Yao Hengping, Secretary General of titanium dioxide branch of China Coatings Industry Association: The impact of the spread of the epidemic on the development of titanium dioxide industry and recommendations.

Throughout the year titanium dioxide market, by the global effective demand for titanium dioxide seriously inadequate and some of the domestic new capacity into production of the comprehensive impact of the titanium dioxide market demand will remain depressed, and therefore not only the early enterprise price increases difficult to cash in, the price of later products will be further lower.
April 7, 2020, the "Titanium Dioxide Market Change and Response Plan under the Globalization of the 2020 Epidemic - The First Titanium White Powder Industry Salon" was held in China, sponsored by China Titanium White Powder Network and co-sponsored by Yan Titanium Cloud Merchants. The following is the report of Yao Hengping, Secretary General of the Branch of The China Coating Industry Association, on the impact of the spread of the epidemic on the development of the titanium dioxide industry

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Good afternoon, friends, very happy to participate in today's salon activities, and on our common concern to exchange and learn, I exchange today's topic is "the spread of the epidemic on the development of the titanium dioxide industry impact and recommendations", counted as a brick-throwing jade. The
1, 2019 new crown outbreak is profoundly affecting the fate of mankind
just this past few months, the new crown outbreak, as a major event in the process of human development, has affected and will continue to affect and change the entire world at a deeper level.
First of all, in terms of global situation, according to foreign media reports, real-time global statistics show that as of April 7, the cumulative number of confirmed cases of neo-crown pneumonia has exceeded 1.3 million, reaching 1.345 million, the cumulative number of deaths more than 74,500, of which the United States confirmed cases have exceeded 366,000, the death toll reached 10,783; The global pandemic of this outbreak has an economic impact on both supply and demand, both on the demand side and on the supply side. The global impact of the outbreak has been analyzed and predicted by many experts. Most argue that in the next three quarters of 2020, and in the next year or two, only the Great Depression of 1929 can match it. Among them, Jin Jinyu, a tenured professor at the London School of Economics and Political Science, is more pessimistic about the current outbreak: "We may be facing a Great Depression, not a recession, as was the case in 1931, rather than 2009, which would have a much greater impact on global GDP than 5%." According to his analysis, if the impact of the recession on the economy is 5%, then the impact of the recession is even 50%, we do not want this situation. Former U.S. Secretary of State Henry Kissinger said in a recent article that "the world will no longer be the same after the new coronavirus, the attack on human health is temporary, but his political and economic impact may last for generations."
looking back at China, although the beginning of the new crown epidemic has passed, but the future development trend is not optimistic. As of 2400 hours on April 6, there were 83,071 confirmed cases in China and 2,264 cases are still being treated, including 211 cases of severe illness, 14,500 close contacts still under observation and 1033 cases of asymptomatic infection. With the rapid spread of foreign outbreaks, normal international personnel exchanges, China's imported cases will continue to increase the situation, coupled with the resumption of domestic work, a large number of people flow, will further increase the risk of the spread of the epidemic. On the impact of the domestic economy, some media expect China's economic growth rate in the first quarter to be between negative 6-10%, the second quarter growth rate or maintain at about 1%, the annual growth rate mainly depends on the third and fourth quarters, and mainly rely on investment-led rebound. A more optimistic estimate is that if year-on-year growth in the third and fourth quarters were to reach 10%, the full-year growth rate could reach 3-4%. Compared with the forecast at the beginning of the year, China's economic growth rate in 2019 is 6.1%, some institutions forecast that 2020 GDP can maintain 6% growth rate, from the current situation, I agree with the annual growth rate of 3-4%. Therefore, according to the current development trend, I think the new crown epidemic has been and in the long time to come, the global economy, including our titanium dioxide manufacturing industry and its upstream and downstream enterprises have a greater negative impact. Deep in our hearts, in spite of the pain, must be faced directly.
