 117. Ltd. Guangdong Yuntianzhi Trade Co..736 Proportion/% 88.900 4.. Shanghai Meililian Chemicals Trade Co.20 3. Ltd.73 2.

568. Import volume was 197.675 329.0% 30.000.447.433t iron oxide pigment was exported. Export value of iron oxide in 2005 was increased at a growth rate of 13.2.1-1 Export situation of iron oxide in recent years Year 2001 2002 2003 2004 2005 Export volume (t) 170.324t in 2005 and 197. grade.000.447.000 240. Nevertheless.433 Growth rate of volume (%) 17. The situation of export and import in recent years is shown as follows: Table 1-5.5% According to export situation in recent years. The average export price in 2005 was about 9-16% up from 2004. the annual growth rate of export volume turns to exceed that of import year by year in the past. oil. which made export value of USD183.000 161. Export price of iron oxide pigment was averagely increased more than USD40/t from USD516. export price of iron oxide has begun to go up.1 General situation of export and import General situation in the past According to statistics from the Chinese Customs Bureau.000 109.73/t in 2004 to USD556.2% 13. Chinese iron oxide pigment has achieved great growth in both import and export.2. On one side. 329.86/t in 2005.5% 48. electronic and magnetic materials.800t in 2004.350 183.000 96. China imported large quantities of iron oxide pigment than ever before.4% in 2005. 2/3 of iron oxide pigment in the international market is made in China.1% 13. As mentioned before. this is in accordance with the price raise of international iron oxide series.000 200.000.500.4% Export value (USD) 82. it not only 53 .I-5. China still has to import high quality iron oxide pigment to meet the domestic demand from such fields as top grade coatings. In 2005. In recent years.500 Growth rate of value (%) 17. there is a gap between Chinese iron oxide and the world’s top grade one in property. namely 53% of the total output. On the other side. Export volume of iron oxide grew quickly at a rate of 5. China exported 312. Although China is the top country in producing iron oxide pigment in the world and it exports it a lot.3% 5. Iron oxide industry in China generally depends on export. I-5. The difference between both growth rates resulted from the growth of export price. In the past two years.5% which was as twice as that of the export volume. chemical catalyzer. the import volume of iron oxide pigment jumped up to as much as four times of the volume in 2001.000 312.6% 20.2 Iron oxide pigment Chinese iron oxide pigment contributes a great proportion to the global consumption of this pigment. In 5 years’ time. cosmetic and pharmaceuticals and so on.675t iron oxide in 2004 with export value about USD162 million. price and service.

Southeast Asian and Middle East including Spain.2.9t 105.769t and USD51.753t 44.000 69. I-5.324 Import value (USD) 47. and the value was 4% off. The situation of export according to destination in recent two years is shown as follows: 54 .9% and the export value was increased by 20% in the first half of the year. the export volume was increased by 11.000 was made there. specification and application in the international market. It is estimated that the iron oxide industry will face a burden imposed on by export surplus.64% of the total exported iron oxide.490 87.945 on year -6. UK.brings in more profit for the country.90% 20% 93467.632. Europe is the second region where China exported 82.583. Table 1-5.471 99500. Table 1-5.000.200 197.163.400 138.06% -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 2006.553t iron oxide to in 2005 and export value of USD46.834.000 61. volume of import in the first half year was 6% off from 2005.1% -0. Germany and Canada and so on. And the export profit made in North American market in 2005 reached about USD63. the annual export volume will exceed 350.463.78t 42.1-2 Import situation of iron oxide in recent years Year 2001 2002 2003 2004 2005 Import volume (t) 61. Export volume and profit of iron oxide in North America in 2004 reached 112.293t iron oxide to North America in 2005. and the export value will be over USD200million.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. Chinese iron oxide is generally accepted and recognized in quality.360 Growth rate of import volume (%) 57. import of iron oxide will off from the volume n 2005.600 163407. Other major export destinations are Europe.000.69t 88.2.933.000.000. amounting to 34.800 197.960 respectively.328. In contrast. but also proves the successful development of Chinese iron oxide industry.856.500 11. of which 114.103t was exported to America.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 182.393.2.000 82.4% 43.2 Export destinations and import original regions of iron oxide pigment The first major export destination of iron oxide is North America.8% 43. However. China exported about 124.000t this year.617. According to the import and export situation from January to June this year.100 96.

001 329.000 564.965.51 11.30 9.000 7.97 1.000 561.183 46.675 3. Taiwan Province.317.52 77.000 539.2.810 37.584 63.000 161.22 6.36 16.268.56 576.55 2.836 20.201.103 46.000 511.64 14.293 63.454 62.904.358 1.608.207 9. 4.00 19.496 5. America.593 13.Table 1-5.897 11.80 Table 1-5.350 504.553 56.135.56 112.978.129 12.672.00 Iron oxide pigment is mainly imported from Hongkong.454 9.568.447.548.583.126 6.25 11.795t in 2005.76 1.01 2.736 5.40 22. Hongkong is the region from which the Mainland of China imports the most iron oxide with a volume of 48.894 329.71 Average growth rate of price year on year (%) 12.87 650.47 1.791 8.190 485.538 6.984.095 8.52 553.540 36. Imported iron oxide pigment from these five regions in 2005 amounted to nearly 80% of the total import volume.769 51.023 2.82 1.500 562. Japan and South Korea.408 8.97 2.40 100.2-2 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) 114.851 11.10 22.292 312.632.188 512.899. The following table shows the import situation of iron oxide from main countries and regions in 2005.92 16.788 5.060.98 1.433 4.123 489.339 8.201 12.2. 55 .12 503.960 Export volume(t) 2004 Export value (USD) Average price (USD/t) 453.163.03 7.000 500 183.74 1.53 2.000 36.993 12.25 4.40 82.433 Proportion (%) 34.08 10.69 19.2-1 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 7.50 124.30 10.994 5.

00 I-5.09 100.478. 56 . The following is the export situation of main provinces in recent two years.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) 48.795 44.029 2.447 197.35 1.2.07 0.57 11.2.64 1.085 21.28 1.513 15.294 1.973 1.493 2.375 1.Table 1-5.807 3.738 25.06 1.38 2.39 24.58 4.324 Proportion (%) 26. and export value of about USD61 million was made.57 1.64 8.635t iron oxide pigment was exported in 2005.70 0.747 2.068 14.48 1.3 Major provinces of import and export in China Major export provinces and regions of iron oxide pigment in China are the main production areas.20 13.861 8. Zhejiang Province is the top one where 119.099 3.

