(I) Overview of titanium and titanium alloy industry

 

1. Basic properties and uses of titanium Titanium is called "all-round metal" in metal materials and is the "third metal" with great development prospects after iron and aluminum. Titanium is located in the IVB group of the periodic table. It is silvery white, hard, and has a melting point of 1,668℃. It is a refractory light metal and one of the important strategic metals of the country. Titanium has outstanding characteristics such as low density, high strength, good high and low temperature resistance, strong corrosion resistance and excellent forming performance. It is widely used in aviation, aerospace, ships and weapons, biomedicine, chemical metallurgy, marine engineering, sports and leisure, etc., and is known as "space metal" and "strategic metal". Titanium alloy is an alloy formed by adding aluminum, tin, vanadium, molybdenum, niobium and other elements to titanium to adjust the matrix phase composition and comprehensive physical and chemical properties. Due to the complex smelting and processing technology involved in titanium and titanium alloys and high technical content, currently only the United States, Russia, Japan and China have mastered the complete titanium industry production technology. Titanium and titanium alloys are of great strategic significance to a country's national defense, economy and technological development. The main application scenarios and related properties of titanium are summarized as follows: Data source: China Nonferrous Metals Industry Association.

2. The position and role of the industry in the industrial chain, and the correlation between upstream and downstream industries 1) Titanium industry industrial chain The titanium industry industrial chain can be divided into two: one is the titanium dioxide industry chain; the other is the titanium material industry chain. The titanium dioxide industry starts with the mining and selection of ilmenite and rutile, and produces chemical intermediates-titanium dioxide through sulfuric acid and chlorination methods. The downstream is mainly used in coatings, plastics and papermaking industries. The titanium material industry mainly includes four stages. First, rutile and ilmenite are used as the main raw materials, and natural rutile concentrate and ilmenite concentrate are obtained after beneficiation and enrichment, and then sponge titanium is obtained through extraction processes such as magnesium reduction method; secondly, sponge titanium is used as the main raw material, and titanium ingots are obtained through processes such as melting and casting, or intermediate alloys are added to melt and smelt into titanium alloy ingots; thirdly, titanium products of different specifications (shapes) are produced by deformation treatment, heat treatment and mechanical processing such as forging, rolling, extrusion, drawing, etc.; finally, in some industries and industrial products industries, titanium materials can be manufactured into titanium and titanium alloy parts or equipment through deep processing technology.

2 The status and role of the titanium industry in the industrial chain, and the correlation between upstream and downstream industries The titanium industry is located in the middle of the titanium industry chain, playing a connecting role and playing an indispensable role. The upstream of the titanium industry is mainly raw materials such as sponge titanium. Since the cost of raw materials accounts for a large proportion of titanium products, the supply and price changes of upstream raw materials will directly affect the output and product costs of the titanium industry. According to the "China Titanium Industry Development Report 2022", my country is the world's largest producer of titanium sponge. In 2022, the output of titanium sponge reached 175,000 tons, accounting for 62.70% of the world's total titanium sponge output, and the supply is sufficient. The downstream of the titanium industry is mainly aerospace, petrochemical, marine energy and other industries. The market size of the downstream industry directly determines the market size of the titanium industry, and changes in the market demand of the downstream industry will also directly affect the research and development and sales of products in this industry. In recent years, with the steady advancement of national policies such as my country's national defense and military modernization, green development, high-end development, and Industry 4.0, the demand for downstream markets has been gradually released, bringing further growth space for my country's titanium industry.

