2017 Titanium Dioxide Market Review (Part Two)

Introduction: The Chinese titanium dioxide market was extraordinary in 2017. The strict environmental protection supervision influenced the operating rate and also promoted the supply and demand. Challenges and opportunities were full of the 2017.

5.Titanium Dioxide Market Price Hit a Five-Year High

In 2017, the Chinese titanium dioxide market showed an inverted V shape. The highest price appeared in May and the average price of rutile titanium dioxide was RMB 19,250/mt, hitting a new high high since April 2012. The increasing export market and better supply and demand. With the environmental protection supervision, the overall operating rate in the Chinese titanium dioxide market was low, and the supply declined. Moreover, the demand from the foreign market increased. The Chinese titanium dioxide market continued moving up in H1 2017. In H2 2017, the overall demand fell, and some producers reduced prices to promote sales. The overall market move down.         

6. Industrial Profits Got Better

The Chinese titanium dioxide market saw better profits in 2017. The average profit was over RMB 2,000/mt. In mid-2017, the profit hit a new high to RMB 5,000/mt. In H2 2017, titanium dioxide prices went down. And the prices of LNG increased greatly, which weighed on the production cost of producers. The profit was still around RMB 3,000/mt. Some superior producers saw high profits. Sometimes the profits reached RMB 4,000-5,000/mt. According to the data, the revenue of Lomon Billions in the first three quarters was 7,553 million RMB, up 272% year on year. The net profit was 1,921 million RMB, jumping 1508% year on year. The revenue of CNNC Hua Yuan Titanium Dioxide in the first three quarters was 2,508 million RMB, up 71.67% year on year. The net profit was 306 million RMB, jumping 558.44% year on year.    

7.Chinese Producers Targeted the Foreign Market

In 2017, Chinese titanium dioxide producers changed the marketing strategy and some producers started to eye the international market. The first-lass producers exported around 40%-50% goods to the global market. Second-class and third-class producers export 20%-30% goods to the global market.

As for the export destinations, countries in Southeast Asia, Europe and America and South America were the major importers. With the development of India and Brazil, the demand for titanium dioxide was increasing. As for the European and American markets, the demand for Chinese-made titanium dioxide was firm as some backward units were eliminated in 2015.  

According to ECHEMI’s data, Brazil imported 41.5kt of titanium dioxide in the first nine months of 2017, increasing 30.68% year on year. India imported 58.2kt of titanium dioxide, ranking the first place. France imported 17.8kt of titanium dioxide from China, jumping 184.36% year on year.      

8. Integration Degree Improved in 2017

In October 2016, Lomon Billions completed the merger and its capacity became the fourth in the global market and the first in the Asian market. Then Lomon Billions planned to purchase the 100% shares of Panzhihua Ruierxin by 190 million RMB. After the acquisition,Ruierxin will provide aroun 480kt titanium ore resources. In February, the Lomon Billions’ 200kt/a unit (chlorination process) started work. The competitiveness strengthened.

In the global market, Tronox announced to purchase Cristal Gobal in February 2017. Tronox will have 11 titanium dioxide plants in 8 countries. The total capacity will be 1,300kt/a. Though the merger isn’t done, the centralization degree will increase.