745 2.660.640 Volume (t) 118.433.542 297.759 16.000 2.829 4.060.758.051 1.350 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.309 209. For example.085 112.157.827.680 291.800 0.210 34.973 145.685.568.163.293 172.747 3.060 11.070 21.238 5.490 1.376.500 155. 57 .070.540 9.546 12.223 7. Guangdong Province keeps the top one to import iron oxide pigment in recent years.907.846.570 7.320.750 7.635 92.625 53.440 253.180.633.430 15.025 312.440 16.000 3.330 49.000 184.000 20.512 107.000 413.477.095.455.731 860.334.497.891.086 6.000.034 62.2.680 3.120 78.563.000 3.044.065.620 6.624 2.685 46.842 11.632 29.199.301 613.226 666.240.979 51.070.880 4.815.000 443.165 32.550 54.385 4.900 409.061.491.509 26.900.898.946.140 40.700 3.418 546.937 2.053 1.000 119.656 1.370 5.447.Table 1-5.000 22.798.405.398 14.675.125 2.000 8.043.000 2004 Export value (USD) 58.215.000 1.013 329.136 45.714 121.983 239.600 27.168 50.815.000 69.743 76.3-1 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) 119.734 67.746 38.550 378.000 Export value (USD) 61.440 5.100 9.940 85.035.877.600 20.854 153.461.690 33.060 36 183.200 70.430 1.930 21.793 14.012 52.550 12.000 1.244 87.674 1.116 364.001 728.600 54.596.357.000 26.235.507 2.427.990.629 161.478.000 9.050.000 96.788 1.991 157.

96 4.00 1.180.847 436.98 112.46 0.355 1.748.934.90 3.434.553 137.368 301.52 1.663.473.872 402.804 726.131.717 96.26 150.150.276 20.522 13.63 480.941 3.883.49 47.329 368.28 5.20 29.805.70 313.34 20.76 0.795.00 2.34 1.09 1.408 731 1.169.04 197.357.10 8.284 1.720.497 308.11 49.70 12.88 374.336.87 630.218 122.768 35.648.45 7.2.03 4.331 754.463.572 571.021 87.80 644.30 445.914 9.527.00 0.4 Export and import Customs for iron oxide pigment Customs for exporting iron oxide pigment from China are mainly Shanghai Customs.40 6.997.838.261 1. Major import ports are Shanghai Customs.194 305.937.331.344 24.763.587 205.02 0.49 60. 58 .94 2004 Sum (USD) 4.258 11.393.30 2005 Sum (USD) 46.885 1.70 7.30 48.3-2 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) 64.222 40.72 7.859 226.556 46.586 60.315.985.935 87.820.796.009 111. Shenzhen Customs and Ningbo Customs and so on.80 173.90 1.714 139.384 3.293.786 86.470 1.85 9.55 6. Huangpu Customs and Nanjing Customs.318.60 520.19 28.541.00 865.451.400 640 82.889.395 484.933 2.453 1.424 57.390 9.118 2.Table 1-5.502 3.564.70 78.405.324.692 428.04 42.08 197.48 51.356.65 2.50 7.363 Volume (t) 54.106 15.56 258.590.04 26.954.326 3.490 1-5.60 186.92 3.350 11. The following are specification of export and import of iron oxide pigment in major ports in 2005.445 4.56 176.403.153 30.572 8.00 2.643.178.353 28.947 201.2.934.60 860.534.70 739.

04 0.160 100.640 2.433 5.273 6.2.298 3.958 3.500 4.150 0.821 9.990 4.60 1.38 0.400 4.324 Proportion (%) 31.290 12.894 8.820 14.059 7.819 2.010 1.153 24.080 3.336 2.95 1.279 5.433 Proportion (%) 66.247 713 555 117 157 329.363 11.250 0.249 819 506 335 287 323 197.4-1 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) 219.21 0.00 Table 1-5.650 0.66 15.2.85 0.730 16.184 3.000 1-5.66 1.4-2 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) 62.680 4.243 8.49 1.73 0.683 8.04 100.01 0.999 31.403 1.627 32.2.410 0.570 7.5 International trading approaches of iron oxide pigment There are mainly two channels to export and import iron oxide pigment in China in recent 59 .608 49.170 0.Table 1-5.475 5.17 9.17 0.

103 5. However. Therefore.72 0 16.968 259 0 38 197.2. After China entering the WTO to take part in the global competition.2. such as ordinary trading.04 0.2.02 0.490 196 118 60 3 2 0 329.64 0.02 100. export and import of iron oxide pigment in China mainly depended on trading company and agency.80 0.944 89.54 43. processing with the imported materials and so on.00 0.324 Proportion (%) 83.640 12 329.export in recent years apparently takes on more. enterprisers of the iron oxide industry will be the key role of international trading of iron oxide pigment.years: direct trade and trade through agency.00 100.5-1 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 323.00 100.32 1.06 0.00 Import Table 1-5.6 Application of exported iron oxide pigment 60 .04 0. Table 1-5. China enterprisers including iron oxide manufacturers gradually become mature and have nurtured their business capability and experience. the self.18 0.58 0.00 0. Long ago.08% of the total export of iron oxide pigment. Iron oxide pigment is exported and imported in several modes in China.103t.324 Proportion/% 42. Direct trade is to make tractions by iron oxide manufacturers themselves.947 83 85 22.433 Proportion/% 98.00 Volume (t) 323. and the export volume by this mode in 2005 was 323.193 0 32.26 0. The most common one is ordinary trading mode.08 1.00 1-5.092 42 197.888 3. 04 11.882 1.5-2 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) 165.13 0.00 0.00 100.50 0.00 Volume/t 83.422 Export Proportion (t) 98. amounting to 98. 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.

