The price of titanium dioxide, TDI, and MDI will increase in the market outlook or even crazy!

With the approval of the State Council, Sinochem Corporation and China National Chemical Corporation will implement a joint reorganization. In the joint reorganization, a new company was established where the State-owned Assets Supervision and Administration Commission represented the State Council to perform the responsibilities of investor, and Sinochem Group and China National Chemical Corporation were integrated into the new company.

It is worth noting that after the reorganization of the two Fortune 500 central enterprises, the total assets can reach 1.4 trillion yuan, and the operating income can reach 1 trillion yuan. Such a scale is a large group company whether it is domestic or international. Some people in the industry call it "Chinese Deification." At the same time, the birth of "Chinese Deification" accelerated the formation of the "oligarch" pattern in the chemical industry, and further consolidated its market voice. According to the Coatings Purchasing Network, in the chemical industry such as MDI, TDI, and PTA, due to high technical thresholds, fewer companies in the industry, and large market shares of leading companies, large companies basically occupy an "oligopoly" position, and their output and prices are relatively important to the market. The market has a decisive influence.

MDI: Wanhua, BASF, and Covestro account for 64% of total production capacity
MDI is a highly concentrated product with high technical barriers. In 2020, the global MDI production capacity has reached 9.49 million tons. The world’s top three suppliers account for 64% of the global production capacity, followed by Wanhua Chemical, BASF, and Covestro. The domestic MDI supply and demand imbalance will become more severe in the next 3-5 years. . After the reorganization of Wanhua Chemical’s assets, Wanhua Chemical’s global share was as high as 27.4%. Its MDI production capacity reached 2.6 million tons/year, BASF’s MDI production capacity was 1.92 million tons/year, accounting for 20.23%, and Covestro’s production capacity was 1.57 million tons/year. , Accounting for 16.54%.

In 2007, Wanhua Chemical and Mengbaihe reached a cooperation. In 2017, the price of MDI continued to soar, from the average price of 13,600 CNY/ton in 2016 to the average price of 26,451 CNY/ton in 2017, even in September 2017. It hit a sky-high price of 43,000 CNY/ton on 15th.

TDI: BASF, Covestro, Wanhua, Yantai Juli account for 73% of total production capacity

At present, the global TDI industry is in an oligopolistic pattern. In 2020, the total global production capacity will be 3.503 million tons. BASF, Covestro, Wanhua Chemical, and Yantai Juli occupy the top four with 86, 81, 65, and 230,000 tons/year respectively. , The industry’s top four shares account for up to 73%.

According to incomplete statistics from the paint procurement website, China’s TDI design capacity will be 1.39 million tons in 2021, and China’s TDI output will be 1.0813 million tons in 2020, an increase of 553,000 tons over 2011, an increase of 104.79%, and an average annual growth rate of 22.75%.

Titanium dioxide: Tenuo, Chemours, Lomon Billion, Venator [formerly Huntsman], Connors accounted for 58% of the total production capacity

The world's total production capacity of titanium dioxide is approximately 8.685 million tons per year. The production capacity of the titanium dioxide industry is highly concentrated and presents an oligopoly situation. The global titanium dioxide companies are mainly concentrated in Tenuo (16.82%), Chemours (14.5%), Lomon Bailey United (11.02%), venator [formerly Huntsman] (9.28%), Connors (6.38%) In the hands of the five companies, a total share of 58% of the global production capacity.
According to incomplete statistics from the Paint Purchasing Network, my country's titanium dioxide production capacity will reach 4.17 million tons in 2020. In terms of production capacity, the largest market share of my country's titanium dioxide industry is Lomon Baili. In recent years, with Lomon Baili's acquisition of small and medium-sized titanium dioxide companies, it will occupy 24.22% of the domestic market share in 2020. China Nuclear Titanium Dioxide ranks second with a total production capacity of 340,000 tons, accounting for 8.39% of the domestic market share.

From the perspective of new capacity, compared with the future overseas titanium dioxide market, there will be almost no new capacity. It is estimated that from 2021 to 2023, my country’s titanium dioxide market will have 940,000 tons of new capacity, of which 480,000 tons of new capacity will be added by the chlorination process. The sulfuric acid process has a production capacity of 460,000 tons. In 2022, my country's new production capacity of titanium dioxide will be the largest, which is expected to reach 680,000 tons.

It is expected that after 2023, after the release of new production capacity in China's titanium dioxide industry, the Matthew effect in China's titanium dioxide market will intensify, Lomonbly will continue to maintain the No. 1 market share, and the market share of other small-capacity companies will have varying degrees Decrease, small-capacity enterprises in the industry may face the risk of elimination.