4. Development History of Titanium Industry Titanium was discovered as a chemical element in the late 18th century, but because of its active nature and difficulty in extraction, it was not until the late 1940s that industrial production began in the United States. Since then, Japan, Russia, and China have successively established their own titanium industry production systems. At present, the United States, Japan, and Russia have their own characteristics in the application field and product structure of titanium materials. Among them, titanium materials in the United States are mainly used in the aviation field; in Japan, titanium materials are mainly used in civil fields such as heat exchangers, electrolysis, and chemicals; and in Russia, titanium materials are mainly used in the aviation and shipbuilding fields. my country's titanium materials industry started in the mid-1950s and can be divided into three stages: (1) Initial industrialization stage (1956-1978): As one of the key projects of the "First Five-Year Plan", the Beijing Institute of Aeronautical Materials was established in 1956, and the first titanium alloy laboratory in my country was established the following year, successfully trial-producing titanium alloys; in 1976, the Baoji Nonferrous Metal Processing Plant (now Baoti Group) completed its initial construction, marking the beginning of my country's titanium materials industrialization. As of 1978, my country's titanium materials output was about 504.92 tons. (2) Rapid development stage (1979-2012): Since the reform and opening up, thanks to the development of my country's chemical, metallurgical and other industries, the scale of my country's titanium materials market has continued to grow. Among them, my country's titanium production increased from 2,233.00 tons in 2000 to 51,600 tons in 2012, with a significant increase in scale. However, the overall product structure is still dominated by low- and medium-end chemical industry, metallurgy, etc. Such low- and medium-end demand has driven the rapid expansion of titanium production capacity, making the problem of structural overcapacity in my country's titanium industry prominent, and the structure of my country's titanium industry needs to be optimized. (3) Development and adjustment stage (2013 to present): With the adjustment of my country's macroeconomic structure and the implementation of policies such as increasing product added value and reducing pollution emissions, the demand for low- and medium-end titanium materials in traditional industries such as chemical industry and metallurgy has declined, and the titanium industry has gradually entered an adjustment period. In 2013, my country's titanium production was about 44,500 tons, a year-on-year decrease of 13.78%. After several years of market digestion and absorption, as well as technological breakthroughs in the titanium industry and the expansion of application areas, the results of the industry's structural adjustment have begun to show. At present, the structure of my country's titanium industry is gradually moving from the past low- and medium-end fields to the medium- and high-end fields such as aerospace, ships and high-end chemicals.

(II) Industry development 1. Market size: Rapid growth, industrial structure development towards high-end Titanium, with its excellent performance, has a wide range of applications. It is not only a key supporting material in cutting-edge science and technology fields such as aviation and aerospace, but also an important basic material for the transformation and upgrading of traditional industries and technological innovation. In recent years, thanks to breakthroughs in production equipment and technical capabilities, as well as the demand driven by downstream mid-to-high-end fields such as aerospace, ships, and high-end chemicals, the titanium market has grown rapidly. According to statistics from the Titanium Zirconium Hafnium Branch of the China Nonferrous Metals Industry Association, my country's titanium production in 2022 will be about 151,000 tons, a year-on-year increase of 11.08%; in the past five years (i.e. 2018-2022), my country's titanium production has an average annual compound growth rate of 24.23%, which is growing rapidly. my country's titanium industry structure is currently gradually moving towards the mid-to-high-end field. In 2022, the total demand for titanium in my country's aerospace and shipbuilding fields increased by 11,800 tons, a year-on-year increase of 45.26%, and the titanium industry structure is in an accelerated upgrade period. It is expected that with the deepening of national policies such as national defense and military modernization, green development, high-end development, and Industry 4.0 in the future, the high-end application scenarios and potential market space of domestic titanium materials will gradually expand. Data source of my country's titanium production from 2018 to 2022: Titanium Zirconium Hafnium Branch of China Nonferrous Metals Industry Association. 2. Consumption structure: Demand in the chemical industry accounts for half, and demand in the aerospace industry is growing rapidly. Titanium and titanium alloy materials are widely used in chemical, aerospace, electric power, sports and leisure and other fields. The development of downstream application fields has a direct impact on the market demand and technological innovation of titanium and titanium alloys. According to statistics from the Titanium Zirconium Hafnium Branch of China Nonferrous Metals Industry Association, my country's titanium sales in 2022 will be about 145,000 tons, a year-on-year increase of 16.50%; from 2018 to 2022, my country's titanium sales will have an average annual compound growth rate of 25.88%, a rapid growth. Among them, chemical industry is the largest application field, accounting for 50.34% in 2022; aerospace ranks second, accounting for 22.76%; medicine ranks third, accounting for 4.14%. In the chemical industry, titanium is widely used as an anti-corrosion material in the production of chlor-alkali, soda ash, and plastics due to its excellent corrosion resistance. However, due to factors such as stricter environmental protection policies and the accelerated elimination of backward production capacity, the use of titanium and titanium alloys in the chemical industry has tended to stabilize.