40% 1-5.86/t.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. Among those exported. Exported iron oxide is still scarcely applied in top grade coatings.7-1 Price of import and export in 2004 and 2005 Export price (USD/t) 2005 2004 Growth rate (%) 556. the import price of iron oxide is much lower than export price. It is calculated that the import volume of iron oxide from these enterprises in 2004 reached 60% of the total export volume.2.25/t. In 2005 the average import price was USD443. Substantive investment in the industry from developed countries and multinational companies also promotes the development.73 7. In addition. 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.000t/a.2. demand for iron oxide pigment from the international market increasingly grows. Exported iron oxide pigment is extensively used to paint brick. which brings in opportunity and room for the development of its import and export. Several world-famous multinational companies have invested in building iron oxide manufacturers in Mainland of China.86 516. cosmetic and pharmaceuticals and so on.9 Problems on foreign trade of Chinese iron oxide in 2006 61 . Domestic demand for iron oxide with high quality is another reason for import development. export price was USD556. Table 1-5. electronic and magnetic materials.56 6. most of iron oxide pigment has properties suitable enough to be applied in building and construction in the international market. Unlike any other kinds of pigment. and concrete and wall and so on.7 Comparison of import and export prices There is a typical feature on price of iron oxide foreign trade in recent years. export volume of iron oxide pigment in China has exceeded 300.Currently. title.25 416. the import growth of iron oxide in China was impelled by individual and joint venture enterprises in the past three years. Therefore. Here is the general situation of price in recent two years.80% Import price (USD/t) 443. China has to import a large quantity of iron oxide pigment in urgent need for building materials.2. Firstly. 1-5. 1-5. Although iron oxide pigment from China has better quality than before and is widely accepted in the international market. oil. There are several factors driving the rapid growth. there is still a deep gap between Chinese iron oxide and the world’s top grade one. chemical catalyzer.2.

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. Competition in the industry depends on price war. Further more. Investment in researching in the industry is insufficient. There are about 40 export manufacturers of iron oxide in China. among which 10 have export value exceeding USD1million. there are still apparent and profound problems in the iron oxide industry.Export of iron oxide in China has made achievement in promoting relevant fields to develop. anti-subsidy and guarantee measure is spreading from traditional labor. However. and the average export volume of each is 2. Half of the export manufacturers have their export value below USD500 thousand. Consequently. 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. Sharp trading conflict It is estimated that international antidumping.360t/a. the whole industry of iron oxide will have difficulty in exporting and absorbing oversea investment. Export value affected is up to USD5billion. comparative interest can be obtained through labor division of the globe. 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 following are some problems for Chinese iron oxide pigment to export. and trade deficit will happen. There are only three or four manufacturers with the export value exceeding USD10 billion. Currently. the capital will outflow. which imposes pressure on export. The iron oxide industry is also at the stage of oversupply.intensive industries to motor industry. There are about 140 manufacturers producing iron oxide pigment in China at present. the average production scale of these manufacturers is around 5. Expense for iron oxide to export will be raised by the implementation this law. the 62 . earning foreign exchange and stimulating region economic development. Poor independence of research and development Independent research and development is poor in the iron oxide industry in China. 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. Far away from the investment of 20% of the sales profit in developed countries. apparatus and iron& metal industry.700t/a. Lack of concentration for the industry to export Export of iron oxide pigment is not concentrated in China.

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

405 2003 86.200 2.156 3.693 64 . The top export destination of lithopone was Egypt.870 2.290 tonnes in 2005 accounting for 39. 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. Table 1-5.547 2.959 5.3% of the total exported lithopone.693 tonnes of lithopone was exported to oversea in 2005 which meant that 31.I-5.3 Lithopone China is a net exporter of lithopone.391 79.3-2 Export destination of lithopone in 2005 No.290 9.000 Table 1-5.441 2.693 2004 85.981 2.8% of the national output was exported. 79.130 896 827 736 728 8.3-1 Export volume of lithopone in the recent three years (Unit: t) Year Export volume 2005 79.377 2. where the export volume reached 31.055 1.109 2.

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

6% of the total import respectively. Thus there is a deep gap in price between the two.041 tonnes.1% of the national chrome pigment consumption. low-end. 16. 18.880 tonnes. 42. Holland and South Korea. 465 tonnes.511 tonnes of chrome pigment. and South Korea. 12. 8. 366 tonnes accounting for 35. Export analysis China exported 15.6%. The import volume was 1.I-5.0%.316 tonnes accounting for 19. 66 . Japan.3% of the total output in 2005. The top 3 export destinations of chrome pigment were Spain. or primary products while the imported are mainly upper-scale and scarce products with high-quality.5% of the total exported chrome pigment respectively. 1.916 tonnes of chrome pigment in 2005 which meant 12.4 Chrome pigment Import analysis China imported 2.942 tonnes.7%. The export volume was 2. 2. The top 3 import origins of chrome pigment were Hongkong.0%. The exported chrome pigment are middle-class.

041 465 366 169 161 152 149 120 108 51 35 8 3 3 2 83 2.Table 1-5.916 67 . 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.

Table 1-5.316 1.511 68 .095 708 667 600 513 465 454 386 369 329 279 247 244 189 79 64 20 1.665 15.942 2.4-2 Export destination of chrome pigment in 2005 No. 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.

64% in the past three years.7% 4.5-1 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 11.664 105.I-5.5-3 Import and export details in the recent three years Year 2005 2004 2003 Import/t 31.215 32. According to Chinese Customs’ statistics.5% 69 . their export volume of organic pigment accounted for above 90% of their output. while there were 8 origins in 2004. high-level coatings and coatings printing etc.929 Growth rate -4. 10-40%. In 2005. ink and coatings chose more qualified homemade organic pigment.9% -6. the declared export volume exceeded the output in several Sino-foreign joint ventures and foreign-owned manufacturers.0% -3. there were 7 import origins each having the import volume above 1.987 85.2% 23. Table 1-5. Insofar as we can see.833 34. Most of the imported organic pigment were high-grade used in plastic.5 Organic pigment The import volume of organic pigment decreased year by year with the annual growth rate of -4.0% Export/t 114. Table 1-5. much higher than that of other Chinese producers. which showed that Chinese producers of plastic. USA was the top export destination of organic pigment all the time in the past several years.691 Growth rate 8.000 tonnes.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. The imported organic pigment were mainly applied in plastic masterbatch and high-grade coatings.8% in the past three years.

