Titanium dioxide price increases are highly certain

Titanium dioxide prices go up all the way

On November 10, the leading titanium dioxide company Lomon Baili raised its quotation. The latest quotation of sulfuric acid rutile series titanium dioxide was 16,500 CNY/ton, an increase of 10%. This is the price increase of Lomon Baili without letter since November 6. The second price increase in the following months.

In fact, the price of titanium dioxide has been rising since entering the Golden Nine and Silver Ten, during which it has experienced at least 6 sharp price increases. Moreover, the industry’s price increase has formed a “hidden rule”: small and medium titanium dioxide companies will try to increase prices first, and then leading companies, especially leading export companies, will send letters to profit. In the end, most companies in the industry will implement price increases.

Recently, according to sources, after Lomon Baili adjusted the increase again, major manufacturers indicated that they would increase again at a certain time, and the range may be 500 CNY/ton-800 CNY/ton.

Balance the impact of the supply side, leading the expansion of the layout

The main reason for the price increase of titanium dioxide is that the global source of titanium concentrates is gradually decreasing, the overall output is limited, and the raw material end titanium ore factories have begun to overhaul, resulting in a decrease in the supply of titanium ore. In this context, market demand is increasing, and the limited production of titanium concentrates cannot plug the gap in demand. In addition, the high operating rate of titanium dioxide companies has further exacerbated the tight supply of raw materials. It is reported that since September, the price of titanium concentrate has continued to rise, and the current price has reached RMB 1850-1880/ton, which has risen by about RMB 400/ton compared to the beginning of September, and has reached a nearly three-year high.

The soaring price of raw material titanium ore has put a lot of pressure on the production cost of titanium dioxide enterprises. In addition to raising the price of titanium dioxide products in order to maintain profitability, leading titanium dioxide companies have begun to extend their upstream layout and increase their control over upstream raw material prices.

At present, the two leading titanium dioxide companies have issued announcements to extend their layout upstream. CNNC Titanium Dioxide plans to jointly fund the establishment of Xinjiang Desheng New Material Technology Co., Ltd. with Xinjiang Xiangsheng Hami Ruitai. The business scope of Xinjiang Xiangsheng involves the production and sales of titanium tetrachloride and commercial titanium; the research and development, manufacturing and sales of titanium alloy extension products, while the business scope of Hami Ruitai includes the mining of iron ore and titanium; the processing and smelting of mineral products.

Lomon Baili announced in September that Sichuan Lomon Mining and Metallurgical, a wholly-owned subsidiary of the company, intends to establish a joint venture vanadium and titanium resources with Panguo Investment, Gangcheng Group, Vanadium and Titanium Investment Fund, and Anning Co., Ltd. to stabilize vanadium and titanium resources in Panzhihua. Prices of mineral products. On July 4 this year, Lubei Chemical issued an announcement stating that Lubei Chemical intends to acquire 100% equity in Jinhai Titanium and Xianghai Titanium for a total of 1.4 billion yuan.

Demand rises, price hikes may continue

At the moment, it is in the peak season of the titanium dioxide industry, real estate delivery pressure is increasing, automobile sales are increasing month by month, and the domestic demand for titanium dioxide continues to increase significantly. In addition, the situation of foreign epidemic recurrence is severe, and the willingness to increase the production capacity of titanium dioxide is not strong. Therefore, the export situation of titanium dioxide is improving. According to customs data, the export volume of titanium dioxide in September 2020 is about 111,835, a year-on-year increase of 33.45%. The cumulative export volume from January to September 2020 increased by 22.75% year-on-year.

Industry insiders said that the current upstream and downstream of the titanium dioxide industry chain are bullish. On the one hand, the supply of factories is tight, and some major factories have closed the sales. On the other hand, the downstream also hope to stock up at low prices, and are currently purchasing production materials for the fourth quarter. And among them, traders also have the willingness to stock up, and they are bullish on the market outlook, hoping to make a price difference. The price of titanium ore will continue to rise in the later period, and titanium dioxide companies will inevitably increase their profitability accordingly.

Recently, many concept stocks have increased significantly

Affected by the continued increase in the price of titanium dioxide, in recent days, the concept of titanium dioxide in A shares has been active. On Friday's trading day, Jinpu Titanium almost opened its daily limit at the opening, and this week has achieved three consecutive boards; Pangang Vanadium Titanium has a daily limit within half an hour of opening. In addition, the share prices of leading stocks Lomon Baili and China Nuclear Titanium Dioxide have also increased by more than 10% this week. Among them, Lomon Baili’s increase during the year has reached 106.04%, achieving a double increase.

Judging from the performance of the three quarterly reports, the first three quarters of Anning, Anada, China Nuclear Titanium Dioxide and Triumph Technology achieved year-on-year growth. Up to now, 3 titanium dioxide concept stocks have issued annual report performance forecasts. Anada's forecasted annual report net profit lower limit is 60 million yuan, an increase of 85.28% year-on-year; Tianyuan Group forecasts an annual report net profit lower limit of 40 million yuan, a year-on-year decrease of 49.21 %.

Jinpu Titanium announced that its annual report net profit will lose at least 51 million yuan, a year-on-year decrease of 305%.

IFC Securities believes that on the demand side, foreign exports and domestic demand are good. Most exports are spot cash transactions, and manufacturers have more orders; on the supply side, the domestic market is tight, and some types of titanium dioxide are currently out of stock; At the end, the price of upstream titanium ore is high, and enterprises, especially the anatase titanium dioxide enterprises are under great pressure, and the high price of raw materials supports the price of titanium dioxide. Titanium dioxide spot prices are still tight under the high price of titanium ore. It is expected that the price of titanium dioxide will continue to rise steadily in the short term.