The Titanium Dioxide market, where the price has been declining for several months, has recently witnessed a resurgence of manufacturers. The products involved are concentrated in the chlorination process, which is of relatively better quality. Industry analysts believe that due to the high price of upstream raw materials and the continuous sluggish demand of downstream, some manufacturers of titanium dioxide have experienced cost inversion and obvious price bottom support. However, the titanium dioxide market in the fourth quarter is still facing a weak demand situation, and the space for price recovery is still insufficient.
Letter of Market Resurrection Price Increase
After a long period of silence, the price of titanium dioxide market rose again.
On October 10, CITIC issued a price increase letter, proposing to raise the price of CR series chlorinated titanium dioxide from October 15. Among them, each brand in the domestic market will be increased by 1000-2000 yuan/ton, and each brand in the overseas market will be increased by 100-150 dollars/ton. Downstream dealers are very sensitive to the change of market price. Before CITIC Titanium released the price adjustment information, on September 29, Yibin Tianyuan Products Group Co., Ltd. announced that the sales price of different grades of chlorinated titanium dioxide would be increased by 800 yuan/ton from that day, and the international market would be increased by 100 dollars/ton.
The reason why the manufacturers of titanium dioxide from chlorination process have been paying attention to the price increase is mainly because the price of titanium dioxide has been falling for several months due to the continuous sluggish downstream market.
The price level of titanium dioxide in 2022 will generally rise first and then fall. It will reach the highest value at the beginning of April 2022. The price of rutile produced by sulfuric ACID process will be 20500 yuan/ton, while the current price is the lowest, at 17000 yuan/ton. The decline of chlorinated titanium dioxide is about 3000-4000 yuan/ton. Before the National Day holiday, the mainstream prices of most domestic rutile and anatase titanium dioxide produced by sulfuric acid process were 16000-18000 yuan/ton and 14000-15000 yuan/ton, and the mainstream prices of domestic and imported rutile titanium dioxide produced by chlorination process were 21000-23500 yuan/ton and 31500-36000 yuan/ton according to their uses (all the above are cash ex warehouse prices including tax).
At present, the market quotation of chlorinated titanium dioxide has reached 17000 yuan/ton, which is the price of sulfuric acid titanium dioxide before. Before May this year, the industry price was still at a high point, reaching 22000 yuan/ton. However, after entering the summer, the market price kept moving down, with a cumulative decrease of about 5000 yuan/ton. At present, the market is gradually entering the off-season. Influenced by the low price of rutile titanium dioxide produced by sulfuric acid process, the price of titanium dioxide produced by chlorination process also continues to decline, resulting in some manufacturers suffering from cost pressure, production suspension and semi production, and the supply side has shrunk recently.
At present, the reduction in the supply side of chlorinated titanium dioxide is about 20% of the overall supply. In addition to the supply reduction factors, the manufacturers have an obvious desire to raise prices, which is also the main reason to stimulate the recent rise.
Compared with titanium dioxide produced by sulfuric acid process, the contradiction between supply and demand of titanium dioxide produced by chlorination process in the market is relatively small. In the case of supply contraction and relatively stable demand, the market supports the price rise to a certain extent.
The data shows that the output of chlorinated titanium dioxide from January to September 2022 is about 390000 tons, with an average monthly output of 43500 tons. Influenced by factors such as declining domestic and foreign market demand, power limitation, and heavy pressure on enterprises to ship, the market price of chlorinated titanium dioxide has dropped significantly, and manufacturers have reduced production by different extents, and some manufacturers have maintained production suspension. In August and September, the monthly output of chlorination method was even less than 30000 tons, which was lower than that in the first half of the month, and the market supply was reduced.
Cost support appears
In recent months, the price continued to decline, making the profitability of titanium dioxide manufacturers much worse than before, and some small and medium-sized manufacturers suffered losses.
At present, the market of titanium concentrate, the two important raw materials for titanium dioxide production, is strong. The price of sulfuric acid in Shandong, Henan, Yunnan, Guangxi and other regions has rebounded slightly. The cost of 90% of titanium dioxide producers without raw materials remains high. A certain proportion of manufacturers are in a state of cost inversion, especially most of the manufacturers of chlorinated titanium dioxide. At this stage, a considerable number of manufacturers do not have much inventory, and active and passive production restriction and shutdown are relatively concentrated. Although the market is still weak, the market situation is changing quietly. Because the price level is too low, some manufacturers do not want to continue the deep inversion. It is not ruled out that they will get responses from manufacturers in the same situation and of the same type.
At present, there is no profit in the production of titanium dioxide by sulfuric acid method, and some manufacturers even suffer from cost inversion. The profitability of chlorination method is relatively good, but it has decreased a lot compared with the previous period, and the profit margin is not obvious. At present, the upstream cost of titanium dioxide is obviously supported, and the market price has fallen to a support level. The manufacturer also hopes to stabilize the price.
For the future market, affected by the poor demand for downstream real estate, the market price of sulfuric acid titanium dioxide is expected to remain weak in the later period. The supply side of the market is not significantly reduced, the manufacturer's inventory pressure is large, and the possibility of price rise is unlikely. It is expected that the market will continue to operate weakly and the contradiction between supply and demand will be prominent.
In terms of chlorinated titanium dioxide, although the manufacturer is willing to increase the price at present, the price increase still needs time to digest in combination with the actual transaction situation of the market and the reaction of downstream buyers. At present, the market is still mainly stable. In the future, the overall price decline space is not large, and the cost support is strong, but the demand in the fourth quarter is weak, and the price action is still insufficient.
It is easy to see from the price market in recent months that the current demand situation in the peak season is less than expected. The terminal customers generally operate at low storage locations, purchase frequently, and demand support is weak. Therefore, the price market of titanium dioxide remains weak. However, despite the weak market, the range of price adjustment has become smaller and smaller, and the willingness to adjust prices has become worse and worse, indicating that the downward space for manufacturers is very limited.
More than half of the peak season, although the demand enthusiasm was far less than expected, the overall shipment and order volume were higher than in August. The price market is still weak due to the combination of various factors. Even if some titanium dioxide producers stop production and guarantee the price, there will be no obvious reversal effect in a large range. It is expected that the price of sulfuric acid method will remain weak, and the price of chlorination method will rebound slightly.