5 2.900 5.654.0 31.0 1.1 3.0 3.96 3.534.41 6.287.800 7.100 3.09 2.52 Table 1-5.807.20 3.89 9.5-6 Major import regions of organic pigment in China in 2005 No.19 8.Import analysis of organic pigment Table 1-5.5-4 Import origins of organic pigment in 2005 No.100 71.100 6. 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) 8.0 Price (USD/t) 3.50 5.214.214.600 490.35 8.300 4. 1 2 3 4 Region Guangdong Province Shanghai City Jiangsu Province Shandong Province The other 19 import regions Total Volume (t) 19.1 32.000.147.13 Table 1-5.0 4.994.5-5 Import origins of organic pigment in 2004 No.70 5.35 2.033. 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 18.888.17 11.800 1.8 Table 1-5.5 4.711..52 70 .218.900 4.180.93 5.638.39 2.214.286.0 1.462.57 7.800 Price(USD/kg) 3.375.000 1.400 1.39 9.456.033.330.72 5.67 7. 1 2 3 4 5 6 7 Taiwan South Korea Japan Germany USA Hongkong Indonesia The other 35 import origins Total Origin Volume (t) 6.198.80 5.8 3.833.485.3 1.5-7 Trade method of the imported organic pigment in 2005 No.800 Import price (USD/kg) 4.5 1.622.71 2.634.200 31.27 5.2 7.55 5.294.12 3.642.500 31.8 2.

7 9.070.45 4.027..5-8 Export destinations of organic pigment in 2005 No.692.987.29 2.5 37. 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) 15.15 4.76 4.668.352.14 4.34 3.598.24 4.84 2.1 3.6 3.216.1 Price (USD/kg) 4.Export analysis of organic pigment Table 1-5.0 5.8 3.999.65 4.664.5-9 Export destinations of organic pigment in 2004 No.740.6 7.86 4.567.657.14 71 .314.056.399.9 3.90 4.70 3.37 5.54 3.6 9. 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) 17.44 4.0 Price (USD/kg) 4.9 3.9 114.8 3.74 5.9 7.14 3.071.5 5.275.6 4.3 8.545.40 4.730.6 39.33 Table1-5.894.58 4.08 5.0 3.2 6.630.3 9.8 9.1 3.4 105.74 4.323.802.38 4.014.27 4.

67 4.33 72 . 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) 24.504.6 705.Table 1-5.985.1 Price (USD/kg) 4.1 23.0 24.098.99 3.2 114.04 3.80 4.9 27.302.33 Table 1-5.1 Price (USD/kg) 4. 1 2 3 Ordinary trade Processing with imported materials Processing and Assembling Other Total Trade Volume (t) 83.92 4.9 4.14 4.4 2.133.1 5.956.400.5-10 Active export regions of organic pigment in China in 2005 No.5-11 Trade method of the exported organic pigment in 2005 No.5 8.44 4.452.57 4.69 3.664.4 13.73 4.568.550.9 10.07 3.664.35 3.2 114.670.

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

paper making and rubber industries. Table I-7. Pigment is chiefly consumed by coatings. while it was only 6.063.9%.7% Figure I-7.238 70.2% of total pigment consumption volume. The increment of pigment consumption mainly comes from inorganic consumption growth because inorganic pigments accounted for more than 90% of pigment consumption.1-1 Apparent consumption of pigment in China in the past Apparent consumption (t) Year Inorganic pigments 2001 2002 2003 2004 2005 887.000 1.4% of pigment in 2005.136 tonnes are organic pigment. but the growing speed was not even.8% 9.300 Organic pigments 48.773 1. The following table and figure showed the consumption volume and consumption structure of pigment in China in the past.436 tonnes.9% 6. ink.2% 7.506.011 1.300 tonnes are inorganic pigment and only 73.410.397 73.000 1.3% 14.9% 5.408 1. Coatings industry was the biggest consumer of pigment.1 Summary of consumption The consumption of pigment in China increased in the past years.136 Total 936. which totally consumed 82. of which 1506.9% 29.037. the apparent consumption volume of pigment in China reached 1579.6% 3.436 Grow rate N/A 10.177 50.1% Coatings Plastic Ink Paper Rubber Others 74 .7% in 2005.I-7 Consumption situation of pigment in China I-7. In last year. even 95% in 2004 and 2005. This was just the same as the situation all over the world.823 986.579. occupying 51. The year-on-year growth rate in 2004 was 29.1-1 Consumption situation of pigment in China in 2005 17.011 1.480.140. plastic.212 76.9% 51.788 1.

the masking power of Titanium Dioxide Rutile and Titanium Dioxide Anatase is 5. Consumption of titanium dioxide in China during 2001~2005 still kept increasing with the CAGR of 13.56 and 4. The following table showed the comparison of performance of Pigment White.33. This should be attributed to the persevering endeavor of titanium dioxide manufacturers in the past 90 years.37 2. the consumption volume of titanium dioxide in China was only 163kt. such as white content. On the aspect of reducing power.2. dispersivity and chalk resistance as well.67 5.55 2. high luster and good dispersivity.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.2.76 2.00 1. while it increased to 379kt in 2000.1 Consumption situation of titanium pigment in China As titanium dioxide is nontoxic with advantages of best opacity. It also has good white content. Titanium Dioxide Rutile and Titanium Dioxide Anatase are 6.2 3. ink. it is considered as the best white pigment in the world and is widely used in coatings.I-7.5% during the “Ninth Five-year Plan”. respectively. In theory. Table I-7. titanium dioxide has the highest refraction coefficient which leads to some good optical performance such as the best masking power (opacity) and reducing power.6% although the speed of development was lower than that in the “Ninth Five-year Plan”. In 1996. of modern Titanium Dioxide Rutile has been improved to a vast extent. The CAGR of titanium dioxide consumption volume was 23.09 2. rubber and cosmetic industries. Properties. paper making. Titanium dioxide has two kinds of crystalline forms including Anatase (namely A type) and Rutile (namely R type).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. 75 . The following figure shows the consumption situation of titanium dioxide in China in recent years. reducing power. times as that of ordinary lithopone. Consumption of titanium dioxide in China increased rapidly. masking power.9 4. chemical fibre.6 6.02 2.81 times as ordinary lithopone.25 and 4. white content and luminance brightness.1 6. The development speed of titanium dioxide consumption in China was much faster than the average level in the world.2 4.2 3 Refraction coefficient 2.0 5.93 1.2 Introduction to consumption situation of each pigment I-7. plastic.

