EU Tax on Titanium Dioxide Imports from China to Take Effect on January 11

Recently, EU member states officially approved the decision to impose final anti-dumping duties on titanium dioxide (TiO2) imported from China. According to the proposal from the European Commission, Anhui Jinxing Group will face a tariff of €0.25 per kilogram, while Longbai Group's tariff will be €0.74. For companies that cooperated with the investigation, the tax rate is set at €0.64, while other companies will face a rate of €0.74. This tariff measure will take effect on January 11 and will last for five years. Although the final tax rates are lower than the initial proposals, this move will undoubtedly intensify trade tensions between China and Europe.

The EU's anti-dumping investigation into China's titanium dioxide began in November last year, and after eight months, the European Commission announced a preliminary ruling that determined the anti-dumping duty rates based on the dumping margins. Longbai Group's rate was set at 39.7%, Anhui Jinxing Titanium Group at 14.4%, other responding companies at 35%, and non-responding companies at 39.7%. After appeals from over 20 titanium dioxide companies, the EU made concessions before the final ruling, reducing the anti-dumping tax on titanium dioxide from China by about 7% and stating that it would not be applied retroactively.

The final determination of the EU's anti-dumping measures on China's titanium dioxide exports has drawn widespread attention and protests from domestic and international companies. The well-known European coatings company Teknos suggested a phased imposition of the anti-dumping tax to ensure fair competition, while the European Council of Paint, Printing Ink and Artist Colours (CEPE) urged member states to reject the anti-dumping tax on Chinese titanium dioxide. As TiO2 is a core raw material for paint manufacturers, accounting for 40% of raw material costs and 20% of finished product costs, the imposition of anti-dumping duties will severely impact the local coatings industry, especially small businesses and the construction sector.

Additionally, China's titanium dioxide industry faces anti-dumping investigations from other countries and regions, including Brazil, India, and Saudi Arabia, which pose significant obstacles to China's titanium dioxide exports. For instance, Saudi Arabia has initiated an anti-dumping investigation into titanium dioxide originating from China, Brazil has imposed temporary anti-dumping duties on rutile titanium dioxide, and India has also launched an anti-dumping investigation.

China's titanium dioxide export volume has significantly increased in recent years, reaching 1.6416 million tons in 2023, a year-on-year increase of over 63%, primarily exporting to countries such as India, Brazil, Turkey, South Korea, and Russia. However, due to export obstacles and increased tariffs, domestic titanium dioxide manufacturers' performance has also been affected. For example, Vanadium Titanium's net profit in the third quarter dropped by 82.74% year-on-year, Jinpu Titanium's revenue in the first three quarters fell by 4.10% year-on-year, with a net loss exceeding 50 million yuan, and Anada's revenue in the first three quarters decreased by 14.85%, with net profit dropping by 54.68%.

The Chinese titanium dioxide industry currently faces overcapacity, with total capacity expected to exceed 6 million tons in the future. Under the pressure of export restrictions, increased tariffs, and rising costs, the titanium dioxide industry is facing severe challenges. Some companies have already implemented production cuts or shutdowns, and industry operating rates are expected to drop to about 60% in the coming months. Despite this, market prices saw a reduction of 200 yuan/ton in early November, bringing titanium dioxide manufacturers' prices close to the cost line, with some companies even experiencing slight losses. With the rising acid prices in the southwest region, titanium dioxide prices may fluctuate.