How long can the titanium dioxide market be hot?

After China Nuclear Titanium Dioxide issued a price increase letter on May 6, starting the fifth round of price increases in the titanium dioxide market during the year, many companies have joined the price increase army. On May 12, CITIC Titanium issued a titanium dioxide price adjustment letter, announcing that it would raise the price of CR series chlorinated titanium dioxide for domestic customers by 1,000 CNY/ton. So far, 21 titanium dioxide manufacturers have issued price adjustment letters since May.
　　
Affected by the resumption of work and production in downstream industries worldwide, starting from July 2020, the titanium dioxide industry has carried out 6 rounds of price increases, from 12,800 CNY/ton to 17,700 CNY/ton. In 2021, the price increase will continue unabated. Leading companies such as Lomon Baili and China Nuclear Titanium Dioxide have launched five rounds of price increases, and the rutile titanium dioxide has risen to 21566.67 CNY/ton.

The TITANIUM dioxide market has continuously increased prices in the past 11 months. Is it the continuation of the high market boom or the final "supply and demand game"?

New high, domestic production capacity reached 3.512 million tons
　　
Recently, "full production and full sales" has become the norm for Titanium Dioxide manufacturers. Lomon Baili and Jinpu Titanium indicated to investors on the interactive platform that titanium dioxide is being produced at full capacity.
　　
Judging from the titanium dioxide export data released by the General Administration of Customs of the People’s Republic of China, every March is the "hoarding season" for downstream manufacturers of titanium dioxide. From 2019 to March of 2021, the export volume of titanium dioxide reached 98 million kg and 1.57 respectively. Billion kilograms and 127 million kilograms, reaching the highest value of exports during the year. On the whole, since August 2020, the monthly export volume of titanium dioxide has basically stabilized at more than 100 million kilograms, which is generally higher than the same period in 2019.

The dual pressures of cost and demand forced the production capacity of titanium dioxide manufacturers to upgrade, and domestic production capacity reached a new high. Guosen Securities Industry Research Report shows that in 2020, the comprehensive annual output of 42 full-process titanium dioxide production enterprises in my country will reach 3.512 million tons, a year-on-year increase of 10.39%; the national chloride production of titanium dioxide will reach nearly 320,000 tons, achieving a "double breakthrough" The historical record is the first time in history that it has exceeded the 300,000-ton mark, and it is also the first time that the proportion of rutile titanium dioxide in the production of rutile titanium dioxide has exceeded 10%.
　　
In the spot market, titanium dioxide has become the biggest winner among chemical products. In the capital market, how long can the popularity of titanium dioxide last? Guosen Securities believes that titanium dioxide is an important global commodity, and global demand is still in a trend of continuous improvement. It is optimistic that the domestic titanium dioxide industry will maintain a high level of prosperity throughout the year.
　　
A stock analyst said: "At present, many manufacturers have scheduled orders to June and July, and inventory is tight. It is expected that the titanium dioxide sector will maintain a high level of prosperity in the second quarter, but the medium and long-term market is still unclear."

The "Matthew Effect" is obvious, and the scale effect differentiates a 10% gross profit margin
　　
As a raw material-grade chemical product, the "Matthew effect" of the domestic titanium dioxide industry is obvious, presenting a situation of "the strong will always be strong, and the weak will always be weak".
　　
Titanium dioxide production enterprises with an annual production capacity of more than 100,000 tons, in terms of production capacity, in 2020, Lomon Baili has the largest production capacity with an annual production capacity of 866,000 tons; China Nuclear Titanium Dioxide plus two companies affiliated with China Nuclear Power have annual production capacity A total of 480,000 tons, ranking second in the industry; Shandong Dongjia with an annual production capacity of 160,000 tons...It can be seen that the production capacity of titanium dioxide companies after Lomon Baili has a fault distribution, showing a "dominant one" situation.

From the perspective of market share, Lomon Bailey is also the absolute leader in the industry, with a domestic market share of 22%; the second-ranked China Nuclear Titanium Dioxide has a market share of only 5.6%; the large-scale titanium in the industry The market share of the white powder manufacturers Jinpu Titanium Industry and Anada is only 4% and 2.7%; a number of small and medium-sized enterprises have jointly filled the surplus domestic market.