0% 62. approximately accounting for 62% of total consumption volume. of which 670.8% 0. 76 .0% Paint Plastic Paper Ink Rubber Chemical fibre Others .4% 18. coatings industry brings heavier pressure on titanium pigment on the aspects of quantity.2. titanium pigment can also strengthen the mechanical strength and adhesive attraction of lacquer film. In 2005. The above industries generally need Titanium Dioxide Rutile and some special Titanium Dioxide Anatase. Besides the above.Coatings (paint) Industry Coatings industry is the biggest consumption field of titanium pigment. Here is the consumption pattern of titanium pigments in China in 2005. good tinctorial strength.8% of pigment grade titanium dioxide.Figure I-7. rubber and chemical fibre industries. Coatings (paint) industry is the No.311 tonnes. prolong the life of paint film. According to statistics in 2005. Coatings. At the same time. plastic and paper making industries totally consumed 85. prevent crackle. quality and specification. Figure I-7.2. followed by ink.1 end use sector of titanium pigment. the apparent consumption of titanium dioxide in China was 752.0% 5.311 tonnes are pigment grade (People usually call pigment grade titanium dioxide as titanium pigment). etc. Along with the development of Chinese architecture and automobile industries. reaching 416kt.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. near 62% of titanium pigment was consumed in coatings industry. protect lacquer film from ultraviolet and water. titanium pigment also has the most application to coatings industry in the pigment family. plastic and paper making industries. especially Titanium Dioxide Rutile. Coatings that are made of titanium pigment are technicoloured with many advantages including high masking power.0% 4.8% 5.1-2 Consumption pattern of titanium pigment in China in 2005 4.

Titanium pigment is the basic white pigment of architectural coatings and important to maintain the ornamental property.6% 19. In recent years. automobile paint and plastic paint also need lots of titanium pigment. toys decorated by plastic lacquer containing toxic materials will be strictly limited by EU. In 2005. The annual consumption volume of titanium pigment in China is about 750kt. weather resisting property and chemical corrosion resistance of coating.6% Growth rate -1. and during 2006~2010. 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.2. around 121 kilo tonnes of titanium pigment was consumed in this industry.Plastic Industry Plastic industry is the second biggest end use sector of titanium pigment.1% Growth rate -1. which strongly stimulates the consumption of titanium dioxide.8% 23.920kt.Despite the fact that titanium pigment is expensive than ordinary lithopone in the international market. It is estimates that the growth of coatings’ output in China in the future is slower than before.6% and 19. And the CAGR of output and consumption volume in the past five years was 20. In 2005. coatings industry of developed countries mainly uses titanium pigment as white or lightcoloured covering pigment and achromatic pigment.7% 21. the output and consumption volume of coatings in China reached 3. At present.1% 28.7% 18. In the future. China will keep the increasing demand for coatings because of the fast development of architectural.44% 11. Titanium pigment does not 77 .5% Consumption/t 195 214 254 309 392 19.9% - . Besides architectural coatings.1%. both the quality and the category of home-made Titanium Dioxide Rutile and Titanium Dioxide Anatase can meet the demand from architectural coatings. respectively. container paint. However.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 20.97% 9. accounting for 18% of total consumption volume. Chinese coatings industry developed quickly. coatings’ output in China will increase with a CAGR of 11%. of which 150 kilo tonnes are used as architectural coatings.7% 26. and it not only gives plastic products bright color but also good intensity. carpentry paint.830kt and 3. 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. Table I-7. Titanium pigment can be almost used in all thermoset and thermoplastic plastics. shipping paint. furniture and automobile industries.

titanium pigment for plastic is usually pre-treated on the surface by silicon or aluminum.8% 12. and domestic output increased from 3.2% - 20. Table I-7. The apparent consumption volume of PVC in 2005 was 7.800kt in 2010.1-3 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 2.450 kilo tonnes in 2010. PVC industry in China also developed in the past.0% 14. Titanium pigment is usually used in polyolefin (mainly low density PE).4%.5% 29.9% 3. However. It is estimated that the output of PE in China will increase with a CAGR of 13. and the apparent consumption volume of PE in 2010 will reach 17. which stimulates the consumption of pigment especially titanium pigment.influence the insulation property of plastic products.1% 16. Prior to application.5% 3. PS.6% 8.2% 557 577 625 710 750 22.260 kilo tonnes.8% 25. titanium pigment is mainly used in high-class paper and thin paper. PVC. the consumption volume of titanium pigment for paper making was about 38. Besides PE and PVC.500kt in 2005. Plastic industry of China experienced rapid development in recent years. In 2005.030 kilo tonnes of PE and imported 5. ABS. During the “Tenth Five-year Plan” (2001~2005).500kt. with the average growth rate of 2. At the same time. 78 .024 20.5% in the coming five years and reach 9.5% 12.Paper making Industry Paper making industry is the third biggest end use sector of titanium pigment.4% - 7. other plastics will also develop rapidly in the future.8% 5. As the filler of paper.0% - 9.7% 13. But laminated paper needs Titanium Dioxide Rutile with superficial treatment for better light-resistant and heat resistant properties. The rapid development of PE industry in the future will largely promote the consumption of titanium pigment.7% 12.6% 719 810 879 910 1.000kt.6% 8. In general.5% 13.8% 15.5% 310 355 401 503 650 17. the output of PE in China grew with an average growth rate of 11%. titanium pigment for paper making is Titanium Dioxide Anatase without superficial treatment which can fortify the white content of paper. Titanium pigment for plastic is mainly rutile type.7% - .9kt. China produced 5. 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.5% 5. It is estimates that the demand for PVC in China will increase with the CAGR of more than 13% and reach 13.2% 15. In 2005.2.096kt in 2001 to 6.

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

rutile is not soft like anatase.000 258.404 Factory of Ministry of Nuclear Industry also produced a small amount of titanium pigment for chemical fibre in the 1990s.000 302. The refractive index of titanium pigment is quite different from that of fibre. Technological index of titanium pigment for chemical fibre is more rigorous than that of ordinary anatase type titanium dioxide. Since 2001. China has to import titanium pigment for chemical fibre at a high price.9kt. which leads to a perfect flatting effect. Nanjing Grease Chemical Plant established a production line of titanium pigment for chemical fibre with the capacity of 1.2. approximately accounting for 5.8% 4.000 246.2% Growth rate 10.Table I-7.2% Growth rate N/A 10. the demand for titanium pigment used as flatting agent approaches 30kt. and to 2010 will reach 580kt.000 242. so textile and chemical fibre industry usually uses titanium dioxide anatase. It is estimated that Chinese demand for ink in the next five years will increase with an average annual growth rate of 10%. Although the refractive index of titanium dioxide rutile is higher than that of titanium dioxide anatase.1 in the world.000 13. . 80 .000 274. Titanium pigment for chemical fibre generally does not need superficial treatment.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 205.3% 11. For many years.0% 13. titanium pigment for ink amounted to 38.3% - In 2005.000 361.000 220.2% 5. Titanium pigment is used as “flatting agent” in synthetic fibre.9% 17.Textile and chemical fibre industry Another important consumption field of titanium pigment (especially anatase type titanium pigment) is textile and chemical fibre industry.8% of total consumption volume. In the beginning of 1980s.000t/a and produced AH-1 titanium pigment for chemical fibre. Granule of titanium dioxide rutile may fray the spinning nozzle and diffusion knife.300 10.8% 7. Chinese output of chemical fibre has been No. No. At present. And then domestic organizations made remarkable progress on the aspect of the production of titanium pigment for chemical fibre.000 288.1% 25.2% Consumption/t 220. Titanium pigment is considered as the best flatting material.

