China Drying Network News Since the beginning of this year, there have been four turning points in the price of titanium dioxide in China. The frequency of market fluctuations is the highest in the calendar year. Overcapacity and speculative mentality of manufacturers, lack of high-end product and brand awareness, and low industrial concentration have brought more uncertainties to the titanium dioxide market. Titanium dioxide market will continue to fluctuate in the future. This is the information that the reporter obtained from the 2012 national titanium dioxide industry annual meeting held in Nanning, Guangxi from November 30 to December 1.
Sharp increase in production capacity lowers prices
According to reports, in 2003 the national titanium dioxide production capacity was only about 550,000 tons, after 8 years of development, China's titanium dioxide production capacity in 2011 was 2.62 million tons, an increase of more than 370%, with an average annual growth of 21.4%. It is expected that by 2015, all projects planned for construction, under construction, and expansion will be completed, and the production capacity will reach 4.2 million tons.
In 2011, the overall price of titanium dioxide was good, and the profit rate of the industry was relatively high. The operating rate of the manufacturers was also generally high. The annual output was 1.813 million tons, an increase of 21.1% over the previous year.
However, the market for titanium dioxide in 2012 is no longer in sight. Downstream industry growth slowed significantly, causing the titanium dioxide market to fluctuate. From January to September, the output was 1.31 million tons. The output of many large-scale enterprises was lower than the same period of last year, and the output of some small-scale enterprises was higher than the same period of last year. Titanium dioxide production is expected to reach 1.85 million tons in 2012, an increase of less than 5%.
According to Cai Xubo, general manager of Good Pigment Supermarket, this year's titanium dioxide market has experienced first-to-last March rises and then falls. May's weakness has stabilized and the overall decline from July to August has been followed by a stable price consolidation after October. At present, the overall trend of titanium dioxide showed low stability, rutile titanium dioxide manufacturers offer 17,400 yuan / ton, the mainstream of anatase titanium dioxide manufacturers offer 14,800 yuan / ton. The prices of titanium dioxide in this year from January to November are now four inflection points. The overall market for titanium dioxide shows a downward trend and the price reduction is nearly 1,500 yuan/ton.
Increasing dependence on exports
The import volume of titanium dioxide in China has been greater than the export volume until 2010, until the import and export in June 2010 was basically the same. In 2011, the import and export structure of titanium dioxide had undergone a fundamental change. On the basis of stable import volume, the export volume has been on the rise, making China the first time a net exporter of titanium dioxide.
From January to September this year, China imported a total of 119,600 tons of titanium dioxide, a decrease of 75,600 tons compared with the same period last year, a decrease of 38.7%; exports of titanium dioxide 316,200 tons, compared with the same period last year, an increase of 9836 tons, an increase of 3.2%.
Although the apparent consumption of titanium dioxide in China keeps growing, the output is still far greater than the consumption, and the dependence on foreign markets continues to increase. However, due to the global economic downturn, China's titanium dioxide import volume is gradually decreasing, while exports are also not optimistic, even for consecutive months of negative growth. Exports in March were the highest in the year, and exports in April, June, July and August were negative.
The poor export situation has put more pressure on the domestic market. In addition, titanium dioxide abroad to accelerate the shipment to seize the Chinese market, also adopted a price reduction promotion strategy, resulting in more intense market competition in the titanium dioxide industry. Export dependence has added an important constraint to market conditions.
Raw material supply constraints
In 4 years, China's titanium dioxide production capacity will increase from 2.62 million tons in 2011 to 4.2 million tons in 2015, with an annual growth rate of 12.5% ​​or more. Only titanium dioxide industry demand for titanium concentrate will reach 6.9 million in 2015. More than tons. If coupled with the demand for titanium sponge and other industries, it is expected that China's total demand for titanium concentrate will exceed 7.5 million tons in 2015, an increase of up to 83% compared with 2011.
China's titanium concentrates are mainly distributed in Panzhihua, Yunnan, Hainan and the "Guangguang" region. However, due to over-exploitation and environmental protection in the past two years, the output of titanium concentrates in these areas has declined. The output of domestic titanium concentrate cannot meet the demand, and imported titanium concentrate has accounted for 50% of the total domestic demand. The Vietnamese government has banned the export of titanium ore since July 1, 2012. In August 2012, China imported a total of approximately 21.77 million tons of titanium concentrate, a decrease of nearly 99,000 tons compared to July.
China’s dependence on foreign titanium concentrates will increase. In the foreseeable time, the supply of foreign titanium concentrate will account for over 60% of China's total demand. With the implementation of the ban on exports from Vietnam mines, the supply of titanium ore in China will become more tense in the short term. This is a big constraint for the titanium dioxide market.
Another raw material sulfuric acid market fluctuations this year, the consumption of 4 tons of sulfuric acid per ton of titanium dioxide, sulfuric acid price fluctuations directly led to market price fluctuations in titanium dioxide. At present, the domestic sulfuric acid market remains weak and the 98% sulfuric acid mainstream price is already below 350 yuan/ton.
Volatility adjustment will continue
From the financial report of the listed companies in the titanium dioxide industry for the first three quarters, it can be seen that the revenue and profits have fallen sharply, and inventory has increased significantly. Therefore, the market for titanium dioxide will be more intense in the short term. Bi Sheng, director of the National Titanium Dioxide Center of the National Chemical Productivity Promotion Center, predicts that from the end of 2012 to the beginning of next year, the market for titanium dioxide will decline slightly from the first half of the year. Industry insiders also generally believe that the overall rise of the industry will come in the middle of 2013 with the recovery of downstream demand.
The reduction of corporate inventories and the rise in raw material prices will push up the price of titanium dioxide, which will rise to a certain extent. Weak downstream demand will not be able to support and prices will decline. Therefore, people in the industry predict that the future titanium dioxide consumption market will slow down; in 2013, it will be able to fluctuate in the medium range; titanium dioxide production capacity will exceed 40%, and the situation will be difficult to improve in the short term. The overall operating rate of the industry will exceed 70%. Oversupply.
Cai Xubo believes that a large number of distributors are currently using the opaque industry information to exaggerate and distort market demand and supply information. They have aggravated the market volatility through stock selling and centralized selling. The pattern of two (heads, markets) and intermediate (capacity) is the root cause of the fluctuation of the titanium dioxide market, and the existing distribution model exacerbates the volatility. This determines that the price of titanium dioxide will fluctuate within 2 years.
With the development of e-commerce technology, the proportion of titanium dioxide online transactions will gradually increase in the next few years, which will play a certain role in stabilizing the market.
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