In the past June, the domestic titanium dioxide market continued to be weak, with prices still under pressure and approaching production costs.
Taking the sulfuric ACID method rutile type titanium dioxide, which has a large sales volume in the domestic market, as an example, the domestic titanium dioxide market continued to decline in June. On June 1st, the average price of titanium dioxide was 16366.67 yuan/ton. On June 30th, the average price of titanium dioxide was 15850 yuan/ton, with a price reduction of 3.16% during the cycle. As of now, most domestic sulfuric acid based rutile titanium dioxide quotations range from 15300 yuan/ton to 16200 yuan/ton; The quotation for rutile titanium dioxide is around 14500 yuan/ton to 15300 yuan/ton.
The mainstream negotiation reference range for the domestic rutile titanium dioxide market in June was between 15000 yuan/ton and 15300 yuan/ton, a decrease of 1100 yuan/ton from the end of last month.
The main reason for the price decline in the titanium dioxide market in June still comes from the demand side. The paint industry is still in a low demand season, with a lack of incremental demand. At the same time, the issue of preliminary anti-dumping rulings by the European Union has affected market sentiment. The market's wait-and-see sentiment intensified in the first half of June, and exports were also affected to some extent. The bearish sentiment in the market has intensified, and the inventory of domestic titanium dioxide enterprises is high and the decline is slow.
On June 13th, the initial draft of the European Commission's anti-dumping duty on Chinese titanium dioxide showed that an anti-dumping tax rate of 14.4% to 39.7% would be imposed on Chinese titanium dioxide. Except for the 14.4% imposed on Jinxing Group, other companies would be subject to taxes ranging from 35% to 39.7%.
The higher anti-dumping tax rate has to some extent led to changes in the supply of domestic rutile titanium dioxide to the European Union. From the export situation from January to May this year, some EU countries and regions have purchased titanium dioxide from China, which is close to the full year quantity of 2023. In the short term, the impact on the EU is limited. For Chinese titanium dioxide factories, excessively high tax rates will have a change in the future export market structure.
Tariffs have temporarily deprived Chinese titanium dioxide of its price advantage, which may result in a loss of market share, but this supply gap will be balanced by other producers. The price increase of titanium dioxide may stimulate some demand and boost market morale.
In June, domestic titanium dioxide enterprises faced not only unsatisfactory demand and high inventory, but also high cost pressure.
In June, the domestic sulfuric acid market prices showed an upward trend. On June 1st, the average price of domestic sulfuric acid was 247.5 yuan/ton, and on June 30th, the average price was 260 yuan/ton. The price increased by 5.05% within the month. In June, some acid plants in certain regions were still under maintenance, and the supply of sulfuric acid remained tight, resulting in a slight increase in prices; The recent increase in raw material sulfur prices has provided support for the cost of sulfuric acid, and the sulfuric acid market is in good condition in the short term.
At present, some titanium dioxide companies have chosen to reduce production to avoid greater risk of losses due to the slow decline in inventory despite market prices reaching the cost line. Due to the limited reduction in production in June and the scarcity of comprehensive parking and maintenance, the overall supply still appears to be very abundant. Downstream enthusiasm for stocking up is not high, and a cautious and wait-and-see attitude should be maintained. But as we enter July, the situation of domestic titanium dioxide enterprises stopping for maintenance and reducing production is more common. Most mainstream production enterprises in Shandong region have maintained a state of reduced production or entered the stage of shutdown and maintenance, with some enterprises maintaining a stable production load in July. The situation of production stoppages and reductions in East and Central China has also significantly increased compared to June. Apart from leading enterprises maintaining stable production loads, most enterprises have entered a state of production reduction or shutdown.
In recent years, due to various reasons such as power grid maintenance, manufacturers in Southwest and East China have plans to reduce production and maintenance, which has a significant impact on supply. At the end of June, the market entered a price sensitive period, and many manufacturers did not adjust prices. They also basically determined the short-term price trend, and some end users gradually began purchasing plans.
In June, the price of titanium concentrate in the Panxi region first fell and then stabilized, while the price of sulfuric acid in the market increased. In the later period, the cost pressure on titanium dioxide increased. The downstream market demand continues to be weak, and the market trading situation is light. Transactions are cautious and cautious, and titanium dioxide enterprises are under significant pressure to ship. It is expected that the trend of titanium dioxide will be weak and stable in the short term.
Due to the strong bearish sentiment in the early stage, the inventory of traders and downstream factories is mostly controlled at a low level. In July, with the decrease in production, downstream stocking enthusiasm will gradually increase, and inventory is expected to decrease to a reasonable level.