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

canal.Thermosetting plastic: such as amino-plastic. waterproof cloth and so on Pigmentation for plastic products: . ceiling. and so on Others: . in sudation material. enamel and glass. In the whole.The surface of all kinds of building structure. 82 .90% 13.400 358. phenolic-plastic. station and so on. bicycle). gloves.10% -35. The annual growth rate in 2004 and 2005 were respectively 14. antirust paint and shipping paint Pigmentation for rubber products: .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) 256.125 490. Pigmentation for cement goods and building structure as follows: .10% 14.125 in 2004.It is used to make rub piece and printing ink. plane. .2.2. hot-water bottle. . . ceramics chemicals and so on.2 Consumption situation of iron oxide pigment in China With many advantages. and so on.000 278.1%. ground. terra.100 312.All kinds of building materials.200 430. pillar. paper making.The inner tube of a tire (such as :automobile. spray paint.591 Growth rate of consumption (%) 8. stationery. The apparent consumption volume of iron oxide pigment produced in China reached 490.60% 25. baking finish. Pigmentation and antirust of paint and spray paint: . face brick.It is used to color and polish ceramic. such as wall. soft and hard PVC.591 in 2005 and 430. architecture and building.1% and 20.Thermo plastic: such as polystyrene plastic. iron oxide pigment is the most common color pigment.I-7. the consumption volume in the past several years increased year by year. rubber and plastic. blending paint. man-made marble and so on.00% 14.70% 20.000 350.Magnetic paint.30% 22. Table I-7.000 256.10% Application fields Iron oxide pigment is the most common color pigment extensively used in caoatings and paint.000 396. such as brick.

000 37.4% and 10.000 58.000 425. Figure I-7.000 5.800 * These quantities do not include the storage of the year.0% PlasticOther 3. Table I-7.000 Paper-making 22.8% Paper Rubber&Plasti 10.6% c 13.9% In 2005.000 433. Consumption by rubber & plastic and paper-making was respectively 13. it is mainly consumed in these fields including architectural materials (construction)..2-2 Consumption volume of iron oxide pigment in each application field (Unit: t) Year 2003 2004 2005 Coatings &paint 131. These two fields totally amounted to about 74.000 151. rubber and plastic and paper-making.7% of the consumption.3%.2. food stuff. Generally.0% 2.0% Furniture 10. architectural materials consumed about 150. amounting to 39. Figure I-7.000 46.2-2 The application proportion of iron oxide products used in the coatings industry Industrial 11.It is used to color ferric magnetism materials and feed.000 14.000 173.2-1 Consumption pattern of iron oxide pigment in China in 2005 Architectural material 34.000 56.3% Coating&Paint 39.2.000 150. Actual consumption of iron oxide pigment in 2005 was 433. and medicine.000 Architecture 115.4% Other 1.9% of its total output.2. Consumption in other fields amounted to 1. coatings & paint consumed about 173.000 168.0% Antitarnish 32.0% Auto 5. The development of coatings industry compels iron oxide pigment to grow.800t.000t iron oxide pigment.000t iron oxide pigment.000 Other 45.800 Total* 353.6% of the total.000 Rubber & plastic 40.0% Architectural 37. Coatings & painting and architecture are the two major application fields of iron oxide. coatings and paint.0% 83 . The application proportion of iron oxide products used in the coatings industry is shown in the following figure.

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

648 198. There will be a great demand for iron oxide pigment from coatings in the future.300.000 80.000 1.542. However.3 5.3 14. It can avoid color-floating or seeping due to its density. acid and light.3 -3.324 557 459 0.000.000 145 4827 545. there was a large quantity of storage as a result of the gap between the growth rate output and that of sales volume.000 99 227.000 478. Consumption trend of iron oxide pigment in China in future The sales volume of iron oxide pigment in China in 2005 was 570.000. iron oxide pigment comes across a new opportunity in its growth.9 51.4 -6.1 41.1 4.000 329.2-3 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 800.700 78 40 567.700 91 238.Iron oxide black is also very stable to alkaline.9 2004 700. By contrast with 2004.3 10. iron oxide black is an ideal pigment for concrete painting.8 1.000 312.000.000 430.140 517 416 0.7 10. Therefore.82 2.000 5.200 55.422 197. Table I-7.8 2.000 38. 85 .5 11. It disperses easily and has low oil absorption property.4 18.400 19.000t.200.7 540. with the rapid development of architecture industry.4 38 Year on year (%) 14. the output and sales volume of iron oxide pigment in 2005 both were increased in a certain degree.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.7 7.000 140 714 622.2 2. Recently. It’s estimated that the annual demand of iron oxide pigment in 2015 may reach 260.171.400 5.500 1. It’s estimated that the requirement will grow at a rate of 10%.2.

In Western Europe. of which 12. with 65% of its production used for concrete.8%. transaction volume is around 15.000-370. Western Europe and Japan.000-650. with In the world.000t/a iron oxide pigment is consumed in America.000.000t/a iron oxide pigment in America.000-85. is consumed all over the world. 86 .000t/a in Western Europe. amounting to 34% of the total consumption. Its architecture consumes most of iron oxide pigment. due to differences in economic development.000t/a used for painting. the rest 9% is other fields. Coatings is the second with a proportion of 33%.000-20.000-225. Then is the demand from coatings with the consumption volume about 150. From the 1990s on. which consumed 84% iron oxide pigment in the 1990s. plastics and rubber both amount to 5%. The second was coatings amounted to 6. Most iron oxide products are applied for architecture in the world. amounting to 60% of the total consumption. America consumes about 68. However. In Austria. iron oxide is mainly consumed in America.Consumption of iron oxide pigment in the international market About 1. consumption patterns of each country in the world are different.000t is imported. consumption pattern of iron oxide in Japan is opposite to that in Occident. The coatings industry consumes about 46. The global consumption in this field amounts to 53% of total iron oxide products. Similar to the situation in Europe. requirement for iron oxide pigment from architecture is the largest. The largest application field is magnetic materials. Architecture consumes only a small proportion of iron oxide pigment in Japan.000t/a iron oxide pigment 600. consumption custom. Architechture (building material) is the largest application field of iron oxide pigment in the world.000t/a.000t/a.000t/a iron oxide pigment for architecture. and 250. 200. Canada mainly applies iron oxide pigment for architecture.000-68.000-250. Nevertheless. and development of industries.

