【Titanium dioxide】Development of titanium dioxide industry

Looking back at 2022, the development trend of titanium dioxide industry can be roughly summarized as follows:

1.Chlorination titanium dioxide expansion scale is larger, sulphuric acid titanium dioxide due to the downturn in the project slightly shelved;
2.Capacity expansion of major production enterprises makes it easier to achieve production increase targets;
3.Increased awareness of value chain optimization drives industrial capacity expansion;
4.The degree of market competition is increasingly fierce, and the elimination rate of backward production capacity increases.

From the point of view of the annual market comparison, the demand of titanium dioxide industry in 2022 from “grab goods” to “rigid demand”. Domestic market from the consumption structure, 2022 titanium dioxide is still the main downstream coating, accounting for about 59%, followed by plastic (23%), paper (10%), ink (3%), the overall consumption structure has not changed significantly.

In 2022, the domestic demand for titanium dioxide is weak, the industry’s overall apparent consumption fluctuation is mainly affected by the economic environment, the epidemic and the real estate market malaise, the main domestic consumption area is located in East China, the epidemic in Shanghai in early March after the “gold, silver and silver four” peak season demand is directly eliminated, and then also maintain the depressed state of consumption, the annual overall consumption decreased by 27.19% month-on-month.

For overseas markets, according to the recent three years of overseas demand for titanium dioxide found that the Asia-Pacific region grew faster, about 5%, Europe and the United States, the Middle East, Africa stable demand, Latin America slightly recession. In terms of overall overseas demand, the growth rate of total demand in 2022 will be roughly maintained at around 3%.

In contrast to demand, the supply side is showing contrarian growth. In 2022, the profitability of titanium dioxide industry  is not good, small plant expansion projects are difficult to implement due to lack of funds, and the pace of mainstream large plant expansion progress is fast, a major production enterprises in the industry to achieve new capacity landing situation is good, the second quarter of Jiaozuo base new production of 200,000 tons of chloride titanium dioxide, In the third quarter of Kunming base (100,000 tons of chloride titanium dioxide was newly put into production, and in the fourth quarter of Jinchang base 200,000 tons of sulfuric acid titanium dioxide was newly put into production, with a cumulative annual capacity of 500,000 tons, up 50% year-on-year.

In addition, manufacturers in Shandong added 60,000 tons of chlorine titanium dioxide production capacity in April 2022, but due to low market prices, the above 60,000 tons of chloride production capacity has been suspended in the third and fourth quarters of the year, and has not been fully released.

Poor market conditions for titanium dioxide in 2022 have led to increasing inventory overhang. In fact, in the past two years, titanium dioxide enterprise self-built provincial direct warehouse account for more and more high, encountered insufficient market demand to reduce the use of titanium dioxide, must give priority to the normal production of enterprises, in order to avoid factory warehouse and capital backlog problem, enterprises usually through price grab limited market share in as many orders as possible, This naturally transfers the risk to the social inventory. As the market price has been running below the line for a long time, traders and dealers lack of purchasing power, and the actual use of the terminal is not big, the high social inventory situation is difficult to remove.

Titanium dioxide  in coating, ink, paper, plastic rubber, chemical fiber, ceramics and other industries have important uses, the proportion of the above content has been mentioned. Coatings as one of the main consumption areas of titanium dioxide, through market segmentation can include indoor and outdoor building coatings, industrial coatings, Marine and container coatings, powder coatings, special coatings, can/packaging coatings and so on. The main component of titanium dioxide is titanium dioxide, which is an important inorganic chemical pigment. At present, there are two main process routes, sulfuric acid process and chlorination process, which can meet the market demand. For different processes, the leading enterprises in the industry can also produce customized products in order to expand market share and maintain high-end customers. In practical application scenarios, it involves: building decoration, automobile paint and various paints, color masterbatch, paper, cloth textile, printing, cosmetics and medicine production, etc., which shows a high degree of marketization of the industry.

From the perspective of future titanium dioxide industry supply and demand, with the overseas epidemic influence factors gradually weakened, customers and raw material supply gradually recovered, market demand will be expected to return to the epidemic before, but transportation, exchange rate, cost, etc., will continue to affect customer purchasing decisions. With the increase of the price level, the acceptance range of titanium dioxide price of customers will become larger.

The domestic experience of 2021-2022 roller coaster market, titanium dioxide price is high and low, the market has formed a lack of domestic consumption power, need to rely on export to undertake the situation. Single look at the domestic market, because of the poor economic environment, downstream demand is weak, titanium dioxide industry capacity for domestic is oversupply, and China titanium dioxide industry in 2023 capacity expansion is expected to continue, intensified market competition may increase the elimination of small factories.

2023 in the beginning, a wave of manufacturers after the festival “opening red” promotion operation to drive the market trading atmosphere to warm, the real single transaction price in February gradually implemented increases, at the beginning of March, titanium dioxide again strong pull up, is expected to “gold three silver four” market transition after a period of time will usher in the healthy and stable development of the market pattern, Because the current price rise is mainly affected by the cost pressure of the unilateral upward driving force, the real market transition node needs to wait and see the traditional peak season demand to cash the situation can be considered.