Behind the "Matthew Effect", the scale effect is the real "catalyst". According to the gross profit margin of listed companies in the first quarter of 2021, the gross profit margins of Lomon Bailey and China Nuclear Titanium Dioxide are respectively 36.15% and 34.28%, which are more than 10% higher than midstream companies Gimpo Titanium and Anadar, and the profitability gap is significant. In response to investors’ doubts about the difference in the company’s gross profit margin, Lubei Chemical said: “Lemonbright has upstream titanium concentrate resources and is a leading enterprise with large production capacity, raw material cost advantages and industrial scale advantages, so its gross profit The interest rate is higher."
　　
If non-leading companies with low margins want to gain a foothold in market competition, they also need to develop new ideas for industrial upgrading. China Nuclear Titanium Dioxide, which ranks second in the industry, relies on its unique "green cycle" concept, which uses the "waste acid cycle" to absorb the waste acid generated and develops the lithium iron phosphate business. Data show that China Nuclear Titanium Dioxide is continuously narrowing the gap in gross profit margin with Lomon Baili. In the first quarter of 2021, the gross profit margin of China Nuclear Titanium Dioxide is only 1.86% lower than that of Lomon Baili.

Do not fight for scale and technology, "chlorination process" has become a battleground for military strategists

The scale of competition has been set. How can midstream companies catch up?
　　
Titanium dioxide import data disclosed by China Customs shows that from 2020 until now, China has imported up to 18 million kilograms of titanium dioxide from abroad each month, while the maximum amount exported abroad has reached 157 million kilograms, and the export volume is much higher than the import volume. But from the perspective of price, the highest monthly average price of exported titanium dioxide is 15.78 yuan/kg, while the highest import price is 20.57 yuan/kg, the price difference is obvious.
　　
Lomon Bailey said: "At present, a large part of the high-grade chlorination titanium dioxide demanded in China depends on imports. The high-grade chlorination titanium dioxide has been in short supply, and the market for the chlorination titanium dioxide is huge."

In the field of titanium dioxide production, the chloride method is the general trend of titanium dioxide production in the future. The chemical nature of titanium dioxide is titanium dioxide, which can be produced by Sulfuric Acid method and chloride method. The raw materials of sulfuric acid method are titanium concentrate and sulfuric acid, and the raw materials of chloride method are high-titanium slag and chlorine, which belong to a clean process. Environmental scholars believe that the chlorination method should replace the sulfuric acid method.
　　
In fact, in addition to environmental protection advantages, chlorinated titanium dioxide also has quality advantages. In an interview, Zhang Chuantao, a distributor of Lomon Baili Shandong Province, said: "The whiteness of chlorinated titanium dioxide is better than that of sulfuric acid, and the hue is bluish. It is mainly used for automotive coatings, high-end plastics, and some ordinary coatings. The high-end products of He Plastics cannot be replaced by sulfuric acid titanium dioxide, and the price will be higher.” According to China Chemical Network, the reference price of chloride titanium dioxide is 24,000 CNY/ton, which is 2000 higher per ton than sulfuric acid titanium dioxide. yuan. Tianyuan Group also said: "To meet the demand for high-end products, we still need to firmly follow the chlorination process route."
　　
At present, the domestic listed companies that have the production process of chlorination titanium dioxide are Lomon Baili, Tianyuan Co., Ltd., Fan Steel Vanadium and Titanium, with annual production capacity of 360,000 tons, 50,000 tons, and 15,000 tons. Among them, Tianyuan shares are in To build a chlorinated titanium dioxide production line with an annual output of 50,000 tons, Lomon Baili newly built a chlorinated titanium dioxide production line with an annual output of 200,000 tons, and China Nuclear Titanium Dioxide has also built a chlorinated titanium dioxide technical team.
　　
The concentrated actions of enterprises in the industry indicate that the production line of titanium dioxide chloride has become a battleground for the future capital layout of enterprises.