At the end of January, Venator announced an increase in the price of its titanium dioxide in the United States and Canada, with a price increase of about $150/ton. Stimulated by the price increase in foreign markets, dozens of titanium dioxide enterprises in China have successively announced price increases of 500 yuan to 600 yuan / ton.
The global supply pattern of titanium raw materials is relatively concentrated, and the monopolistic characteristics are likely to cause prices to skyrocket. Since the decline in titanium ore prices in 2012, major titanium ore suppliers around the world have significantly reduced their capital expenditures. It is expected that the global supply of titanium raw materials will continue to be tight in the next five years, thus supporting prices.
Corporate price increases
Since the fourth quarter of 2018, the domestic titanium dioxide market has entered the low season of demand, the price is relatively low, and affected by the limited production in winter, the operating rate of titanium dioxide enterprises has declined, and the industry has destocked. After the Spring Festival, manufacturers' inventory is generally low, orders are saturated, and large enterprises are the first to announce a price increase of 500 yuan/ton for domestic customers.
According to statistics, from February 12 to 28, more than 20 titanium dioxide producers nationwide issued letters to increase prices, both of which increased by 519 yuan / ton. This high-density concentrated price increase is mainly due to the higher comprehensive cost of most conventional producers. The production cost of sapphire-type titanium dioxide in sulfuric acid process is mostly between 14,000 and 15,000 yuan/ton. Secondly, due to the low inventory position of producers, the backbone The actual comprehensive inventory of the enterprise is about 10,000 tons less than the normal average. Sometimes the price increase does not need to consider the conventional theoretical conditions. From the actual situation of the supply side, there are also strong precedents. However, through this round of concentrated price increases, the downstream demand is reactivated, and most of the holders have improved their shipments. The channel and end users in the titanium dioxide down channel are mostly on-demand and scattered purchases, and the actual operation is less. With the continuation of this phenomenon, the cooperation degree of the demand market will increase, and the titanium dioxide will be rationalized in the next round. It is not far away, and the industry chain drives the upstream titanium concentrates, downstream pigments and other industries are also looking forward to strong sentiment, restarting the linkage effect of the industrial chain.
The rally is expected to continue
Yang Xun, an analyst with Titanium Titanium Industry, believes that the price increase of this round of titanium dioxide can be explained from three aspects: First, the price of titanium dioxide is short-term bottom. The prices of rutile titanium dioxide and anatase titanium dioxide are all at a low price since 2017, and the downside is limited. Second, the peak demand for titanium dioxide is coming. Before the holiday, due to the environmental protection and limited demand in winter, the operating rate of the enterprise declined, and the industry was in the state of destocking. At present, the enterprise inventory has been at a historical low level. Some large manufacturers have sealed their orders before the holiday, and the orders are sufficient after the holidays to lay the foundation for price increases. Third, the overseas market picked up, and international giants raised their prices to boost market confidence.
Currently, 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 combined market share of approximately 46%.
From the supply side, since the decline of titanium ore prices in 2012, the world's major titanium ore suppliers have significantly reduced their capital expenditures. From 2013 to 2018, there were almost no new mines in the world, and some of them were gradually approaching mining in production mines. At the end of the day, 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 five years, supporting the global titanium dioxide price.
At present, some dealers and most of the downstream enterprises have low stocks, and there is demand for replenishment. This round of price increases has basically been settled. Under the joint action of the price increase of titanium dioxide, high-grade titanium ore and rutile have relatively high expectations, and high-grade titanium ore continues to maintain a short supply, and international miners may also raise prices.
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%. From March to May, it will enter the traditional consumption season of the industry, and the price of titanium dioxide is expected to continue to rise.
In addition, as the northern downstream industry gradually resumes work, this part of the demand is thawed in large areas, and the continuity required for the supply side to rise strongly is strengthened.
At the beginning of March, the domestic titanium dioxide price market was firm and up. The industry believes that the backbone enterprises have led the rise for more than half a month. In February, the profit of the company has increased. The actual orders of the holders have risen. Don’t be obsessed with it, with the relay in March continue to rise. Some people are slowly convinced that the moment is the most cherished price. In the short term, the comprehensive price of titanium dioxide is firm or firm, and the actual transaction price is a single discussion. On March 7th, Longli, Zhongli Titanium and White Titanium Dioxide companies again issued price adjustment letters. Panzhihua Group Chengdu Vanadium and Titanium and Shandong Daon Titanium Co., Ltd. also issued price adjustment letters on March 7 respectively. Subsequently, 16 domestic titanium white enterprises will also be adjusted in price, officially opening a new round of price increase this year.