“China’s titanium dioxide production capacity last year was nearly 4 million tons, and this year, with new capacity coming online, it will total 6.5 million tons. What does it mean when an industry’s capacity exceeds demand by 50%? I think that speaks for itself,” said Xie Bingkun. On April 14, Xie Bingkun, chairman of Kunchai Technology (SH603826, stock price: RMB 56.33, market capitalization: RMB 26.362 billion), granted interviews to media outlets, including a reporter from the Daily Economic News. The titanium dioxide industry is dominated by numerous major players, making it fiercely competitive—a well‑known red‑ocean sector. Xie Bingkun is acutely aware of the industry’s current situation, yet he holds a different view: Kunchai Technology’s extraction‑based chlorination process produces titanium dioxide whose quality rivals or even surpasses that of international giants. As Xie puts it, the company can achieve the cost structure of the sulfuric acid process while offering pricing comparable to the chloride process. “China has substantial demand for titanium dioxide, yet no domestically produced chlorinated titanium dioxide can truly represent Chinese standards—our supply chain remains firmly controlled by foreign firms. For example, white shirts turn yellow within a year, and toilets purchased as pristine white soon become stained—all because sulfuric‑acid‑based titanium dioxide is extremely unstable,” Xie Bingkun noted.

“China’s titanium dioxide production capacity last year was nearly 4 million tons, and this year, with new capacity coming online, it will total 6.5 million tons. What does it mean when an industry’s capacity exceeds demand by 50%? I think that speaks for itself,” said Xie Bingkun.

 

On April 14, Xie Bingkun, Chairman of Kunchai Technology (SH603826, stock price RMB 56.33, market capitalization RMB 26.362 billion), granted interviews to media outlets, including a reporter from the Daily Economic News.

 

The titanium dioxide industry is dominated by numerous major players, with fierce market competition, making it a well‑recognized red‑ocean sector. Xie Bingkun is acutely aware of the industry’s current landscape, yet he holds a different view: Kuncai Technology’s extraction‑based chlorination process produces titanium dioxide whose quality rivals or even surpasses that of the global titania giants. As Xie puts it, the company can achieve the cost structure of the sulfuric acid process while offering a price comparable to that of the chloride process.

 

“China’s demand for titanium dioxide is substantial, yet no domestically produced, qualified chlorinated titanium dioxide can truly represent the country—our supply chain remains firmly constrained by foreign players. For instance, a white shirt turns yellow within a year, and a newly purchased toilet bowl, though white at first, quickly yellows—precisely because sulfate‑based titanium dioxide is extremely unstable,” said Xie Bingkun.

Xie Bingkun. Image source: Photo provided by the interviewee.

 

Domestic titanium dioxide products still lack sufficient competitiveness.

China is the world’s leading producer of titanium dioxide. According to data from the U.S. Geological Survey, as of the end of 2022, global titanium dioxide production capacity totaled approximately 9.4 million tons, with China accounting for about 5 million tons—representing 53% of the global total.

 

However, overall, the titanium dioxide market—being a bulk commodity—is highly competitive, with production capacity far exceeding demand. In its 2022 annual report, global titanium dioxide giant Chemours (NYSE: CC; stock price $29.62; market capitalization $4.4 billion) stated that worldwide demand for titanium dioxide pigments in 2022 was approximately 6.8 million tons, while global production capacity for titanium dioxide pigments was estimated at around 8.9 million tons.

 

Domestic data also reveal a similar situation of overcapacity. According to the Titanium Dioxide Industry Technology Innovation Strategic Alliance, in 2022, the total effective production capacity of 43 titanium dioxide producers nationwide reached 4.7 million tons, while the industry’s total output stood at 3.914 million tons, resulting in an average capacity utilization rate of 83.28%.

 

Regarding overcapacity that far exceeds demand, Chemours analyzes that 60% of the global 6.8 million‑tonne demand is for high‑performance titanium dioxide pigments, and a key driver of this excess capacity is structural mismatches. “We believe that the capacity utilization rate for high‑performance titanium dioxide pigments is significantly higher than that for general‑purpose, lower‑performance titanium dioxide pigments,” Chemours stated in its 2022 annual report.

 

Bi Sheng, Secretary-General of the Strategic Alliance for Technological Innovation in the Titanium Dioxide Industry and Director of the Titanium Dioxide Division at the Chemical Industry Productivity Promotion Center, points out in his paper that recently launched iron‑phosphate projects will also generate titanium dioxide as a byproduct.

 

“It is foreseeable that, in a few years, even if only some of these projects come to fruition, China’s titanium dioxide industry could see its total production capacity exceed 10 million tons per year. By then, the market outlook and the industry’s landscape will be truly beyond imagination,” said Bi Sheng.

 

In fact, the “general‑purpose, low‑performance titanium dioxide pigment” referred to by Chemours is primarily sulfate‑process titanium dioxide.

 

In 2011, the National Development and Reform Commission issued the “Guidance Catalogue for Industrial Structure Adjustment (2011 Edition),” which adopted an industrial policy restricting the construction of new sulfuric acid–process titanium dioxide production facilities while encouraging the development of chloride‑process titanium dioxide plants with a single‑line capacity of 30,000 tonnes per year. This policy was retained in the 2019 edition of the Guidance Catalogue for Industrial Structure Adjustment.

 

“To date, 90% of domestic titanium dioxide production relies on the sulfuric acid process, while the remaining 10% produced via the chloride process still fails to match the quality of even the least competitive among the ten leading foreign companies,” said Xie Bingkun.

