Imports then fell to 4.7kt in 2020 due to the disruption caused by the global pandemic, but from January to April 2021, Chinese imports of titanium sponge had already reached 3.1kt, indicating a potential record total of 9kt if the trend continues by year-end, Roskill reports.
Production has increased from 53kt in 2016 to approximately 88kt in 2020, and is forecast to increase further in 2021
Historically, Chinese exports were around 5kt of titanium sponge, but since 2018, this has reduced to approximately 1kt.
Industrial demand
Chinese sponge production primarily serves industrial applications due to a lack of manufacturers holding the required certification to produce premium grade sponge material suitable for the aerospace market. Production has increased from 53kt in 2016 to approximately 88kt in 2020, and is forecast to increase further in 2021.
Industrial demand was less affected by the global pandemic, so Chinese sponge production did not suffer the effects of reduced aerospace demand.
The chemical industry is the primary end-use sector for titanium demand in industrial applications, where chlorine and PTA production are major drivers.
World chlorine production is expected to grow at a CAGR of 2.8% from 75Mtpy to over 95Mtpy by 2030, says Roskill, adding that this will be primarily driven by growth in China, which is expected to occur at a higher rate of 3.4%py.
The Chinese chloralkali sector is forecast to reach its effective capacity (assumed to be 95% utilization) in 2022/2023, therefore incentivizing more capacity to meet future demand. Another important industrial end-use sector is power generation, according to the report. As the world migrates to a lower carbon future, nuclear power generation is expected to increase.
BP’s energy outlook to 2050 shows nuclear power generation to increase by 38%, if the global temperature rise is limited to 1.5ºC. Of the 54 reactors currently under construction (defined by the World Nuclear Association as those for which the first concrete pouring has occurred), 17 (31%) are in China.
According to Asian Metal, the price of Chinese titanium sponge has been consistently rising from July 2020 lows of $6.9/kg to $10.5/kg in June 2021. Prices are yet to reach pre-pandemic levels of $11.5/kg, but this recent performance combined with the trade activity and increasing sponge production indicates a strong near-term demand from China.
