Two Groups of Yunnan to Build the Largest Titanium Industrial Cluster in China

With the commissioning of Lufeng Tuguan 20,000-ton-per-year titanium processing site of Yunnan Titanium under KunSteel on July 1,the largest titanium industrial cluster of China,built by KunSteel and CYMG, is taking shape in Yunnan.

It is learned that Yunnan has one of the most abundant titanium resources in China, which is characterized by various advantages including large reserves, high grade and easy separation.In April 2008, the first cold-rolled titanium coils were produced at KunSteel, making it the only one in China with complete processes from hot-rolled to cold-rolled titanium coils. In April 2009, KunSteel invested RMB590 million in the 20,000-ton titanium profile processing project at Lufeng County, Chuxiong Region.

In Nov. 2007, Xingli Non-ferrous Metal Co.,Ltd. under CYMG invested RMB4 billion in the 60,000-ton-per-year titanium dioxide and 10,000-ton-per-year titanium sponge project in Lufeng, with advanced titanium smelting technologies introducted from Germany and Ukraine. This project is expected to be put into production in the next March.

With the close cooperation of KunSteel and CYMG, the largest titanium industrial cluster of China is now taking shape in Yunnan, covering the whole industrial chain from titanium mining, ilmenite, Ti slag smelting, titanium dioxide, titanium sponge to titanium ingot, billet,coil and rolled stock. It is learned that CYMG currently owns two listed companies, Chihong Zinc & Germanium and Yunnan Aluminum.KunSteel also holds the ST Malong with asset reconstruction.

In the first 6 months, Zunyi Titanium, the largest titanium plant in China, raise the titanium sponge price twice. In early May, the prices of titanium sponge of different grades rose by RMB5,000 per ton, and the price of the first grade titanium sponge rose from RMB66,000 per ton to RMB71,000 per ton.

On the 2010 Annual Conference for China Titanium Industry, all participants were optimistic about the improvement of titanium product price in the next 1 - 2 years. Despite the capacity expansion, the capacity utilization rate will gradually improve as the domestic and international demands increase. So will the titanium product price.

Wang Junfei, Analyst of Orient Securities,maintained that in 2010, the up-trend of international aircraft industry was obvious. Globally, the aircraft industry accounted for nearly a half of total titanium demand. Considering the 6-18 months' advance period for stocking-up,we could say the international aircraft industry would embrace its recovery. Besides, promoted by the global economic recovery, the civil titanium demands from chemistry, metallurgy,power and salt production are also expect to rise, which will further promote the recovery of titanium industry. There will be greater and higher demands for the titanium and alloy products by various plans in China, including"Big Plane" plan, "Chang'e" Plan, "Orbit Station" plan, Nuclear Power Station plan and marine projects, as well as the sustained development of China economy.

The 12th 5-year plan for China titanium industry sets the major goals as follows: control the capacity growth of titanium sponge and titanium ingot; improve the degree of concentration in the titanium industry and form 3 - 5 world-class plants; promote the energy efficiency and emission reduction of the titanium industry: the unit energy consumption for titanium sponge will be reduced to 26000kwh/t;promote the adjustment of industrial structure;realize the localized production of titanium and alloy large forged pieces, profiles, extruded tubes, titanium belts and welded pipes; strive to improve the export ratio of titanium sponge and profiles to 30%.