What are the opportunities and challenges for Baoji's titanium mill products industry?

Long-term demand from the mill products manufacturing sector will continue to rise in the coming years, supported by output expansion projects in the downstream purified terephthalic acid, caustic soda and sodium carbonate industries, as well as increasing demand from the aerospace, marine, automotive and biomedical sectors.

Market participants expect domestic demand for titanium mill products to reach 110,000t in 2025, up from 69,000t in 2019, driven by developments in the high-end aerospace and other industries.

China's homemade large aircraft may also bolster demand for titanium mill products in one or two years. China's advanced regional jet for the 21st century was launched and secured 520 plane orders in November 2018. Large civil airliner Comac C919 has received 815 plane orders and will be delivered to consumers this year. The CR929 project is also being developed and will start mass production in the coming years.

Baoji's titanium mill products industry are facing many problems including keen competition between producers, surplus production capacity of low-end products and a lack of high-end products manufacturing capacity. Some high-end titanium mill products is heavily dependent on imports from Japan, the US and Russia.

Limited availability of high-quality titanium concentrate, rutile and titanium sponge feedstock has also restricted the development of China's titanium mill products industry. China continues to import high-grade titanium ore feedstock to meet its demand owing to supply shortages and low-metal grade in domestic ore resources.

China produced 5.35mn t of titanium concentrate last year, up by 7.4pc from 4.98mn t in 2019, while the country's titanium ore and concentrate imports rose by 15.3pc on the year to 3.01mn t.

The country imported 631,100t of titanium ore and concentrate in January-February 2021, showing an increase of 81,500t or 14.83pc compared with a year earlier.

It imported 1,338t of high-end titanium sponge in the first two months of this year, a rise of 78t or 6.19pc from a year ago, boosted by firm demand from the high-end titanium mill products sector.