Development status and trend analysis of iron oxide red industry in China

1、 Iron oxide capacity and output

According to the data, China's iron oxide production capacity hovered between 700000-800000 T / A from 2015 to 2020 and remained basically stable. By 2020, China's iron oxide production will be 800000 T / A, which is consistent with that in 2019. In 2020, due to the impact of COVID-19, some construction works stopped in the first half of 2020, making iron oxide production capacity failed to increase.

China's iron oxide industry is in a state of integration, and the output shows a downward trend, while enterprises continue to optimize product structure and improve product added value. The data show that in 2020, the output of China's iron oxide industry was 540000 tons, a year-on-year decrease of 6.8%, of which the output of iron oxide red was 237000 tons, a year-on-year decrease of 3.6%. The proportion of iron oxide red output in iron oxide output fluctuated between 42% - 46% from 2015 to 2020.

2、 Iron oxide red production capacity and output

In terms of capacity, since 2016, China's iron oxide red production capacity has been rising continuously. By 2020, China's capacity of iron oxide red has risen to 350 thousand tons / year, compared with 2019, it has dropped by 1 thousand tons / year, mainly due to COVID-19's influence. With the control of COVID-19 in China, it is expected to maintain 360 thousand tons / year by 2021, and the excess capacity is more serious.

Affected by the overall economic environment, the output of iron oxide red in China continues to decline, from 295000 tons in 2017 to 237000 tons in 2020. With the decrease of output and the increase of capacity, China's capacity utilization rate decreased from 89.21% in 2016 to 67.71% in 2020. There is a serious overcapacity of domestic iron oxide red. After 2020, the iron oxide red industry will enter the period of industrial structure adjustment, so the domestic iron oxide red output may increase slightly in the next few years.

3、 Consumption of iron oxide red

Affected by the overall economic environment, the economic operation growth of China's iron oxide red industry slowed down in 2019, but it still maintained a relatively stable trend. According to the data, the production and marketing rate of iron oxide in China in 2019 was 90.22%, basically the same as that in 2018.

In 2021, coating ranked first in the composition of iron oxide red application field, accounting for 45% of the total consumption, followed by construction application, accounting for 28% of the total consumption, and rubber industry, accounting for 16% of the total consumption. The three application fields of coating, construction and rubber account for 89% in total. The stable and healthy development of downstream industries such as construction, rubber and coating will promote the stable development of iron oxide red industry.

4、 Development trend of iron oxide red industry

1. Develop high-end products

China is a large producer of iron oxide red, but it is not a powerful country. The domestic production capacity of iron oxide red is mainly concentrated in the middle and low-end fields, and there are deficiencies in the field of high-end products. High grade iron oxide red products are the necessary raw materials for special coatings and high-grade fine grinding materials, which is the inevitable trend of the development and upgrading of iron oxide red industry. Therefore, domestic enterprises need to vigorously develop high-end iron oxide red products in the future.

2. Vigorously develop the production of iron oxide red raw materials

The healthy development of iron oxide red industry is inseparable from the support of raw material industry. At present, the upstream industry of iron oxide red in China has excess capacity and fierce competition. For better development in the future, we must strengthen the adjustment of industrial structure and the construction of market exit system for backward and high energy consuming enterprises. Only in this way can the iron oxide red raw material industry develop steadily.

3. Standardize iron oxide red industry and improve iron oxide production technology

(1) Production enterprises increase R & D efforts in raw materials, process technology and application fields;

(2) In the production process, strengthen the accurate connection with user enterprises, and develop products more suitable for customers' real needs through adjusting process technology and product modification research;

(3) In terms of product refinement, we should benchmark with the technology, process and equipment of benchmarking enterprises, so as to find differences and solve the gap problems;

(4) Through the guidance of the association and relevant government departments, carry out transformation and upgrading of the current iron oxide red enterprises, eliminate and limit a number of backward production capacity, carry out asset restructuring and resource integration, and promote the healthy development of the whole industry;

(5) The iron oxide industry should resolutely put an end to price war and vicious competition, avoid homogeneous competition, pursue differentiated competition, ensure industrial profits and benefits, and rationally promote the healthy and sustainable development of iron oxide red industry;

(6) The industry association shall take the lead to standardize the marketing and sales behavior of pigment enterprises and minimize excessive publicity and vicious competition in marketing. Pay more attention to improving product performance, quality and brand building;

(7) Realize the low pollution of production process, continuously promote the advanced green process of iron oxide manufacturing and promote the green transformation of traditional industries on the basis of the continuous in-depth implementation of the green development action plan.