ShenZhen Jakeconn Precision Technology Co., Ltd. , https://www.jakeconn.com
Heavy crude sulphate industry is hard to develop
In 2007, the barium sulfate market in China was booming, but the industry faced significant challenges despite strong demand. Although the market was tight and products were in high demand, many manufacturers struggled to make substantial profits. High production costs, outdated equipment, and increasing environmental regulations made it difficult for companies to operate efficiently. This was highlighted during a recent meeting of industry leaders, where participants shared their concerns about the sector’s sustainability.
Stakeholders from regions such as Shanxi, Shaanxi, Hebei, Guangxi, Hunan, and Chongqing noted that while all companies managed to achieve zero inventory, their profit margins remained extremely low. Some even reported losses. According to them, the main reasons behind this were the sharp rise in coal prices and the cost of raw barite, combined with the fact that most barium sulfate products were produced in a traditional, resource-intensive manner. With limited value-added processing, the low-tech nature of the product led to minimal profitability.
Currently, there are only 89 major producers in China with annual capacities exceeding 10,000 tons, contributing to a total output of around 200,000 tons per year. Most of this is used in the paint industry, with smaller portions going into plastics, rubber, and ink. The growth of the powder coating industry has further boosted domestic demand. Meanwhile, traditional barium sulfate-producing countries have seen declining production due to resource depletion, rising energy costs, and stricter environmental rules, which has pushed China's exports upward. Since 2001, China’s barium sulfate exports have grown at an annual rate above 10%, reaching 58,000 tons in 2007.
Experts predict that during the "Eleventh Five-Year Plan" period, China’s economic growth will remain around 8%. As key industries like construction and automobiles continue to expand, the demand for barium sulfate—used as a functional additive in coatings, plastics, and rubber—is expected to grow faster than the global average. By 2010, domestic demand could surpass 30 to 35 million tons, accounting for roughly 60% of the world’s total.
However, the current development model remains largely extensive, and increased market size hasn’t translated into better financial performance for many companies. In 2007, several large producers operated at a loss or with very slim margins. Into 2008, rising coal prices, scarce mineral resources, and higher labor costs pushed production costs up by about 40% compared to 2007, according to one company in Hunan.
Additionally, many firms face difficulties upgrading their technology and equipment due to low profitability. Environmental compliance also adds to the burden, as the industry is known for its high pollution and energy consumption. These challenges have forced companies to rethink their business strategies and find ways to improve efficiency and profitability.
At a recent industry workshop, leading barium sulfate producers reached a consensus: they must invest in advanced technology and environmental protection, ensure reasonable price increases, oppose low-cost dumping, and adjust their product structures to enhance competitiveness. These steps signal a shift toward more sustainable and profitable growth. While the market remains challenging, the industry is moving toward a new turning point, driven by innovation and strategic adjustments.