PTA: Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, Fu Chemical Trading, and Xinfengming account for 71.85% of total production capacity
PTA belongs to the basic bulk commodity industry with relatively high industry thresholds and greater investment demand. Basically, some companies in my country’s PTA industry currently occupy an oligarchic position and can intervene in market prices. In 2020, domestic production capacity will be 50.62 million tons/year, Hengli Petrochemical will be 11.6 million tons/year, Rongsheng Petrochemical will be 7.04 million tons/year, Hengyi Petrochemical will be 8.83 million tons/year, Fu Chemical Trade will be 4.5 million tons/year, Xinfengming 4.4 million tons/year, the top five in the industry accounted for 71.85%. Some stockholders in the discussion forum of a stock trading platform said that if the PTA industry can "cover the sky with one hand", it must belong to Yisheng Petrochemical, known as the "universe factory". The name Yisheng comes from the name combination of two listed companies, Hengyi and Rongsheng, for which Yisheng Hengyi is the largest shareholder.
It is understood that Yisheng Petrochemical, which accounts for 40% of the domestic PTA market share, was jointly funded by two major listed companies, namely Hengyi Petrochemical and Rongsheng Petrochemical.
Acrylic acid: BASF, Dow Chemical, Nippon Shokubai, LG Chem, Arkema account for 58% of total production capacity

The global acrylic acid production capacity is 8 million tons. From the perspective of production companies, the top five companies with the largest acrylic acid production capacity in the world are BASF, Dow Chemical, Nippon Shokubai, LG Chem, and Arkema. Their production capacity accounted for 19%, 13%, 11%, 8% and 7% of the world's total production capacity, respectively, and the industry's top five production capacity accounted for 58%.

Adipic acid: Chongqing Huafeng, Shenma Group, Jiangsu Haili, Shandong Haili, and Hualu Hengsheng account for 77.6% of total production capacity
The production capacity of adipic acid in my country is expanding rapidly, and the operating rate remains low. With the continuous maturity of my country's adipic acid process development and the gradual manifestation of its cost advantages, my country has become the world's largest producer of adipic acid, with a production capacity of approximately 2.655 million tons, accounting for 54% of the world's total. The survival of the fittest in the industry has further improved the concentration. In recent years, as my country's environmental protection has become stricter and market competition has intensified, manufacturers lacking competitive advantages in the industry have been forced to suspend or reduce production under pressure, and the industry concentration has further increased. The top five production capacity of my country’s adipic acid industry accounted for 77.6%. Chongqing Huafeng (23.5%), Shenma Group (28.9%), Jiangsu Haili (11%), Shandong Haili (8.3%), Hualu Hengsheng (5.9%) and other large-scale enterprises as the representative of a multi-strong oligopoly pattern.

Silicone: Hesheng Silicon Industry, Bluestar Group, Zhangjiagang Base, Xin'an Co., Ltd., Shandong Dongyue accounted for 60.01% of total production capacity
From the perspective of production concentration, the global organic silicon monomers present a monopolistic competition pattern. The global organic silicon monomer production capacity is about 5.535 million tons per year. The global organic silicon monomers are mainly concentrated in Dow Corning, Momentive, China Bluestar, Germany's WACKER and Japan's Shin-Etsu, the world's five largest companies, account for approximately 46% of the world's total production capacity of silicone monomers. The "Twelfth Five-Year Plan" of the silicone industry clearly stipulates that the new scale of silicone monomers needs to be more than 100,000 tons. Calculated based on the investment of 100 million yuan per 10,000 tons of monomers, the investment of new monomers is 1 billion For new entrants above RMB, the funding barrier is relatively high.

The "oligarch" pattern is gradually becoming, leading companies' voice and pricing power are further stabilized
As we all know, my country's coatings industry is currently in a state of chaos, and vicious competition among enterprises is very obvious. However, its upstream industries are basically in a state of highly concentrated production capacity, and companies have very strong market pricing power, which is very beneficial to the development of the company itself, but it is not a good thing for downstream industries. Regardless of whether it is the titanium dioxide industry, the TDI industry, the MDI industry or the PTA industry, they are all industries with a high concentration of production capacity. The prices of these products are not determined by market demand, but are completely based on the "demand" of major companies. If these oligarchs form a joint force again, the downstream companies will suffer.
Yunnan Dahutong Titanium Industry Co., Ltd. issued a price increase notice stating that starting from April 1, the rutile series products will be increased by 1,000 CNY/ton on the basis of the original price, and the anatase series products will be increased by 1,500 CNY/ton on the basis of the original price, and rutile will be exported. The series of products will be raised by US$150/ton from the original price, and the export of anatase series products will be raised by US$200/ton from the original price.

Ningbo Xinfu Titanium Dioxide Co., Ltd. issued a price increase notice stating that starting from April 1, rutile titanium dioxide will be increased by 1,000 CNY/ton on the basis of the original price, and the export price will be increased by 150 US dollars/ton.

Lomon Baili: All types of titanium dioxide will be increased by 1,000 CNY/ton for domestic customers and 150 dollars/ton for international customers.

Wanhua Chemical: Water-based PU resin will be increased by RMB 2000-5000/ton.

CITIC Titanium: Starting from April 1, domestic titanium dioxide will be raised by 1,500 CNY/ton, and overseas titanium dioxide will be raised by US$200/ton.

At present, in the chemical industry as a whole, price increases are no longer a market behavior. How to increase, how much, and when to increase depends on the "mood" of oligarchs. Under this kind of market structure, the later price increases may be even more crazy. In short, they can find one reason after another that you can't refuse.