2014 ITA Europe The global titanium sponge...

TZMI.COM

2011 2014

T Z M I 2014 ITA Europe

The global titanium sponge

market

David McCoy

May 14 INTERNATIONAL TITANIUM ASSOCIATION: SORRENTO, ITALY © 2014 2

TZMI: A Global Consultancy

TZ Minerals International Pty Ltd

Level 2, 75 Canning Highway,

Victoria Park. WA 6100

Australia

+61 8 9359 6000

Web site: www.tzmi.com

Contact:

David McCoy

+61 437 049 757

[email protected]


About TZMI

TZ Minerals International (TZMI) is a global, independent consulting and publishing company which specialises in all

aspects of the mineral sands, titanium dioxide and coatings industries.

With a worldwide presence, including head office in Australia, and offices in the US, Africa and China, TZMI’s strength

in consulting services is a result of our extensive practical experience across all elements of the industries and from a

comprehensive and unique database, which has been built up over many years.

TZMI has proven expertise gained from our consultants having many years of direct operating experience in the

industry in chief executive, senior operational, analytical and marketing roles.

TZMI’s publications and data services provide additional benefit for our clients and ensure up-to-date, high-quality and

comprehensive data, analysis and information across the mineral sands, zircon, TiO2 pigment and titanium metal

industries.

To ensure TZMI provides accurate and up to date advice, TZMI maintains the most comprehensive and current

databases of industry production, market information and best practices in the world, including supply and demand

models, technical data and operating cost data for all major producers.


Two information sources to consider

TZMI.COM

Brief history of titanium sponge


1950s were the development boom years

Magnesium - Kroll

DuPont in Newport, DE - 18 ST pa (1948) up to 3,600 ST pa (1955). Closed 1962.

Nippon Electric Metallurgy Co in Chuo-ku, Tokyo – 1,800 lb pm (1951).

Titanium Metals Corp in Henderson, NV - 3,600 ST pa (1952)

Osaka Titanium in Amagasaki, Hygo Pref - 12 tpa (1952).

Nippon Soda Co in Minato-ku, Tokyo - 3 tonnes pm (1953).

Toho Titanium in Chigasaki, Kanagawa Pref – 240 tpa (1954).

Dow in Midland, MI - 100 ST pa pilot plant (1954).

ICI at Wilton, Yorkshire - 1,700 ST pa (1955).

McKechnie Bros Ltd in UK – 110 ST pa pilot plant (1955).

Cramet in Chattanooga, TN - 6,000 ST pa (1955). Closed in 1958.

Le Titanium Francais (JV) in La Praz, France (1956).

Zaporozhye, Ukraine (1956)

Sodium - Hunter

Electro-Metallurgical (Union Carbide) 7,500 ST in 1956

Mallory-Sharon Metals Corp in Ashtabula, OH 1956

ST denotes US unit of 1 ton = 2,000lb = 903 kg


1960s saw expansion into new countries

BTMK – Russia (1959)

Zunyi Titanium – China (1965)

UKTMP – Kazakhstan (1965)

Source: UKTMP

Source: Zunyi Titanium

Source: VSMPO

TZMI.COM

Chinese sponge sector


Growth in capacity far exceeds demand growth

China’s sponge capacity and production: 2010 – 2013

200

160

120

80

40

0

‘000 tonnes

+14.8%

+12.2%

2013

82

157

2012

82

145

2011

66

132

58

2010

104

Capacity Production

Source: TZMI database

© TZMI - NOT FOR REPRODUCTION


Output is dominated by a select number of producers

Breakdown of titanium sponge output: 2013

Jinzhou Huashen

11.0%

Chaoyang Jinda

11.0%

Pangang Titanium

3.9%

Others

10.5%

Chaoyang Baisheng

4.9%

Fushun Titanium Co Ltd

4.3%

Anshan Hailiang

4.3%

Zunyi Titanium

22.1%

Luoyang Sunrui Wanji

12.0%

Tangshan Tianhe

15.9%

Note: Producers with output less than 2,000 tonnes have been included in “Others” category.



Source: Pangang Titanium


+10,000 by 2015

Overcapacity, but still expanding!