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

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

0%. including ink.000 40. thus domestic consumption of DPP pigment in auto industry was limited.0% 76.2.2.136 tonnes of organic pigment in 2005.5 Consumption situation of organic pigment in China As a large market of organic pigment. coatings.7% 2003 2004 2005 60.5-1 Consumption of organic pigment in China. textile and stationery and so on.238 70.0% -10.000 0 -7.0% Growth Rate 40.6% of the national pigment consumption. 15. coatings and plastic are the major fields. cosmetics.2.9% 20.5-2 Consumption pattern of organic pigment in China In 2005 Plastic 10.136 3. In Chinese finish coat for auto production mainly depended on imported ones. 89 .0% Other 7.7% Ink 67.0% - About DPP pigment DPP pigment is mainly used for industrial paint especially finish coat and refinishing paint for auto production.0% 30. ink.I-7. whose consumption of organic pigments in 2005 accounted for 67.0% 10.000 20. Table 1-7.0% 0.397 73.0% Organic pigment is applied in many fields. China consumed 73.0% 50. Figure 1-7. ink and plastic industry were the major consumption fields. about 4.8% Consumption/t 60.0% of the total organic pigments consumption respectively. 2003-2005 80.7% and 10.3% Coating 15. Among these.000 51.

15 II-2. Ltd.I-7. Ltd.... Ltd.000 300.000 600.. Ltd. Ltd. Tianjin Toyo Ink Co.17 II-2. Guangdong Huarun Paints Holdings Co. Yip's Ink & Chemicals Co. 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) 250.000 40. Ltd. Shanghai ICI Swire Paints (Shanghai) Co.000 20.000 40.000 40... Shandong Sun Paper Industry Joint Stock Co.000 15...200. Shanghai Cosco Kansai Paint Co.000 15.13 II-2. Ltd...000 27.000 20.2 II-2. Ltd. Zhejiang Yongzai Chemical Industry Co. Liaoning Zhongwang Group Koemmerling (Tianjin) High Polymer Molding Co.24 II-2. Hong Kong Hempel-Hai Hong (China) Ltd.000 40..000 1. Ltd.000 400. Ltd. Ltd.5 II-2.000 15.11 II-2.4 II-2. Ltd..3-1 Major end users of pigment in China No.000. Anhui Wuhu Conch Profiles and Science Co.. Ltd.26 II-2.000 15. Shandong Chenming Paper Industry Group Shandong Huatai Group Co. Chongqing Hongqi Paints Co.000 1.000 60. GuangDong Maydos Chemical Group Hunan Xiangjiang paint Group Co.10 II-2.6 II-2. Ltd.22 II-2. Ltd.19 II-2. Shanghai Coatings Co. Shanghai Peony Printing Ink Co.000.000 3. Ltd. Dalian Shide Plastics Industry Co.23 II-2.3 List of major end users Table 1-7.1 II-2..29 II-2.16 II-2. Shandong Lehua Group Co. Ltd. Ltd..20 II-2... Ltd.3 II-2. Hangzhou TOKA Ink Chemical Co. Golden East Paper (Jiangsu) Co.000 80.000 100..8 II-2.000 30. Shanghai DIC Ink Co. Ltd.18 II-2. Ltd..28 II-2.25 II-2.000 100. Shandong Changyu Group Co..000 80.000 600.14 II-2..12 II-2.000 80. II-2.000 N/A N/A 90 .000 2.30 Nippon Paint Co. Ltd.000. Beijing Meichao Finishing Material Co. Shanxi Taiyuan Coates Lorilleux Chemicals Ltd. Changzhou Guanghui Chemical Co.21 II-2.7 II-2..000 90.27 II-2..9 II-2. Ltd.

except for iron oxide. Specifically. Chinese pigment industry has some common problems as follows: . Most manufacturers can not export their organic pigments independently. Like lead. little titanium raw material is suitable for Chlorination Method. Instead. The majority of raw materials for pigment production are not reproducible resources such as mine resources or petroleum. 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. they depend on trading companies. near 20 titanium dioxide manufacturers were shut down in the past three years due to their poor measures of environmental protection. Besides the above. However. the biggest manufacturer of titanium pigment in the world. To treat the pollution costs much and imposes heavy burden on producers. owns the capacity of 1.000 tonnes more than the output in the same year. more than 90% of titanium ore is symbiotic mine in which the content of titanium dioxide is low and its components are complex. For example. This situation indicates that Chinese iron oxide excessively relies on export. different pigment has specific problems. its export volume is huge. Many high-class pigments still rely on importation. chrome is heavy metal and harmful to human bodies. .5 times as the export price. which reduces the foreign exchange earn through export. In 2005. Its production may cause serious environmental pollution. Market price can clearly indicate the difference between home-made and oversea pigments. The cost for environmental protection is going up swiftly. but only one company adopts Chlorination Method.The markup of raw materials and energy leads to the decreasing profit of pigment industry. although China is one of the countries that own the most abundant titanium resource. 91 .Each pigment manufacturer feels unprecedented pressure of environmental protection. 98 percent of capacity is adopting Sulfuric Acid Method. the capacity of iron oxide in China was 800. .Most pigments are middle and low-end products. the import prices of pigments are usually 1.000kt/a all of which adopts Chlorination Method. Another problem is that the technological structure of Chinese titanium pigment is unreasonable. As to iron oxide pigment. accounting for about 53% of annual output.000t/a. in international market. 180. As a matter of fact. For instance. In China. The overplus of capacity is another problem of iron oxide industry. the capacity of titanium pigment by Chlorination Method has occupied 60% of global capacity. Dupont Company.I-8 Problems existing in pigment industry At present. For instance. which results in low competitive strength in the global market.

