Recently, many titanium dioxide companies such as Longbai Group (002601.SZ), Jinpu Titanium Industry (000545.SZ), and CNNC Titanium Dioxide (002145.SZ) have successively released price adjustment information and announced an increase in titanium dioxide prices.
The main reason for the price increase of titanium dioxide companies is that the prices of raw materials titanium ore and sulfuric acid have been running at high levels, and manufacturers have greater cost pressure. From September to October, the terminal peak season is approaching. With seasonal support from the demand side, price stability may still be maintained.
On September 19, Longbai Group announced that the sales prices of the company’s various models of titanium dioxide will be increased for various domestic customers. In addition, CNNC Titanium Dioxide also issued a price increase announcement. Based on the current domestic and foreign titanium dioxide market conditions, the company’s price committee has decided to comprehensively increase the sales prices of all types of titanium dioxide in the company starting from September 19, 2023.
CNNC Titanium Dioxide stated that it will closely track the price trend of titanium dioxide and changes in supply and demand, and make timely adjustments to the price of titanium dioxide products. It also stated that the comprehensive increase in the sales prices of its main products will help further enhance the company’s sustainable profitability, improve the company’s market position and influence, and is expected to have a positive impact on the company’s operating results.
The raw materials of titanium dioxide, titanium concentrate and sulfuric acid, account for about 50%. The price trends of the above two products are both in the historical high range of prices in the past ten years. Especially last year, due to multiple factors, international commodity prices such as crude oil continued to rise, and domestic prices of basic materials such as sulfuric acid and chlorine experienced periodic surges, which also led to a significant increase in the cost of titanium dioxide raw materials. Titanium concentrate, another important raw material for titanium dioxide, has also seen a surge. According to statistics, from the beginning of 2022 to the end of November, the national average price of 46% titanium concentrate increased by 12.99%, a year-on-year increase of 57.75%.
Raw material prices are high and cost pressures still exist. The operating rate of manufacturers is at a high level, and the annual maintenance plans of individual companies in southwest China have been postponed. Enterprise prices have tentatively increased, some manufacturers have closed orders and refused to accept orders, and export prices have also tentatively increased in line with domestic prices. After the downstream orders are received in stages, they will enter a consolidation period and mostly maintain rigid-need purchases. Some downstream stockpiles are stocking up before the holiday, but overall demand is average.
Although the profits of titanium dioxide companies generally declined in the first half of the year, with the active promotion of real estate stabilization policies and the gradual recovery of the global economy, the downstream demand for titanium dioxide is expected to improve.
In the long run, titanium dioxide has many application scenarios. With the development of the global economy and the improvement of people’s living standards, especially the development of industrialization and urbanization in developing countries with large populations, the demand for titanium dioxide products will continue to grow. The global demand for coatings and paints is growing. At the same time, the huge inventory and renovation demand in the domestic real estate industry have also driven the growth in demand for coatings and paints, becoming an additional driving force for the growth of the titanium dioxide market.
Data from the China Coatings Industry Association shows that my country’s coatings production is expected to reach 30 million tons by 2025, with a compound growth rate of 4.96% from 2021 to 2025. In the future, as the real estate boom improves, it is expected to further boost demand for titanium dioxide and drive titanium dioxide demand. White powder prices rise.
In addition, Longbai Group stated that with the implementation of environmental protection policies, environmental protection costs have increased, and small and medium-sized manufacturers have been forced to shut down or limit production. At the same time, leading titanium dioxide manufacturers with core chlorination technology will enjoy the competitive advantages brought by favorable policies, thereby further increasing their market share. Therefore, it is expected that the number of titanium dioxide manufacturers will decrease, while the production capacity of a single manufacturer may increase.
Longbai Group believes that as the titanium dioxide market continues to develop, titanium dioxide manufacturers (especially leading companies) have been working hard to integrate the industrial chain, involving upstream titanium ore mining, titanium concentrate processing, high titanium slag smelting and synthetic rutile production , midstream production of titanium dioxide products and other by-products, and downstream product development. Integrating the industrial chain will help reduce production costs, expand product structure and enrich revenue sources.
CNNC Titanium Dioxide stated that it is expected that the titanium dioxide industry will continue to operate in a stable and weak manner with supply and demand operating at a high level in the second half of 2023. The leading international market position, the casting and consolidation of the operating advantages of leading enterprises, and the introduction of a series of policies for the domestic real estate industry will help the domestic titanium dioxide industry accelerate the clearance of new and old production capacity and restore the industry’s profitability.
Post time: Oct-08-2023