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Market demand peak season is coming soon Titanium dioxide prices are expected to continue to rise

[ Information Release:Admin | Times:2019-03-18 | Hits:282 ]

At the end of January, Venator announced that it would increase the price of its titanium dioxide in the United States and Canada, with a price increase of about $ 150 / ton. Stimulated by the rise in prices in foreign markets, dozens of titanium dioxide enterprises in China have announced price increases ranging from 500 yuan to 600 yuan / ton.
The global supply pattern of titanium raw materials is relatively concentrated, and monopoly characteristics tend to cause prices to skyrocket. Since the price of titanium ore fell in 2012, major global titanium ore suppliers have significantly reduced capital expenditures. It is expected that the supply of global titanium raw materials will continue to be tight in the next five years, thereby supporting prices.
Enterprises generally raise prices
Since the fourth quarter of 2018, the domestic titanium dioxide market has entered a low season of demand and prices have been relatively low. At the same time, due to winter production restrictions, the operating rate of titanium dioxide companies has declined, and the industry is destocking. After the Spring Festival, manufacturers' inventory is generally low and orders are full. Large enterprises took the lead in announcing an increase of 500 yuan / ton for domestic customers.
According to statistics, from February 12th to 28th, more than 20 titanium dioxide producers across the country have sent letters to raise prices, with an average increase of 519 yuan / ton. This high-density concentrated price increase is mainly due to the increasing overall cost of most conventional producers. The production cost of rutile titanium dioxide with sulfuric acid method is mostly from 14,000 to 15,000 yuan / ton. Secondly, due to the low inventory positions of manufacturers, the backbone The actual comprehensive inventory of enterprises is about 10,000 tons less than the normal average. Sometimes the price increase does not need to consider the conventional theoretical conditions, and the actual situation on the supply side alone has strong precedents. Through this round of centralized price increase, downstream demand is reactivated, and most holders have improved their shipments. The channel distributors and end-users mostly purchase the titanium dioxide downstream channels on an as-needed basis, with less actual stock preparation. With the continuation of this phenomenon, the coordination of the demand market will increase, and the titanium dioxide will be further away from the next round of rationalized price hikes. It is not far away, and the industry chain drives the upstream titanium concentrates, downstream pigments and other industries are also looking forward to rising sentiment, restarting the industrial chain linkage effect.
The rally is expected to continue
Yan Tiyun, an analyst at Yunshang Titanium Industry, believes that the current price increase of titanium dioxide can be explained from three aspects: First, the price of titanium dioxide has bottomed in the short term. The prices of rutile-type titanium dioxide and anatase-type titanium dioxide are at low prices since 2017, and there is limited room for continued downside. Second, the demand season for titanium dioxide is approaching. Affected by winter environmental protection and production restrictions and sluggish demand before the holiday, the company's operating rate has fallen and the industry is in a state of destocking. At present, the company's inventory is at a historically low level. Third, overseas markets are picking up, and international giants have raised prices to boost market confidence.
At present, in the supply of high-grade titanium ore, the trend of industry concentration is more obvious. The top five titanium raw material suppliers RioTinto, Iluka, Tronox, Cristal, and Kenmare have a total market share of about 46%.
From the perspective of the supply side, since the price of titanium ore fell in 2012, major global titanium ore suppliers have significantly reduced their capital expenditures. From 2013 to 2018, there was almost no new mine supply in the world, and some mines were gradually approaching mining. At the end, the supply of high-grade titanium raw materials continued to decline. It is expected that the global supply of titanium raw materials will continue to be tight in the next 5 years, supporting the global price of titanium dioxide.
At present, some distributors and most of the downstream enterprises have low inventory and there is a need for replenishment. This round of price increases has basically been solid. Under the joint action of rising titanium dioxide prices, high-grade titanium ore and rutile both have relatively high expectations of rising. High-grade titanium ore continues to keep in short supply, and international miners may raise prices one after another.
At present, the effective production capacity of domestic titanium dioxide is about 3.2 million tons, and the average operating rate of the industry has reached 90%. March to May will enter the traditional consumption season of the industry, and the price of titanium dioxide is expected to continue to rise.
In addition, with the gradual resumption of work in the downstream industries in the north, this part of the demand is thawed on a large scale, and the continuity required for the supply side to rise strongly may be strengthened.
At the beginning of March, the domestic titanium dioxide price market rose steadily. The industry believes that key enterprises led the rise for more than half a month. In February, Lido closed and the actual orders of holders rose. Some people always believe that the price is the most cherished right now. In the short term, the comprehensive price of titanium dioxide may rise steadily, and the actual transaction price will be negotiated. On March 7th, Longman Baili and China Nuclear Titanium Dioxide two titanium dioxide companies simultaneously issued price adjustment letters. Pangang Group's Chengdu vanadium titanium and Shandong Daun Titanium Industry also issued price adjustment letters on March 7. Subsequently, 16 domestic titanium dioxide companies will also adjust their prices one after another, officially launching a new round of price increase this year.