 

According to statistics from the Secretariat of the Titanium Dioxide Industry Technology Innovation Strategic Alliance and the Titanium Dioxide Sub‑Center of the Chemical Industry Productivity Promotion Center, in 2022, chloride‑process titanium dioxide accounted for 12.70% of the nation’s total titanium dioxide production that year. In 2022, excluding plants that had ceased operations or shut down, there were 43 full‑process producers in China that maintained normal production conditions. Among them, two employed exclusively the chloride process (CITIC Titanium Industry and Yibin Tianyuan Haifeng & Tai), three operated both the sulfate and chloride processes (Longbai, Pangang Vanadium & Titanium, and Lubei Chemical), while the remaining 38 relied solely on the sulfate process.

 

Priced lower than foreign competitors.

Kuncai Technology’s primary products have consistently been pearlescent materials.

 

“Ninety percent of our pearlescent pigment customers use titanium dioxide. According to a survey conducted by Kuncan, we currently serve 60% to 70% of global titanium dioxide demand in the pearlescent pigment segment. We have a comprehensive global market network, encompassing warehousing, logistics, sales and settlement, and after-sales service,” said Xie Bingkun.

Thumbnail of Kunchai Technology’s titanium dioxide plant. Photo source: Zhao Linan, Every Economy Reporter.

 

It is precisely the intersection between pearlescent materials and titanium dioxide that prompted Xie Bingkun to resolve to enter this industry.

 

“The market size ratio between pearlescent materials and titanium dioxide is 1:100. If the global market for pearlescent materials stands at 100,000 tons, then that for titanium dioxide would be 10 million tons. Current statistics are incomplete; official figures put the latter at just over 8 million tons. After factoring in companies that were not included in the official tally, the total approaches nearly 9 million tons.”

 

Xie Bingkun said, “Producing pearlescent materials requires large quantities of titanium tetrachloride. Due to its limited transport radius and price volatility, titanium tetrachloride has posed significant challenges for our operations. Initially, we sought to use an extraction process to produce titanyl chloride as a substitute. Through careful observation, we found that titanyl chloride yields titanium dioxide of exceptionally high quality—indeed, surpassing that achieved via the chloride process. However, during the industrialization phase, we encountered countless obstacles. Over the course of 13 years, we focused on demonstrating the feasibility of the process, the reliability of the materials, and the stability of the equipment.”

Kuncai Technology’s titanium dioxide production workshop employing the extraction method. Image source: Photo provided by the interviewee.

 

In a previous announcement, Kuncai Technology stated that its extraction process represents a third-generation method for producing titanium dioxide. According to the company, this process uses ilmenite powder as the raw material: ilmenite is dissolved in hydrochloric acid, followed by freezing and crystallization to precipitate ferrous chloride. Solid–liquid separation then yields an acid‑leaching solution containing titanium ions. Through extraction and back‑extraction, titanium oxychloride is obtained; this compound undergoes hydrolysis, solid–liquid separation, calcination, and subsequent processing to produce finished titanium dioxide. Meanwhile, ferrous chloride is subjected to high‑temperature roasting to produce iron oxide, while hydrogen chloride is recovered. Throughout the system, both hydrochloric acid and the extractant are recycled.

 

“At present, the quality of our titanium dioxide should be on par with, or even surpass, that of the leading international brands. We have already commissioned a 200,000‑ton production line, and in the future we aim to bring six such lines into operation, bringing our total capacity to 800,000 tons. Looking ahead, the project’s overall development plan targets a capacity of approximately 1.5 million tons,” said Xie Bingkun.

 

According to data from BaiChuan YingFu, the downstream applications of titanium dioxide primarily include coatings, plastics, papermaking, and inks, accounting for approximately 59%, 23%, 10%, and 3%, respectively.

 

According to data from the China Coatings Industry Association, China’s paint production declined in 2022, primarily due to the downturn in the real estate sector.

Data source: Wind; chart created by a reporter from Every Economy.

 

Driven by sluggish downstream demand for titanium dioxide and the continued expansion of low-end production capacity in the industry, titanium dioxide prices declined in 2022. China’s titanium dioxide export price fell from approximately USD 3,000 per ton at the beginning of the year to about USD 2,000 per ton by year-end. Meanwhile, import prices for titanium dioxide rose rather than fell in 2022.

 

In February this year, when converted to RMB, China’s import price for titanium dioxide was approximately RMB 10,000 per ton higher than its export price. In other words, the price gap between imports and exports reflects the price differential between high-end and low-end titanium dioxide.

 

“This year, Kuncai has launched a substantial volume of titanium dioxide onto the market. Our customers are major users across various industries or leading enterprises, all of whom place a strong emphasis on cost control and on cultivating new suppliers. We’ve positioned our product in the market at RMB 1,000 per ton lower than that of foreign‑imported competitors—a price that has been well received by our clients, reflecting their high level of approval,” said Xie Bingkun.

 

In Xie Bingkun’s view, the company’s chloride-process titanium dioxide boasts a clear cost advantage: “Kunchai sells at the price of chloride-process titanium dioxide powder, while its production costs are comparable to those of sulfate-process titanium dioxide powder.”

 

“We closely monitor the manufacturing costs of our international competitors. Top-tier global brands operate at roughly RMB 28,000 per ton, whereas we aim to keep our costs below RMB 30,000. The cost structure of foreign brands is difficult to sustain: they need to price their products above RMB 32,000 per ton to turn a profit, with some even reaching RMB 36,000, though most hover around RMB 33,000. Selling at RMB 30,000 per ton would place significant pressure on them,” said Xie Bingkun.