Titanium dioxide ushered in the first round of 2016 price increase

On January 6, Shandong Dongjia and Guangdong Huiyun Titanium both announced that they would increase the price of rutile titanium dioxide by RMB 300/ton. In addition, Sichuan Dragonfly, the leading exporter of titanium dioxide, announced on the same day that all products are priced at RMB 300/ton based on the current price. The company’s Titanium Dioxide Analyst Yang Xun revealed that as of January 7, 10 domestic manufacturers announced that they had raised product prices, ranging from 200 yuan to 500 yuan/ton. The titanium dioxide market ushered in the first favorable year in 2016.

More companies are expected to follow up prices

With the major domestic companies have announced price increases, rutile titanium dioxide products mainstream prices are now at 10,000 yuan / ton (including tax).

The price increase this time is the result of both internal and external factors. At the end of 2015, the Titanium Dioxide International's Big 5 announced that it has collectively raised prices from US$150 to US$200 per ton on January 1st, 2016, and Sichuan’s Longmax’s maintenance and production restrictions have made it possible for domestic companies to increase their prices. The producers in Jiangsu and Guangxi took the lead to increase their product prices by RMB 200-300/ton, followed by several companies.

Judging from the current market conditions, titanium dioxide manufacturers have obvious polarization, and producers with better quality and brands have tighter sources of supply and production pressure is slightly higher. Some orders have been scheduled for production in March. While other manufacturers take the goods still weak, the operating rate is low. At present, the mainstream prices of most domestic sulfuric acid rutile and anatase titanium dioxide are 9300 yuan -10,600 yuan / ton and 8,300 yuan - 9,500 yuan / ton (both include tax), the price span increases.

Yang Xun believes that no matter whether the downstream demand is good or bad, affected by the impact of the Sichuan Long Yao, the nationwide producers may gradually increase the price, which may be around 300 yuan/ton.

Supply and demand situation is expected to improve

Cinda Securities pointed out that this price increase can be regarded as a bottoming price rebound. Titanium dioxide prices have remained low in recent years, and the entire industry is losing money. According to the data, due to the price decrease, among the listed titanium dioxide companies that are currently reporting performance forecasts, except for the expected increase in net profit, China Unicom Titanium Dioxide and Anadar expect to lose money for the entire year, with a loss of 50 million yuan each -6000. Ten thousand yuan and 115 million - 125 million yuan.

In 2015, the global demand for titanium dioxide was low, and titanium dioxide companies shut down production capacity and operating rate fell to adapt to the market. Overseas titanium dioxide enterprises shut down production capacity of about 320,000 tons, of which Kemu, Huntsman and Teno shut down 150,000 tons, 100,000 tons and 70,000 tons, respectively, and the total nominal titanium dioxide production capacity overseas decreased from 4.415 million tons to 409.5 tons. Ten thousand tons, the operating rate fell to varying degrees. Although large domestic manufacturers have supported export orders, they have also failed to meet full production capacity. The phenomenon of small plants half-opening has been widespread.

Brokerage analysts pointed out that with the implementation of real estate destocking and supply-side reform policies, the industry supply and demand situation is expected to be improved to some extent. In terms of environmental protection, titanium dioxide, the largest inorganic chemical in the three wastes, is under the supervision of environmental protection under high pressure. According to the industrial structure adjustment guidance catalogue, the state will encourage the chlorination method and limit the new sulfuric acid method titanium dioxide. In addition, under the prevention and control of titanium dioxide pollution, the requirements for the pollution control of sulfuric acid titanium dioxide, solid waste disposal and comprehensive utilization will be increased, which will increase the cost of the company.

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