Since 2007, the domestic ferric chloride industry has become more competitive and sales prices have gradually declined. In August and September, the price in East China has dropped to between 3300 and 3400/ton, and in northern China between 3100 and 3200/ton. Since the prices of iron scraps and liquid chlorine, the raw materials for the production of ferric chloride, have also been rising gradually this year, the profitability of the product is shrinking.
China's ferric chloride production enterprises are mainly located in the central and eastern regions. Three of the larger ferric chloride production companies are in Shandong Province and one in Anhui Province. After expansion, the total capacity of ferric chloride in the three companies has reached 28,000 tons this year. According to industry insiders, ferric chloride is mainly used as a water treatment agent, corrosives for printing plates, oxidants and mordants for the dye industry, catalysts for the organic synthesis industry, raw materials for the manufacture of other iron salt pigments, and for beneficiation. At present, China's domestic downstream producers of ferric chloride can only digest 16,000 tons of output.
In the face of the harsh reality of oversupply, the three major production companies had to adopt sales strategies that “don’t let the market go†to deal with the current market situation. In spite of this, the production facilities of the company are still unable to produce at full capacity, and the unit energy consumption of the equipment has thus risen to varying degrees. This has caused various companies to worry. In addition, at present, there are still seven or eight small-scale production companies in China that will be able to compete in the market in the future.
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