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TZMI.COM
2011 2013
T Z M I
Feedstock pressure on the
titanium sponge market
DAVID McCOY
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 2
About TZMI
TZMI is a global, independent
consulting and publishing
company with offices in
Australia, the US, Europe,
Africa and China. The strength
of TZMI’s consulting services
stems from extensive practical
experience in the mineral
sands, titanium dioxide and
coatings industries and from a
comprehensive database,
which has been built up over
many years.
TZMI has proven expertise
gained from our consultants
having many years of direct
operating experience in the
industry in chief executive,
senior operational, analytical
and marketing roles.
TZMI’s publications and data
services support the consulting
activities and ensure up-to-
date, high quality and
comprehensive data, analysis
and information across the
mineral sands, zircon and Ti02
pigment industries.
Associated Companies
Allied Mineral Laboratories Resource assessment and flowsheet development for mineral sands, iron or and other heavy mineral deposits.
TZMI provides operational and technical expert advice on many areas including:
Mergers and acquisitions
Market assessments and industry analysis
Due diligence
Pre-feasibility studies incl. preliminary capital and operating cost estimation
Competitive cost analysis and benchmarking
Technical reviews and audits
Resource assessments
Physical separation test work
Flowsheet development
Customised data analysis and reporting
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 3
Value of mineral sands production: 1980 – 2012
Considerable value added over last two years.
20
00
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
20
12
+160.0%
+104.4%
+26.6% +193.5%
20
08
20
04
20
06
19
98
19
96
20
10
20
02
Zircon
Iron
Natural feedstocks
Beneficiated feedstocks
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 4
World’s known TiO2 resources
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 5
Major international suppliers
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 6
New feedstock project activity
0
5
10
15
20
25
30
35
40
45
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Number of companies
‘000 TiO2 units & ‘000 tonnes zircon
'000 TiO2 units '000 tonnes zircon
Reversal in industry activity from 2011
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 7
Production of mineral by type in 2012
High TiO2 content mineral is generally used to make titanium sponge
Sulfate ilmenite
Chloride ilmente/leucoxene
Sulfate slag Chloride fines
Chloride slag
UGS
Synthetic rutile
Rutile
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 8
Rutile – key to metal value chain
Sierra Rutile dredge
Iluka
Sierra Rutile
Cristal
Tronox
CRL
Rio Tinto
Ostchem
China various IRE
Forecast supply 2013
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 9
Rutile supply by country
Australia South Africa
Sierra Leonne India
Ukraine
China
‘000 tonnes Others
2014f 2013f 2012
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 10
Total titanium feedstock demand
6.9% 6.9%
85.4%
6.4
Million tonnes
7.1% 7.5%
2012
6.4
86.8%
5.9% 7.3%
+11.1%
0.0%
Pigment
Ti metal
Other
2014f
7.1
86.1%
2013f
Static demand for feedstocks in 2013 compared to 2012
TZMI is forecasting a significant step up in offtake in 2014
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 12
Sponge production in 2012
Does not include a small pilot plant in India
Russia
Kazakhstan
China
Ukraine
Japan
US
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 13
TiCl4 production costs
CIS US China Japan Average
+27.8%
Feedstock
CPC
Labour
Chlorine
Utilities
Other
© TZMI 2013 NOT FOR REPRODUCTION
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 14
TiCl4 prices in China
Ap
r-11
Ma
y-1
1
Dec
-11
Dec
-12
Ju
l-1
3
Au
g-1
3
Feb
-11
Se
p-1
3
Ja
n-1
3
Feb
-13
Ma
r-1
3
Ap
r-1
3
Ma
y-1
3
Ju
n-1
3
No
v-1
2
Oc
t-1
2
Ma
r-11
Se
p-1
2
Ja
n-1
1
Dec
-10
No
v-1
0
Oc
t-1
0
Se
p-1
0
Au
g-1
2
Ju
l-1
2
Ju
n-1
2
Ma
y-1
2
Ap
r-1
2
Ma
r-1
2
Ja
n-1
2
Feb
-12
Ju
n-1
1
Ju
l-11
Au
g-1
1
Se
p-1
1
Oc
t-11
No
v-1
1
-52.6% +121.4%
High
Low
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 15
TiCl4 is the largest cost in the manufacture of sponge and feedstock is the
large contributor to TiCl4 cost.
The weighted average cost of feedstock per tonne of TiCl4 increased by 13%
in 2012. But some sponge producers may have been caught by new
contracts kicking in.
The cash cost of producing TiCl4 varies widely between producers.
TZMI believes we have seen a 20 year peak in rutile costs to sponge
producers.
Take home messages
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 16
If you squeeze hard enough ……
Oct 2013 ITA 2013 | FEEDSTOCK PRESSURE ON THE TITANIUM SPONGE MARKET © 2013 17
Have you got your reference material yet?
TZMI.COM
2011 2013
Global delivery of insight and expert advice
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