Sichuan Lomon shuts down TiO2 plant after quake

14 May 2008 11:57  [Source: ICIS news]

SINGAPORE (ICIS news)--Leading Chinese titanium dioxide (TiO2) producer Sichuan Lomon has shut down its TiO2 plant in Mianzhu, located very close to the recent earthquake, as a precautionary measure, a company source said on Wednesday.

It was not yet clear when the 80,000 tonne/year facility would restart, the source added.

“The company has very high inventories of TiO2, so availability is not a problem,” the source said.

However, transportation out of Sichuan has been disrupted due to the earthquake, which would make it hard to supply to other regions in China, he added.

Suppliers and traders said that the shutdown at the Sichuan Lomon plant would tighten supply of TiO2 in China.

China has capacity of around 1m tonnes/year of TiO2, but several plants are operating at below their nameplate capacities, with Sichuan Lomon producing only around 68,000 tonnes/year of TiO2, the company source said.

With demand in excess of 800,000 tonnes/year in 2007, and exports out of China at 155,000 tonnes/year, the demand-supply balance in China is balanced to tight, said a supplier.

“So even the smallest production disruption can tilt the balance into tightness, which is likely to happen now, especially with demand growth for TiO2 forecast at 15% in 2008,” it said.

Suppliers said domestic prices were likely to rise due to the supply disruption.

Imported material in the domestic market in China was stable-to-firm at CNY21,300-22,000/tonne ($3,047-3,147/tonne) ex-warehouse (EXWH) in the eastern region for the R902 grade and at CNY20,300-21,500/tonne EXWH and CNY20,300-21,500/tonne EXWH respectively for the Tiona595 and R930 grades, according to Chemease.

($1 = CNY6.99)

Lynn Du contributed to this article
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By: Prema Viswanathan
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