The energy crisis in Europe continues to ferment, resulting in the reduction and shutdown of many local chemicals. According to relevant industry data, the production capacity of Titanium Dioxide in Europe has been reduced to 20% of the total load.
Will the reduction of titanium dioxide production capacity in Europe drive domestic and foreign sales? The energy crisis has little impact on titanium dioxide raw materials, mainly due to the shortage of natural gas and the shortage of fuel. Although the production capacity of titanium dioxide in Europe is reduced, the high-end chlorination products are not replaced by sulfuric ACID titanium dioxide in China. It is difficult to say how many orders this crisis can increase for domestic sulfuric acid enterprises.
Recently, the price of titanium dioxide has been stable at 15500 yuan / ton - 17000 yuan / ton. The overall operation of the enterprise is not high, and the intention to reduce production and ensure price is obvious. At present, the export situation is normal. Since the beginning of this year, China's titanium dioxide export situation has been good. It is estimated that the impact of the energy crisis in Europe will not appear until at least the fourth quarter.
The production capacity of titanium dioxide was at a low level in the year. In July this year, due to the sluggish downstream demand, the price of titanium dioxide continued to decline, and the price of various titanium dioxide dropped by 2000 yuan / ton in a month. It is worth noting that while the price fell sharply, the average operating rate of titanium dioxide in July was 71.6, down 5.64% month on month and 8.56% year on year. This means that titanium dioxide enterprises have been reducing production and ensuring price since the price fell in July. Since August, the operating rate of titanium dioxide has continued to decline. As of August 25, the operating rate of the domestic titanium dioxide industry this week was 65.27%, which was almost the low point of the year. This means that after the two enterprises of tihai technology and Guizhou Shengwei issued the price increase letter on August 16, the price of titanium dioxide only stabilized, and did not bring about the industry recovery. At the current price, the profit margin of the titanium dioxide enterprises by sulfuric acid method is very low. Many enterprises are now making loss, and the price can not be reduced, so they can only reduce production. Moreover, due to the recent power shortage in Sichuan and the off-season of the industry, many titanium dioxide enterprises simply shut down for maintenance, and some factories have closed orders and arranged orders for delivery. From the perspective of raw materials, the prices of titanium concentrate and sulfuric acid continue to fall. As of August 25, 46% of titanium concentrate in Panzhihua was 2050-2205 yuan / ton, down about 5% compared with July. However, the price of sulfuric acid dropped by 140 yuan / ton at most this week. The raw material price of titanium dioxide can no longer support the high-level operation of titanium dioxide. From the demand side, the demand of the downstream construction industry is too poor at present. In August, the main downstream real estate development investment accumulated negative year-on-year growth, and the new construction area continued to fall under pressure. The completion and construction of titanium dioxide from positive to negative year-on-year has no demand support, and the price rebound is difficult.
It is difficult to predict that the titanium dioxide price will remain high in the first half of this year under the condition of limited domestic demand, and the export can not be ignored. According to the latest customs data, according to the customs data, China's titanium dioxide exports in June 2022 were about 124400 tons, up 23.68% year-on-year and 7.53% month on month. From January to June 2022, the cumulative export volume of titanium dioxide was about 746600 tons, with a year-on-year increase of 16.56%, and the export volume increased by about 106100 tons. The export volume of titanium dioxide remained stable. In the first half of the year, the total export volume of titanium dioxide increased steadily compared with that of last year. At present, the domestic and foreign economic pressure is large, and the domestic titanium dioxide export was under pressure in June. Meanwhile, Ananda's relevant personnel also confirmed to the associated press that since August, the export orders of titanium dioxide have not been many and the price is not high. The export price is only 100-200 yuan / ton higher than the domestic sales. At present, among domestic titanium dioxide enterprises, Longbai group, the industry leader, has a large export volume and a high profit. Because the enterprise has mineral resources, Longbai group has a high gross profit of sulfuric acid titanium dioxide. The impact on domestic titanium dioxide enterprises will not be apparent until at least the fourth quarter due to the possible sharp drop in output caused by the current European energy crisis. As titanium dioxide is mainly used for architectural coatings in China, the real estate industry at home and abroad is in a recession, the downstream demand is limited, the paint industry is not operating at a high level, and the raw material inventory in the enterprise at present, the shortage and price rise at the supply side will not appear soon. In addition, if the production is stopped in Europe, the original main market share demand in Europe can be transferred to China, which will certainly be good for our titanium dioxide enterprises. However, the titanium dioxide in Europe is mainly a high-end product of chlorination process, and its use is different from that of sulfuric acid process products. Therefore, it is impossible to estimate how many orders European enterprises will add to our sulfuric acid process enterprises if they stop production in the future.