Baoji Lixing Titanium 7,000 by 2015

+10,000 by 2015

+20,000 by 2015 +20,000 no schedule

+10,000 by 2015


Implications of China’s 12th Five Year Plan

Industry consolidation can be expected where smaller, less efficient plants will be phased out. Total sponge capacity in China could be reduced to around 100,000 tpa.

No new sponge projects (other than expansion of existing facilities) are expected to come online in the short term, unless there is a surge in domestic demand/China is able to penetrate the overseas market. According to the Plan,

sponge exports are targeted to increase to 30% of total production.

Improved plant utilisation and cost effectiveness with the rationalisation of the sector.

Source: Jinchuan Titanium


TiCl4 capacity and output distribution

Total capacity over 200,000 tpa

Total capacity between 100,000-200,000 tpa

Total capacity between 50,000-100,000 tpa

Total capacity less than 50,000 tpa

< 10,000

10,000 - 25,000

25,000 - 50,000

> 50,000

Scale of production (tpa)

Guangxi

Sichuan

Hebei

Fujian

Inner Mongolia Liaoning

Henan

Heilongjiang

Tianjin

Shandong

Jiangsu

Hubei

Gansu

Shanxi

Guizhou

A large proportion of TiCl4 facilities are concentrated in North Eastern provinces – Liaoning, Hebei and Shandong. However, it is understood that

many plants have been shut down due to bad market conditions and environmental regulations.


Feedstocks for TiCl4 in China

Heavily reduced slag (>91% TiO2) is used in molten-salt chlorinators and small diameter fluid-bed

chlorinators.

Some rutile, but supply of domestic rutile is limited – lack of resources.

Synthetic rutile made from reactive hard rock ilmenite from Panzhihua region

TZMI.COM

Non-Chinese sponge suppliers


US output increasing

US sponge production: 2005-2013

12,000

16,000

20,000

4,000

8,000

2005 2012 2011 2010 2013 2006 2007 2009 2008



Source: TIMET


Ust-Kamenogorsk Titan-Magnesium Kombinat

UKTMP Sponge production: 2005-2013

30,000

2011 2013 2012 2010 2007 2006 2009 2008 2005 Source: TZMI database



Zaporozhye Titanium & Magnesium Combine

ZTMC Sponge production: 2005-2013

10,000

2008 2013 2012 2011 2010 2009 2007 2006 2005 Source: TZMI database



Japan is a critical player

Japanese sponge production: 2005-2013

10,000

50,000

40,000

30,000

20,000

60,000

2006 2007 2005 2009 2012 2010 2013 2011 2008

Source: Osaka Titanium



Source: Toho Titanium


India now developing sponge technology


A new facility is in planning for Saudi Arabia


What’s hurting the global sponge industry?

Over capacity, particularly in China.

Value of sponge compared to scrap over the last 24 months

Improvement of buy-fly ratios and vertically integrated supply chains

0

5,000

10,000

15,000

20,000

25,000

30,000

Sponge stock

Q1

13

Scrap stock

Q3

13

Q3

12

Q1

12

Q3

11

Q1

11

Q3

10

Q1

10

Q3

09

Q1

09

Q3

08

Q1

08 Source: USGS

US quarter ending stocks: 2009-2013


TZMI multi-client work

Titanium Feedstock

Annual Review

Next edition Q2 2014

Mineral Sands Report

PDF report - published monthly

Global TiO2 Pigment Producers:

Comparative Cost & Profitability

Study

Updated Q1 2014

TiO2 Pigment

Annual Review


Zircon Annual Review


Titanium Metal

Annual Review


China Newsletters

PDF report - published monthly

TiO2 Market Insight

Published monthly

TZMI Data Reports

-TiO2 Feedstock Matrix – published annually

- Zircon Trade Matrix – published annually

- Zircon Quarter-to-Quarter published quarterly

TiO2 Pigment Industry Report

PDF report - monthly

TiO2 Pigment

Price Forecast

Published Quarterly

TZMI.COM

2011 2014

Global delivery of insight and expert advice

T Z M I

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2014 ITA Europe The global titanium sponge...

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