Leading Titanium Dioxide Companies Increased 5 Times in Half a Year

"Golden Nine and Silver Ten" is the traditional peak season of the titanium dioxide industry. Now the peak season is coming to an end. The titanium dioxide market is still hot and ushered in a new round of price increases.

From October 27th to October 28th, Titanium Dioxide listed companies Anada and China Nuclear Titanium Dioxide increased the sales prices of various types of titanium dioxide. It is worth noting that this price increase is the fifth time that China Nuclear Titanium Dioxide has raised the sales price of its main products since the second half of the year.

Tian Xiaoyu, a titanium dioxide analyst at Zhuo Chuang Information, said in an interview with the "Securities Daily" reporter: "It is expected that the domestic titanium dioxide price will show a steady, moderate and slight decline after the end of this round of price increases until the end of the year."

Many manufacturers have increased prices

Cost and supply and demand are the main reasons

On October 28, China Nuclear Titanium Dioxide announced that starting from October 29, on the basis of the existing sales price of titanium dioxide, the company's various types of titanium dioxide sales prices will be raised. Among them, the sales price for domestic customers was raised by RMB 1,000/ton, and the export price for international customers was raised by USD 180/ton.

China Nuclear Titanium Dioxide and Titanium Dioxide market have the same price increase rhythm. This price increase is the fifth time that the product price has been raised since the second half of the year. Prior to this, the company had successively increased the price of its main product titanium dioxide on July 14, August 7, September 8, and October 10.

"From late October to now, more than 20 titanium dioxide manufacturers have announced price increases, with a maximum increase of 1,200 CNY/ton. It is expected that after this round of increase, the overall market price will be from this year's lowest price of 12,000 CNY/ton. (At the beginning of June) it rose to 14,000 CNY/ton-15,000 CNY/ton.” Tian Xiaoyu said.

Regarding the main reason for this price increase, the relevant person in charge of a domestic titanium dioxide company said in an interview with a reporter from the Securities Daily: "There are two main factors: one is the recovery of demand, and the market is in short supply; the other is titanium dioxide. The price of main raw materials for white powder production has risen, which has led to an increase in product costs."

Tian Xiaoyu also said that the factors affecting the sustained price of titanium dioxide mainly include supply and demand and cost.

Supply and demand are divided into external demand and domestic demand. "From the perspective of external demand, the export volume of titanium dioxide increased significantly in the third quarter. It is expected that the export volume of titanium dioxide in the fourth quarter will decline." Tian Xiaoyu believes. According to customs data, in September 2020, the export volume of titanium dioxide was approximately 111,835 tons, a year-on-year increase of 33.45%. The cumulative export volume from January to September 2020 is approximately 889,624 tons, an increase of 164,869 tons over the same period last year, an increase of 22.75% year-on-year.

"From the perspective of domestic demand, the titanium dioxide market is in short supply during the traditional peak season. The spot is tight, and manufacturers have been pressing goods. Downstream manufacturers have to take 100 tons of goods, while manufacturers only give 50 tons. Manufacturers increase downstream demand. Part." Tian Xiaoyu said.

In terms of cost, the spot of titanium dioxide raw material titanium concentrate is becoming more and more tight, and its price continues to rise sharply. "The increase in the price of titanium concentrate directly increased the production costs of titanium dioxide companies. When the price is close to the cost line, many companies are more enthusiastic to increase prices." Tian Xiaoyu told reporters.

Cost under pressure

China Nuclear Titanium Dioxide Layout Upstream Industry Chain

The continuous rise of ilmenite concentrate is the biggest driver of the upward production cost of enterprises. According to Baichuan Information, mining companies in major titanium concentrate producing areas such as Panzhihua in Sichuan and Yunnan collectively raised their ex-factory prices by 50-100 CNY/ton, of which the price of 46 grade 10 mines rose to 1625 CNY/ton, a 32% increase over the same period last year. It reached a three-year high since the beginning of November 2017.

In the context of high costs, China Nuclear Titanium Dioxide began to deploy upstream. Recently, China Nuclear Titanium Dioxide, Xinjiang Xiangsheng and Hami Ruitai jointly invested to establish Xinjiang Desheng New Material Technology Co., Ltd. (hereinafter referred to as "Xinjiang Desheng"). The company's registered capital is 169.88 million yuan, and China National Nuclear Titanium Dioxide invested 86.638 million yuan, accounting for 51% of the registered capital.

In an interview with the "Securities Daily" reporter, Han Yuchen, Secretary of the Board of China Nuclear Titanium Dioxide, said: "Xinjiang Desheng can form a stable and high-quality supply source for the company in the layout of raw materials, optimize the company's industrial chain layout; at the same time, it can also reduce the company's production costs. Realize profit growth."

One week after Xinjiang Desheng was established, on October 28, it signed the "Investment Promotion Framework Agreement" with the Hami City People's Government, and planned to invest in the construction of a deep processing circular economy with an annual output of 2 million tons of high-quality titanium-rich materials in the Hami City High-tech Zone in Xinjiang. The total investment scale of the industrial park project is about 10 billion yuan.

CNNC Titanium Dioxide stated that the project plan of Xinjiang Desheng, a holding subsidiary, can further deepen the company's strategic layout in the raw material supply chain sector, help the company reduce costs and increase efficiency, and enhance the company's resource integration, industrial layout and comprehensive competitiveness. And other aspects of strength.