Lubei Chemical (600727.SH): The 60,000-ton/year chlorination titanium dioxide plant is expected to be put into operation before the end of the year. The future increase in the volume of titanium dioxide will not cause the price drop

Lubei Chemical (600727, stock bar) (600727.
SH) stated in the survey on August 10 that the company's 60,000 tons/year chlorination process titanium dioxide plant is expected to be put into normal production before the end of the year
.
Before the commissioning of the production system is completed and the long-term operation is completed, the company's high-titanium slag is mainly sourced from outsourcing.
At the same time, the company is also actively deploying upstream titanium ore, high-titanium slag and other raw materials
.
The 100,000 tons of sulfuric acid titanium dioxide currently under construction by the company is replaced by the relocation of the old production line in the original factory area of ​​Lubei Titanium.
After the completion of the relocation project, the company will have a 200,000 tons/year sulfuric acid titanium dioxide production line
.
The company currently has a production capacity of 300,000 tons of methane chloride per year, and will be combined with fluorine chemicals to produce tetrafluoroethylene (TFE) and silicone.
This project is expected to start construction at the end of 2021 or early 2022, and it can be completed in 2023 at the earliest
.
The three sets of methane chloride plants owned by the company are all independently designed and controlled equipment, making full use of the original facilities and reducing investment costs.
The company also has advantages in raw material costs, water and electricity, regional sales and freight
.
In the future, with the release of new capacity, a supply-demand relationship will be adjusted.
The price of titanium dioxide will gradually decrease.
For the company, although profitability will be affected to a certain extent, it will not lead to excessive profitability.
Pessimistic
.

The specific questions and answers are as follows:
Q: How is the chloride process titanium dioxide technology independently developed, and when is it expected to be industrialized?
Answer: Since 2006, the company’s controlling shareholder Lubei Group has begun to investigate the chlorination process of the chloride process titanium dioxide.
The production of titanium tetrachloride related technology is researched and developed, and a 30,000-ton boiling chlorination titanium tetrachloride device has been built, a group of titanium dioxide professional and technical personnel have been independently trained, and experts in the field of titanium dioxide have been hired through the introduction of talents.
Class-level team to ensure that the project is completed and put into production
.
The chlorination process titanium dioxide is mainly divided into three sections: chlorination, oxidation, and post-treatment.
The chlorination section has been studied by relevant technical teams for many years, and has exchanged and discussed with technical experts at home and abroad, and has mastered the technology of the chlorination section.

.
The oxidation section is the core of the chloride process titanium dioxide, but the core problem restricting the development of the chloride process during the research and development process is the scarring of the oxidation furnace
.
Xianghai Titanium Industry has been doing preliminary technical research since its establishment.
The company has done some technical exchanges and communication with domestic chlorination enterprises and technical experts through various channels
.
In recent years, the company has basically solved the problem of oxidation furnace scarring through small tests in the laboratory, and can achieve long-term stable operation of the oxidation section
.
Xianghai Company has applied for the patent of salt-adding scar removal and air curtain anti-scarring technology, which has been accepted by the State Intellectual Property Office and solved the core technology of the oxidation section
.
The post-treatment section is basically the same as that of the sulfuric acid method, and we have already mastered it
.
The plant with an annual output of 60,000 tons of chlorinated titanium dioxide is expected to be completed and put into operation before the end of this year
.

Question: Is the 100,000 tons of sulfuric acid titanium dioxide planned by the company replaced with new production capacity?
Answer: The 100,000 tons of sulfuric acid titanium dioxide currently under construction by the company is replaced by the relocation of the old production line in the original factory area of ​​Lubei Titanium Industry
.
After the completion of the relocation project, the company will have a production line of 200,000 tons/year sulfuric acid titanium dioxide
.

Question: Will the expected new production capacity of titanium dioxide in the future have an impact on the existing industry structure? How do you view the evolution and integration of the competition pattern of the titanium dioxide industry in the next 5-10 years?
Answer: The current capacity of the titanium dioxide industry is relatively dispersed and has existed for many years For enterprises with a production capacity of less than 100,000 tons or even lower, with the further restrictions of national environmental protection policies and energy consumption indicators and the governance of the Yangtze and Yellow River basins, small titanium dioxide enterprises will be gradually eliminated or merged, and the entry barrier for the titanium dioxide industry will be greatly increased.
Increase, as the leading companies further expand production, the industry concentration will continue to increase
.

Question: It is understood that the company will start production of chlorinated titanium dioxide in the near future.
What is the plan in terms of capacity ramping and raw material procurement?
Answer: The company's 60,000 tons/year chlorinated titanium dioxide plant is expected to be realized before the end of the year Normal production of the whole process
.
Before the commissioning of the production system is completed and the long-term operation is completed, the company's high-titanium slag is mainly sourced from outsourcing.
At the same time, the company is also actively deploying upstream titanium ore, high-titanium slag and other raw materials
.

Question: The company's methane chloride production scale is also large.
What are the leading advantages in cost and technology? Where is the expected growth point in the future?
Answer: The company currently has 300,000 tons/year methane chloride production capacity.
Fluorochemicals are combined to produce tetrafluoroethylene (TFE) and silicone.
This project is expected to start construction at the end of 2021 or early 2022, and it can be completed in 2023 at the earliest
.
The three sets of methane chloride plants owned by the company are all independently designed and controlled equipment, making full use of the original facilities and reducing investment costs
.
The company also has advantages in raw material costs, water and electricity, regional sales and freight
.
Jinyi Technology and Jinsheng Chemical provide a stable supply of chlorine to avoid the impact of price increases caused by the epidemic; the water and electricity in the park also has certain cost advantages with peers; the company also has regional sales advantages.
Jinyi Technology is located in Guangxi The Baise area has accelerated the construction of transportation and ports, which has allowed Jinyi Technology’s methane chloride sales area to spread to the entire South China and Southeast Asia, which is in line with the company’s original customers; the company is close to the downstream demand in the South China market, and has a timeliness of freight and environmental protection.
Advantage
.
In addition, the company's methane chloride raw material methanol relies on outsourcing, and the chlorine gas is supplied by the enterprises in the park, and the chlorine gas price has an advantage
.
The future growth point of methane chloride lies in capacity expansion and differentiated layout
.
In terms of capacity expansion, methane chloride products belong to the national restricted capacity, which requires an annual capacity of more than 100,000 to enter
.
The industry's production reduction trend this year is obvious, and small production capacity is shut down, which expands the company's profit margin against the background of the continuous improvement of the chemical industry
.
In terms of differentiated layout, the company also actively introduces professional technical talents to open up new development directions
.

Question: At present, titanium ore resources are in short supply.
Without self-provided titanium ore, as the production capacity of foreign titanium dioxide recovers, how will companies face the challenge of the downward price of titanium dioxide?
Answer: The titanium dioxide industry is currently very polarized.
The leading companies have a high market share and have certain pricing power.
Small-capacity companies will gradually be shut down or eliminated
.
The company is currently actively deploying upstream raw materials.
On the other hand, the company is actively negotiating and communicating with large domestic and foreign suppliers, and is committed to reaching long-term strategic partnerships
.
With the titanium dioxide industry