, the impact of the epidemic on the titanium dioxide industry in 2020
2.1, 2019 titanium dioxide industry development review
steady growth in production, production and sales of basic balance. According to incomplete statistics, in 2019, the country has a production capacity of 3.82 million tons of titanium dioxide, maintaining normal production and operation of the whole process-oriented enterprises have 41, comprehensive output of 3.1815 million tons, the average driving rate of the plant 83.3%, the output increased by 7.69% YoY. Among them, the production of redstone-type titanium dioxide was 2.545 million tons, accounting for 80.00% of the total output, and the sharp titanium type was 518.3 million tons, accounting for 16.30% of the total output. The total output of titanium dioxide chloride was 208,594 tons, exceeding 200,000 tons for the first time. The production of titanium dioxide by chlorination has accounted for 8.20% of the production of redstone type.
in product sales, domestic and foreign sales, to achieve the overall production and sales balance. According to customs statistics, China's total exports of titanium dioxide in 2019 amounted to 1.003 million tons, accounting for 31.53 percent of the total output of titanium dioxide. Among them, the top three export enterprises Longyu Lilian, China Nuclear Titanium White, Jinan Yuxing export volume accounted for 48% of the total export volume.
supply and demand balance of titanium ore, price stability slightly increased. With the increase of domestic titanium ore production, the import volume of titanium ore decreased last year, and the overall balance between supply and demand was maintained. According to the existing titanium dioxide production capacity, China needs to consume 8 million tons of titanium ore/titanium essence each year (in terms of 48% titanium dioxide content), in 2019 the actual import of titanium ore about 2.45 million tons, accounting for 30% of the total consumption. At the same time, the price of titanium ore for the whole year fluctuated narrowly, but remained relatively stable.
outstanding integrated management, good performance. "Without environmental protection, there will be no output; Continuing the practice of the previous year, enterprises in the industry based on technological innovation, scientific development, according to local conditions to take the road of joint production development, and achieved outstanding results. In the development of the industrial chain, enterprises in accordance with their own conditions and surrounding resources and environmental characteristics, and gradually create conditions to take the joint production route, many enterprises initially achieved the reduction, reuse, resource-based cycle development goals. A number of backbone enterprises using local resources have launched sulfur -titanium, sulfur-phosphorus-titanium, sulfur-ammonium-titanium, sulfur-iron-titanium-iron-calcium, sulfur-titanium-gypsum-cement and other characteristics of the green industrial chain. Not only passed the local management assessment, but also for the enterprise to continue to operate, increase the efficiency of the foundation.
challenges to the development of titanium dioxide industry in 2.2 and 2020
the impact of the epidemic and low effective output. Due to the combined effects of the epidemic and the Spring Festival holiday, the effective output of enterprises in the first quarter of 2020 was lower than that of the same period last year. In early March, we conducted a questionnaire survey of nearly 26 enterprises, predicting that the output of titanium dioxide powder in the first quarter of this year will decrease by about 20% compared with the same period (down 30% in February), and that production will resume in March, and that production will not be fully met.
effective demand is insufficient, production and marketing balance is difficult. Also affected by the outbreak, sales of enterprise products that had not been fully or partially produced in the previous period fell far short of expectations. Main performance: Domestic sales, January and February demand significantly reduced, although from March, domestic demand will gradually recover, but due to macroeconomic weakness, whether it can continue to be worthy of attention. In terms of foreign trade, the decrease in orders in January and February coupled with poor transportation of the epidemic, the country's total import and export volume of goods decreased by 9.6% YoY, of which exports fell by 15.9% YoY; Preliminary estimates of domestic demand sales fell by more than 20% and foreign trade sales decreased by 25%-30%.
supply and demand determine the price, corporate profits fall. Throughout the year titanium dioxide market, by the global effective demand for titanium dioxide seriously inadequate and some of the domestic new capacity into production of the comprehensive impact of the titanium dioxide market demand will remain depressed, and therefore not only the early enterprise price increases difficult to cash in, the price of later products will be further lower. The end result is that the industry as a whole will see a decline in earnings this year. At the same time, the liquidity of corporate assets will also be affected by a relatively large, for which we should be prepared.
capacity continues to expand and raw materials supply is tight. It is worth noting that, affected by the epidemic, the global spread, titanium dioxide demand decline at the same time, in 2020 China will plan to add nearly 1 million tons of sulfuric acid titanium dioxide production capacity, of which, some of the production capacity is scheduled to be completed and put into operation within the year. If the supply and demand of titanium raw materials is basically balanced at this stage, then the project planned to start production this year will need to add 60-1 million tons of titanium demand (including chlorination production increase with titanium ore). Although China imported 549,600 tons of titanium ore in January-February 2020, the year-on-year increase was 38.94 percent. Will it last? From now on, tight supplies of raw materials may become the new normal! Imports of raw materials decreased and procurement prices rose. According to relevant information and reports, along with the expansion of titanium dioxide production capacity of sulfuric acid, China will also add hundreds of thousands of tons of chlorinated titanium dioxide production capacity in the next few years, chlorinated titanium dioxide process needs to consume high-quality titanium ore / titanium slag, but it is difficult to supply raw materials, foreign companies do not seem to have plans to add capacity, on the contrary, due to the impact of the epidemic recently some foreign companies have planned to stop production. Based on this analysis, in the long run, China's titanium ore / titanium slag prices will steadily rise, the results are bound to have an impact on the quality of operations and business performance of enterprises.
