China produces a large amount of gypsum as a by-product during industrial production. The statistics from the Gypsum Association of China Building Materials Federation (GAC) reveal that about 180 million tonnes of desulfurized gypsum and phosphogypsum are generated by the thermal power industry, the steel industry and the phosphate fertilizer industry every year. Desulfurized gypsum and phosphogypsum take up 85% of the total amount of industrial by-product gypsum. As of the end of 2013, accumulatively about 400 million tonnes of phosphogypsum and 180 million tonnes of desulfurized gypsum have built up. This industrial by-product is usually used to produce cement retarder, plasterboard and other products.

Main applications of gypsum in China

Source: GAC & CCM

It is also worth noting that the average utilization rate of overall gypsum is under 50%, with phosphogypsum ranking the bottom. According to GAC's data for 2013, only 27.4% of phosphogypsum was utilized in 2013.

As CCM has summarized, the following aspects contribute to the current low utilization rate of gypsum.

Firstly, the government's concession policy is not extensive. The large number of chemical plants and power plants which do not have the capability to further process gypsum are unable to access the value-added tax concession when they simply process gypsum into plaster powder for selling. As a consequence, they do not have any incentive to recycle the by-products. 

The Catalogue of Resources for Comprehensive Utilization Entitling Enterprises to Income Tax Preferences (2008) which came into effect from 1 Jan., 2008 establishes that the income tax is calculated on the basis of 90% of the total revenue of the year of production. The income tax applies to the production of bricks (tiles), blocks, wallboards, gypsum products and commercial fly ashes with more than 70% coal gangue, fly ash, desulfurized gypsum or phosphogypsum as the raw material.

In addition, according to the relating stipulations of the Notice about Policies regarding the Value Added Tax on Products Made through Comprehensive Utilization of Resources and Other Products, which was jointly issued by the Ministry of Finance and State Administration of Taxation in 2008, selling specified construction products made from raw materials with at least 30% waste residues including phosphogypsum and sulfurgypsum can enjoy the exemption to the value-added tax payment. Cement clinkers produced with rotary kiln technology and raw materials that contain no less than 30% waste residues including phosphogypsum and sulfurgypsum can enjoy the immediate value-added tax refund policy. Finally, new wall materials including gypsum blocks, hollow core slabs and plasterboards which are made from phosphogypsum can enjoy the immediate 50% value-added tax refund policy.

Secondly, the increases to the treatment cost places gypsum in a disadvantageous position in the market. Yang Zaiying, the Secretary General of GAC, says that by-product gypsum, especially phosphogypsum, contains deleterious substances like sulphur and fluorine, which needs pre-processing for the development of high quality new construction materials. Its comprehensive utilization requires a large amount of technical transformation capital from enterprises, and this raised the cost of gypsum utilization indirectly. Besides, although the production of phosphogypsum in Hubei, Yunnan, Guizhou, Shandong and Anhui provinces occupied 78% of the total production volume in China, the companies which are located in Yunnan Province or Guizhou Province are quite remote and are far away from their consumer markets, resulting in a continuously low gypsum comprehensive utilization rate.

Thirdly, the current narrow utilization range of gypsum is another negative factor. In terms of the utilization of industrial by-product gypsum, the gypsum product that people are familiar with is only useful for low price construction materials such as construction used plaster powder, plasterboards or gypsum blocks. However, large enterprises avoid these materials because of the low profits. In contrast, gypsum mold is a profitable gypsum product, but only a limited amount is used. However, it has attracted an increasing number of manufacturers, leading to a severe duplication of products and gradual market saturation.

CCM believes that focus should be on the following aspects in order to improve the utilization of industrial by-product gypsum.

It is important to maintain the current utilization mode and to develop new modes. The Secretary General of GAC, Yang Zaiing, once said the demand for gypsum had been rising with the increasing production amount of cement in China. The rapid development of real estate results in the increasing demand for construction materials including cement, gypsum and ceramics. President Tang of Jiangsu Efful New Material Science and Technology Co., Ltd. indicated that 80% of American residences used gypsum products as partition materials, and gypsum blocks took up over 40% of the inner wall market in western European countries like Germany and France. Thus, there are promising prospects for industrial by-product gypsum utilization in China.

Currently, the utilization of industrial by-product gypsum is still relatively onefold, with focus being laid on construction materials. New utilization modes therefore need to be developed. Professor Ying of No.1 Industrial Design Institute of Jiangsu Province pointed out that the utilization of gypsum should move beyond the existing mode of "gypsum equals to construction material" and new technologies need to be adopted to improve the utilization of industrial by-product gypsum. New modes and technologies are necessary to achieve larger profits and the large scale utilization and industrial development of by-product gypsum. Examples of new modes include the production of high value-added chemical products such as gypsum whiskers.

Another step is to expand the concession range covered by the government's policy. The current concession policy excludes many companies that have no capability to further process industrial by-product gypsum. These companies have little choice but to abandon the utilization of industrial by-product gypsum because of the higher production costs.

Director Wang of Technology Committee of the National Environmental Protection and Resourceful Utilization of Industrial By-product Gypsum Program Technology (Nanjing) Center indicated that restrictions on the mining of natural gypsum needed to be imposed in accordance with the law in extensive production regions of industrial by-product gypsum. Also, the costs of natural gypsum mining and the build up of industrial by-product gypsum must be increased in order to improve the recycling of industrial by-product gypsum. 

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

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