According to data from the General Administration of Customs of the People’s
Republic of China (China Customs), China imported 1,880,408 tonnes of ilmenite in 2015, a decline of 7.19% year on year; import value reached USD274 million
with a YoY decrease of 34.40%.
The decline in import volume from Australia, Mozambique and Vietnam combined
was as high as 422,986 tonnes, contributing the most to the fall of the total
import volume. The import volume from Australia in particular dropped by 39.61%
YoY to 305,121 tonnes; that from Mozambique fell by 53.76% YoY to 129,434
tonnes and that from Vietnam decreased by 36.97% YoY to 123,412 tonnes.
India, Kenya and Russia were the few countries that saw an increase in export
volumes of ilmenite to China in 2015.
Out of these, India ranked first with an
export volume of 508,033 tonnes of ilmenite to China, increasing significantly
by 61.40% YoY; Kenya came in second after India with an export volume of
386,160 tonnes and a dramatic YoY increase of 113.55%, being the biggest dark horse;
it is noteworthy that there were no customs records regarding ilmenite which
Kenya exported to China in 2013; Russia, with a YoY increase of 30.54% to
205,676 tonnes, ranked fourth.
China's imports of ilmenite, 2013-2015
Source: CCM & China Customs
China's import origins of ilmenite, 2014
Source: CCM & China Customs
China's import origins of ilmenite, 2015
Source: CCM & China Customs
CCM noticed that China’s import volumes of ilmenite from traditional import
origins, such as Australia and Vietnam, all fell significantly while market
shares of ilmenite from India and African countries grew explosively in 2015.
According to CCM, this can be attributed to the following two factors.
1. Significant drop in ilmenite price has led to sharp decline in output of
high grade ilmenite
In 2015, the average import price of ilmenite in China fell by 29.32% to
USD145.57/ts, greatly compressing the profit margins of high grade ilmenite manufacturers,
and as a result, many international manufacturers chose to stop production and
stockpile products instead of having to sell their products below cost.
Take Ore
A (TiO2 content > 50%) from Vietnam as example, manufacturers will not
suffer losses, but only if the FOB price of ilmenite remains above USD125/t.
Since dropping from USD200/t in early 2014 to USD125/t in early 2015, the FOB
export price of Ore A has remained low , as has the export volume.
In contrast, manufacturers in Kenya, Senegal, etc. are still getting a good
enough profit margin from low grade ilmenite to contend with depressed market
conditions caused by low mining costs (costs from labor force and environmental
protection, etc.). Meanwhile, the retreat of Australian and Vietnamese high
grade ilmenite manufacturers from the Chinese market has provided a good
opportunity for low grade ilmenite manufacturers in India and African
countries.
2. Geopolitics factors
Taking advantage of the huge global economic downturn, African countries that
have an abundance of natural mineral resources are hoping to improve local
economic conditions by relaxing export limitations on their ore resources. Base
Resources Limited (major ilmenite manufacture in Kenya) and Kenmare Resources
plc (major ilmenite manufacture in Mozambique) have both increased their
exports of ilmenite to China.
However, the Vietnamese government sticks to its
resource protection policy and, with an export tariff of as high as 20%, makes
Vietnam’s ilmenite manufacturers suffer higher export costs compared with
Kenyan and Indian manufacturers.
CCM has predicted that in 2016 China’s ilmenite import market will continue to
be depressed and African markets will still be the ones which benefit most.
That’s mainly because it will be hard for the international TiO2 market to
recover in 2016 under pressure from the economic downturn.
As long as demand
for ilmenite from downstream markets stagnates, traditional high grade ilmenite
exporters from Australia and Vietnam will reap low profits and at the same
time, African manufacturers that are eager to explore markets and have obvious
costs advantages will take this opportunity to seize market share in China.
CCM learned from Base Resources Limited that the company will remain at an
output of about 430,000 tonnes of ilmenite in 2016 and will continue to explore
China’s market making use of its powerful advantage in price.
In addition,
Kenmare Resources plc saw a significant YoY decrease in its export volume in
2015 due to a miners' strike. It is believed that the ilmenite export volume
from Mozambique will greatly increase in the future when the company resumes
normal production.
This article comes from Titanium Dioxide China Monthly Report 1602, CCM
About CCM:
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ingredients and life science markets. Founded in 2001, CCM offers a range of
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and customized market research reports. Our clients include Monsanto, DuPont,
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Tag: ilmenite TiO2