3, Countermeasures and Recommendations
The new crown epidemic is still continuing, countries around the world are working together to take measures to curb the epidemic, reduce the impact, and strive to restore economic and social order as soon as possible. So far, countries have introduced stability and economic stimulus measures total investment of up to tens of billions of yuan, combined with the functional characteristics of titanium dioxide products and its positive correlation with socio-economic development, we have reason to be confident about the future development of the industry. Around the theme of today's meeting, I would like to put forward the following suggestions for the development of China's titanium dioxide industry in 2020 and the future.
to do the same, actively as a competitive initiative, overcome difficulties and seek development
on the right: seriously understand, and actively strive to enjoy more policy dividends. Since this year, governments at all levels have formulated and introduced a number of preferential policies to stimulate economic development, including phased public consumption relief, tax and fee suspension, financial support and so on. At the same time, up and down the combination, through local governments, associations and organizations continue to put forward new support measures to the central government. Recently, the Titanium White Powder Association has submitted three reports to the relevant central ministries, requesting the introduction of a stable industry development policy. In addition to the reported policy measures, including the resumption of licensed titanium dioxide processing trade (formerly the Ministry of Trade, the General Administration of Customs No. 90 of 2014 announced titanium ore /titanium fine ore, titanium dioxide as the processing trade prohibited import and export catalogue), a moderate reduction of titanium dioxide products export value-added tax to promote the export of titanium dioxide. Combined with all titanium dioxide enterprises this year must apply for, exchange sewage permit requirements, we learn from the Shandong Eco-environment Department's practice, in the name of the Tu Association to the provincial/ municipal ecological environment department (bureau) formally sent a letter, recommended that all places in the formulation /revision of local air pollution emission standards, titanium white powder calcined kiln single column, and calcined exhaust emissions benchmark oxygen content index from the general industrial kiln 9% to 15%, reduce the cost of enterprise pollution reduction. We hope that we will work together to find more policy space to support the development of the industry.
: Always pay attention to the situation of domestic and foreign downstream resumption of work, close contact with end-users and distributors, especially emerging economies and related enterprises, form a community of interests, strive for more orders, work together to tide over difficulties. At the same time, based on the long-term in advance to do a good job of raw material organization and procurement plans, grasp the initiative of volume price control, to ensure the current production and sustainable development of raw materials demand. Every effort to stabilize the supply of raw materials, not only for the 2020 industry operation has an impact, but also for China's larger-scale titanium dioxide production capacity release of the inevitable requirements.
: Give full play to the advantages of the system and mechanism, highlight scientific and technological progress and investment in technological reform, focus on quality improvement, product research and development, energy conservation and consumption reduction, recycling, cost reduction, improve services and other aspects of in-depth practice of internal skills, improve the comprehensive competitiveness of enterprises and the entire industry in the global market. I think the impact of the epidemic, short-term lack of demand is our enterprises to seek development, grasp technical reform, get rid of bottlenecks, a good opportunity to step up. As far as the titanium dioxide industry is concerned, we should seriously study the changing trend of market demand in order to stabilize and improve the production and sales rate of titanium dioxide target, reasonably control the production load of existing devices, reasonably plan the production plan of new construction and technical transformation and expansion projects, and avoid the dust of the global oil and crude oil market. At the same time, speed up the declaration and certification of titanium dioxide green products and enterprise green factories, for the future business to create better living and development conditions. In the face of the Great Recession and severe market challenges, we must have new judgments, new ideas and new ways of acting.
As we all know, the development of China's titanium dioxide industry in 2020 is full of unprecedented challenges, but with the advantages of the national political system, there are new infrastructure projects and urban old, old community upgrading and transformation of huge investment brought about by strong domestic demand and the past decade or so of industry development experience and other foundation support, with the joint efforts of the industry upstream and downstream enterprises, we will be able to withstand the test, overcome difficulties, overcome difficulties and obstacles, and thus lay a more solid foundation for future development.
hope that we will strengthen communication and exchanges, timely share the latest information on macroeconomic policies and industry development, and promote the common progress of China's titanium dioxide corps.
wish today's event a complete success, thank you very much.
(China Powder Network Editor's Collation /Early End)
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