In November I attended three important industry events in Shanghai – the TZMI Congress, CHINACOAT and the LANXESS Pigments Symposium. I returned home with a clearer understanding of the inorganic pigments market, how China is responding to its slowing economy and the environmental problems it faces, and strategies that suppliers are forming to take on these trends.
The TZMI Congress had 250 delegates from 33 countries in attendance across the three days. The program was split into TiO2 pigment and end-uses (Day 1), titanium feedstocks and zircon (Day 2) and a China focus on Day 3. TZMI Inc.’s Eric Bender, Vice President, Americas, offered a market review. He noted that TiO2 continues to experience historically low prices, driven by oversupply and weak demand. TZMI forecasts that it will take a few years (perhaps 2017) to bring demand back up to the trend line.
Four TiO2 industry leaders spoke at the Congress and offered their perspectives on these challenges. All of them agreed that the industry will get back to the growth and demand it saw in earlier peak years. E. Bryan Snell, President, Titanium Technologies, The Chemours Co., noted that TiO2 is at the heart of many critical applications, and as the global population continues to increase, demand will increase as well. Simon Turner, President, Pigments and Additives Division, Huntsman Corp., stated that when you have this much distress and challenge, you can expect big change. And David Robb, Managing Director and CEO, Iluka Resources Ltd., noted that while the industry suffers from cash flow pressure, ownership uncertainties, balance sheet distress, asset quality concerns and leadership issues, this status will not continue, as there will be change in response to these issues. He also stated that the TiO2 industry is overdue for a “technology injection.” Tan Ruiqing, Deputy Chairman, Henan Billions Chemicals Co. Ltd., focused on the China market and discussed the need to develop safe, environmentally friendly manufacturing practices in order to be a sustainable TiO2 producer.
Environment-friendly production was a big topic at the LANXESS Symposium. You can read my full article about the symposium and the company’s new iron oxide plant in Ningbo, China, on pages 24-27 of this issue. The event was a great opportunity to learn about the current developments in the China pigment market, the latest government environmental regulations and a brand new sustainable iron oxide production process.
The slowing China economy was a common discussion at CHINACOAT. I spoke with Ed Sparks, Regional Director, Asia Pacific Titanium Technologies, and Jim Li, Managing Director, Greater China Titanium Technologies, at The Chemours Co. Li stated that there is no doubt that China is in a period of transition, but is still growing – just not at the double-digit growth pace of recent years. He explained that the Chinese government has recently launched a project called “China Manufacturing 2025” in an effort to drive the focus of manufacturing from quantity to quality. “This is a very clear direction for our country – to develop the quality of products. This will really bring new opportunities to us,” he said.
Sparks stated that it pays to take the long view when looking at the coatings industry in China. As consumers have more disposable income, their expectations of what they can get out of coatings are going to increase. Chemours feels that there are many good trends with the growing middle class in China that offer the coatings industry a very bright future. “We’re looking at 2015 as a bump in the road that’s going to lead to a bigger, more-profitable, higher-quality coatings industry in China,” he said.
Many new quality products were introduced at CHINACOAT. You can find a review of some of these technologies, as well as stats from the show and its conference on pages 46-47 in the print edition or online here.