Sichuan Lomon to restart TiO2 plant by year-end

13 June 2008 09:08  [Source: ICIS news]

SINGAPORE (ICIS news)--Leading Chinese titanium dioxide (TiO2) producer Sichuan Lomon is not expected to restart its TiO2 plant in Mianzhu, located very close to the epicentre of the recent earthquake, until the end of the year, a company source said on Friday.

The 80,000 tonne/year plant was shut down in May as a precautionary measure.

"Although our facilities were not directly struck by the earthquake, it’s impossible for us to restart them in the short term," the source said. "Some of the infrastructure such as roads, which were damaged by the earthquake, need to be rebuilt."

Transportation out of Sichuan has been disrupted due to the earthquake, which would make it hard to supply to other regions in China, the source said.

However, Chongqing Xinhua’s 18,000 tonne/year TiO2 plant in Chongqing, restarted early this month, as it transports its product along the Yangtze river, and not by road, a source at Xinhua said.

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

Sichuan is also an important supplier of titanium, the feedstock for TiO2, providing nearly 50% of the total supply in China, said another Chinese TiO2 producer. Thus, some TiO2 facilities in northwest China were shut down or have had to cut operating rates because of a shortage of feedstock, it said.

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.

Demand growth in China for TiO2 is estimated at 15% year-on-year in 2008, the supplier added.

Prices of imported TiO2 in the domestic market in China were stable-to-firm at CNY21,300-22,000/tonne ($3,087-3,667/tonne) ex-warehouse (EXWH) in the eastern region for the R902 grade and at CNY20,300-21,500/tonne EXWH for the Tiona595 grade in the week ended 12 June, according to Chemease.

Lynn Du contributed to this article

($1 = CNY6.90)

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By: Prema Viswanathan
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