[introduction] in the second half of the year, if the domestic market wants to survive the Murphy's law in the off-season of the industry in July and August, it will naturally grasp the "true fragrance law" in the traditional peak season of "golden nine silver ten", and it will also face the turning point of the cycle that may come in November and December and beyond. It is enough to see that the domestic market will be intertwined with long and short periods in the second half of the year, and the evolution of the market may be as wonderful as "rising for 11 months in a row". However, from the perspective of changes in supply and demand and cost, the upward momentum of prices in the peak season is limited, and there is a downward risk of 1000-2000 yuan / ton in the off-season of the fourth quarter.
We follow the time line of "the traditional peak season in September and October, the off-season in July and August, the turning point in November and December and beyond" to discuss the formation and forecast of future price, starting from the key variables of supply and demand, cost and expectation.
First of all, let's look at supply and demand. From July to August, affected by the relative weakening of demand, there is a possibility that domestic supply will continue to ease, which will be reflected in the improvement of inventory level at the production end. At present, this may have a prominent performance in small and medium-sized production enterprises; During this period, the demand entered the traditional off-season, and the actual consumption showed contraction. Taking the coating industry as an example, the consumption of architectural coatings decreased due to the decrease of coating strength, and the consumption of industrial coatings such as automotive coatings decreased due to the shortage of chips and the off-season rule. In addition, the external demand started to perform poorly since late May, and the performance of foreign supply side continued to ease, From the perspective of supply and demand, the price of domestic Titanium Dioxide market was under pressure before the arrival of the traditional peak season in September.
The traditional consumption peak season of "golden nine silver ten" will directly support the price of titanium dioxide from the demand side, while the supply side will passively boost the price. Before the end of the peak season, both supply and demand sides can provide action for the price. However, under the influence of high prices, the total demand, including external demand, will not have a great growth momentum, so the actual increase in the peak season is expected to be around 1000 yuan / ton, And from the current domestic production enterprises' rising behavior, we can not rule out the possibility of distinguishing the growth rate of domestic and foreign trade at that time, that is, there is the expectation that the growth rate of foreign trade is less than that of domestic trade under the favorable market.
After the peak season, the industry and the market are facing the situation of large-scale new capacity release, and the supply side is expected to expand rapidly. However, there is no clear growth route for domestic and foreign demand. Therefore, if the new capacity currently planned is released on schedule in November and after, the market price of titanium dioxide will be significantly under pressure, The cost mentioned in the following article may no longer provide strong support for the price of titanium dioxide. If the price increase does not exceed 1000 yuan / ton in the peak season, there is a downward space of 1000-2000 yuan / ton in the second half of the peak season.
At this point in the discussion, readers can observe the impact of the above supply and demand pattern on prices through some key data listed below. On the demand side: the China International Coatings Conference held in Chuzhou, Anhui Province in early April 2021 pointed out the overall development goal of the coatings industry during the "14th five year plan": during the "14th five year plan", the total economic output of the whole industry maintained a steady growth, with an average annual growth rate of about 4%, and the total output is expected to grow to about 30 million tons according to this growth rate; Coatings industry accounts for more than 60% of the consumption in the downstream industry of titanium dioxide. About the supply side: according to the statistics in the "Zhuo Chuang information 2020-2021 annual report of China titanium dioxide market", by the end of June 2022, the domestic titanium dioxide industry will have a new capacity of about 405000 tons, including sulfuric ACID rutile and chlorination production capacity with high certainty. According to the current whole process capacity calculation, the expansion speed of the supply side in the next year will exceed 11%.
Let's look at the cost side. According to the conclusion of "miscellaneous talks on titanium concentrate and titanium dioxide (IV): Discussion on price correlation and linear regression", supply and demand are the main variables for the formation or evolution of titanium dioxide long-term price, followed by the cost side. According to the above time line of supply and demand analysis and prediction, the future titanium dioxide price is forecasted from the perspective of cost, Because of the stronger correlation with titanium dioxide and a larger proportion of production cost, we mainly select the price of titanium concentrate as the key variable to affect the price of titanium dioxide.
On the basis of the continuous and significant short supply pattern in the domestic market since the third quarter of 2020, the domestic titanium concentrate market will still maintain a tight supply side state before the "golden nine silver ten" peak season. From the data of titanium concentrate output, import and export volume and titanium dioxide output, there is still a supply gap in the domestic titanium market in May. Before the end of the peak season, under the assumption that the production load of titanium dioxide does not appear to be concentrated and reduced in a wide range, the price rate of titanium concentrate will maintain a high level, and there is no significant rise and fall space in the short term“ Before the end of the traditional "golden nine silver ten" peak season, the supply and demand pattern of titanium dioxide will not change from quantity to quality. Therefore, according to the above cost analysis, the firm price of titanium concentrate will provide support for the titanium dioxide Market during the period. In other words, the cost side will play a role in bottoming out the titanium dioxide price during the off-season from July to August, The latter is less likely to fall by more than 1000 yuan.
After the peak season, it was mentioned that the titanium dioxide industry has the expectation of large-scale new capacity release, and the supply and demand pattern of the industry is expected to change from "tight balance of supply and demand" to "loose supply", Even if the ore price tends to stabilize or rise, the titanium dioxide sector does not rule out the possibility of price decline, and the prices of titanium ore and titanium dioxide may again show a historical differentiation trend, as shown in Figure 9 from the middle of 2017 to the middle of 2018, and then from the middle of 2019 to the end of the first quarter of 2020, The key variables that affect the price trend of titanium dioxide may be transferred from the cost side of titanium concentrate price to the long-term supply and demand game.
Further, with reference to the conclusion of "miscellaneous talks on titanium dioxide and titanium concentrate (III): price characteristics and cycle evolution", and along with the change of domestic industry supply and demand pattern, we consider two expected factors of price bearish: the expectation of alleviating the epidemic situation in major titanium dioxide producing areas abroad under the continuous promotion of vaccination process, the expectation of reducing the epidemic situation in major titanium dioxide producing areas abroad, and the expectation of reducing the price bearish We can boldly guess that in 3-6 months, the domestic titanium dioxide industry may usher in the turning point of the upward phase of this cycle.
To sum up, we can see that in the second half of the year, the price will be adjusted slightly from July to August, about 500 yuan / ton in the first half of the peak season. During the "golden nine silver ten" period, the price will be slightly strong, and it is expected that there will be an increase of 1000 yuan / ton. On the whole, the upward power of titanium dioxide price before the end of the peak season is limited; After the peak season, the supporting effect of cost on the price of titanium dioxide may be weakened, and the downward space from November to December will temporarily remain at the above expectation of 1000-2000 yuan / ton.