the Committee Meeting of Chinese Coatings Industry Association concluded three agreements in 2006: Firstly. Now that production with equipment of low capacity causes serious pollution to environment. Some will be recombined or reformed in the near future.400t. most private manufacturers of iron oxide in China depend on export and they have no share in domestic market. governments and related organizations took a series of measures. To survive any suffering from the international market. Turnover of independent situation As calculated. the state issued a policy to forbid construction of installation with capacity below 5. On the other side. China is a large country exporting iron oxide. the import volume was 197. New projects short of legal condition won’t be approved or authorized. Chinese governmental issued a regulation in which titanium pigment projects with the capacity being no larger than 3.700t. the production volume of iron oxide pigment in China in 2005 was 622.500t/a will not be allowed. and the export volume reached 329. and are not competitive 92 . the government suggests these manufacturers improve their technology to meet the need of domestic demand. installations of small-scale capacity is not allowed from then on.300t. Iron oxide Agreement of Chinese Coatings Industry Association To ensure the fine development. Control of production volume On one side. to control production volume from the root. The State Department orders local governments strictly put the policy into effect. to turn over the situation of dependence on exporting. Titanium dioxide In July 2005. because the too small factories usually can not effectively treat wastes but lead to serious environmental pollution. At present. high cost and energy waste and so on.I-9 Governmental policies about pigment industry and their influence To solve effectively the problems in pigment industry. to strictly limit the installation construction of iron oxide production with capacity below 5. Control of production installation Early this year. secondly.000t/a. Unqualified manufacturers will be washed out or stopped. these manufacturers will be heavily shacked once the international demand experience change. Therefore. exported iron oxide products from China are mainly of medium and low grade. the third.000t/a for producing iron oxide.

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

500 1. reaching 276kt in 2010.1 General situation of Chinese pigment industry in the future At present. Meanwhile. the export volume of iron oxide. For a long time. only titanium pigment has a larger import volume than its export volume.500 Output/kt 2. China is turning to be a global production center and crucial sales market of pigment.540 kilo tonnes. the output of organic pigment will also increase with an average growth rate of 12%. However. the total output will be about 2. China has the output of titanium dioxide only second to the United States. lithopone and chrome pigments has been much higher than their import volume. Along with the increment of capacity & output of Chinese pigment and the improvement of quality. while the import volume decreased 9. ink. In the future. export of Chinese pigment will keep mighty increment. Figure I-10. the output of inorganic pigment in China will increase with the CAGR of 10%.000 2. Compared with the international market. China has become the largest producer of iron oxide. lithopone. In the coming five years. Chinese pigment industry will keep rapid development in the future.2%. Chinese market is more attractive to those large multinational pigment manufacturers who are transferring more capacity of pigment to China. and to 2010. paper making and rubber industries.000 500 2006 2007 2008 2009 2010 Inorganic pigments Organic pigments 94 .1-1 Output of pigment in China in the coming five years 3. Along with the swift development of downstream industries such as coatings. plastic. Here is the future production situation of pigment in China in the future. chrome pigment and organic pigment in the world. the export of Chinese pigments will keep continuous growing.000 1.I-10 Future forecast on pigment industry in the next five years I-10. the import & export situation of titanium pigment changed in 2005: its export volume increased much.

350kt/a. China has turned to be one of titanium pigment markets that have the biggest development potential. At present.200 Demand/kt 1. similar to the capacity of the United States (currently 1. Chinese demand for titanium pigment during 2005~2010 will increase with the CAGR of 11%.2 Future development of titanium pigment in China (1) Production scale will be enlarged gradually and the quality will be improved.I-10. designation or preparation. Moreover. in which the capacity of 70kt/a will be involved. The capacity of these projects (or plans) totals 250kt/a to 300kt/a. the demand for titanium pigment in China will reach 1. Foreign enterprises are accelerating their steps of entering Chinese market.268kt.400 1. Jiangsu. These projects (or plans) all adopt Sulfuric Acid Method and are located in Shanghai. two ultra-large type Chlorination-Method Plants will be established. besides two Chlorination-Method projects with the respective capacity of 200kt/a launched by Dupont and Astron. To 2010. the increasing speed of titanium dioxide rutile must be much faster than that of titanium dioxide anatase. On the basis of the publicized plans. during the “Tenth Five-year Plan”. there are also many native projects that are newly launched. Hubei and Sichuan. China will turn to be the real production center of titanium pigment in the world.2-1 Future demand for titanium pigment in China 1. The two plants include production base 95 . environmental protection. Future competition in Chinese titanium pigment industry will be harder. At the same time. Figure I-10. and the entering of foreign capital will change the industrial situation. and other industries. there are 4~5 plants that will be shut down due to factors including region. Along with the development of coatings. plastic. Hunan. at the same time. there are other 12~14 new projects (plans) on the stage of construction.500kt/a). If the above projects (or plans) can be implemented successfully.000 800 600 400 200 0 2006 2007 2008 2009 2010 (2) Competition in titanium pigment industry will be harder. Guangdong. Chinese capacity of titanium pigment in the end of the “Tenth Five-year Plan” will reach 1. ink. etc. paper making. Zhejiang. Titanium pigment industry of China will keep developing rapidly in the coming years.

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

All these will bring in the advantage of economic scale. It is certain that the top five manufacturers will own over 75% of the annual national output in the next five years.284t or so with the average annual growth rate of 13% from 2006 to 2010.147. The coastal regions become the production bases of iron oxide pigment for oversea enterprises whose production capacity reaches 120. I-10.In the future. Bayer of Germany. Oversea famous manufacturers of iron oxide pigment are optimistic about the Chinese market. 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 . China will probably become net exporting country of titanium pigment in the future. Fuyang City of Zhajiang Province. Production of iron oxide pigment in China will be more centralized and specialized in the future. In addition. accounting for 15% of the national capacity.000t/a. The output of iron oxide pigment in China in the past decade went up at an average annual growth rate about 14%. Figure I-10. The export volume of Chinese titanium pigment will keep increasing. 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 1.000 Output/kt 800 600 400 200 2006 2007 2008 2009 2010 As for its property and performance.200 1. both the capacity and output of titanium pigment in China will continuously increase. Rockwood and Elementis of England have already established solely-funded enterprises and joint ventures in developed coastal cities in China such as Shanghai City. Changshu City and Taicang City in Jiangsu Province and Shenzhen City. while titanium pigment imported in the mode of ordinary trade will gradually decrease. iron oxide pigment produced in China will be improved by new research and advanced technologies.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. It is suported that the output will still increase in the next five years.3-1 Future output of iron oxide pigment in China in the next five years 1. and the quality of product will be improved.

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