Rising demand and rising costs drive the price of titanium dioxide

In terms of chloride titanium dioxide, the production of chloride titanium dioxide was 46,000 tons in August, and the cumulative production from January to August 2023 was 395,000 tons, an increase of 9.3% year-on-year, mainly due to the increase in the production capacity of chloride titanium dioxide of Longbai Group since 2023.

Chart: Monthly production of titanium dioxide in China

In terms of chloride titanium dioxide, the production of chloride titanium dioxide was 46,000 tons in August, and the cumulative production from January to August 2023 was 395,000 tons, an increase of 9.3% year-on-year, mainly due to the increase in the production capacity of chloride titanium dioxide of Longbai Group since 2023.

Chart: monthly export volume of titanium dioxide of our country

From January to July 2023, domestic demand for titanium dioxide declined, and titanium dioxide exports continued to grow rapidly.

Affected by the downward impact of domestic real estate fundamentals, the apparent consumption of domestic titanium dioxide from January to July 2023 fell by 13.6% year-on-year. Benefit from downstream enterprises to replenish storage, overseas part of the titanium dioxide production capacity exit and Chinese titanium dioxide enterprises low-cost advantages, in July our country titanium dioxide exports of 136,000 tons, the same/month growth of 8.0%/8.2%; From January to July 2023, China exported 972,000 tons of titanium dioxide, an increase of 11.4% over the same period last year.

From the perspective of export regions, from January to July 2023, the titanium dioxide exported to India, Brazil, Turkey, South Korea, Russia and other countries was 14.4/6.7/5.7/52/40 thousand tons, an increase of 31%/25%/49%/10%/7.5% year-on-year. From January to July, the titanium dioxide exported to Belgium and Canada was 2.6/16 thousand tons, down 47%/21% year-on-year.

Chart: Titanium Dioxide exports by region, January-July 2023

In the context of the decline in sales of overseas titanium dioxide enterprises, domestic titanium dioxide exports continue to grow rapidly (1H23 Dragon Bai Group titanium dioxide exports increased by 40% year on year to 337,000 tons), we believe that in the global weak demand environment, China’s titanium dioxide competitiveness has improved significantly.

Due to the higher cost of overseas titanium dioxide enterprises leading to weakened competitiveness, the phasing out of some backward devices, and India, Brazil and other developing countries continue to increase demand, we expect China’s titanium dioxide exports will continue to grow.

Chart: Titanium dioxide production enterprise inventory

According to Baichuan Yingfu, due to the decline in the operating rate of titanium ore in Panxi area and the increasing demand for titanium concentrate from July to August, the price of titanium concentrate has risen since the beginning of August. At present, the price of Sichuan Panzhou Iron and Steel (TiO2≥47%) is 2,460 yuan/ton, which is 5% higher than the price in early August. At the same time, the recent rise in international crude oil prices has pushed up the price of sulfuric acid, which has pushed up the production cost of titanium dioxide.

On the demand side, driven by downstream replying demand, titanium dioxide enterprises have increased orders in hand since July, and enterprise inventories have been declining (the current inventory is at the low level since 2022), and some models of titanium dioxide are in tight supply. Driven by rising costs and increasing downstream orders, the price of titanium dioxide gradually rose during the traditional demand off-season from July to August.

Chart: Ilmenite concentrate prices

Titanium dioxide prices are expected to continue to rise, industrial chain integration of enterprise profitability will continue to improve.

At present, titanium dioxide enterprise inventory is at a low level and sufficient orders in hand, while titanium dioxide link profitability is still at a low level, with the rising cost of raw materials to promote, we expect titanium dioxide prices will continue to rise, industry chain integration advantages of leading enterprises profit or will continue to improve.

 （This article is from the Internet）