Why the price of China titanium dioxide rise up to the highest level of recent 10 years?
What is function of Titanium Dioxide in paint, ink and plastics?
Titanium dioxide is mainly used raw material in formulation of coatings, ink and plastics. 60% of the application of titanium dioxide is in coating globally , especially rutile titanium dioxide. The paint with titanium dioxide as raw material has high hiding power, bright colors, high tinting power, and low dosage.,etc. It can protect the stability of paint, enhance the adhesion and mechanical strength of paint film. It can also prevent ultraviolet rays, the cracks and moisture penetration, which can extend the life of the paint film.
What is latest situation of titanium dioxide production in China?
As per statistics, there are 41 full-process producers of titanium dioxide can maintain normal production across China and their output can reach 3.18 million tons, with a year-on-year increase of 7.69%.
Till 2019, in the total capacity of 3,180,000 tons titanium dioxide, Rutile titanium dioxide has an output of 2,545,000 tons,which accounts for 80.01%; Anatase titanium dioxide has an output of 518,000 tons, which accounts for 16.28%; Non pigment grade and other grades have an output of 118,000 tons, which account for 3.71%
From the area of production output, the area mainly focuses in Sichuan, Anhui, and Shandong. They are the top three in China’s titanium dioxide production capacity. From the statistics of China’s titanium dioxide production areas, from January to November 2019, Sichuan, Shandong, and Anhui ranked the top three in titanium dioxide production, accounting for 22%, 17%, and 12% of the total domestic production, respectively.
With the quality improvement of China’s titanium dioxide and shortage in capacity of foreign titanium dioxide, the export of China titanium dioxide have continued to increase in recent years. In 2018, export volume has reached 907,200 tons. The countries exported to include the United States, India and Brazil. In terms of imports, China’s annual import of titanium dioxide was around 209,200 tons. The main countries imported from are Mexico, Australia, the United Kingdom, etc. The titanium dioxide imported are mainly medium and high-end grades. Following is the change of import and export volume from year 2010 to 2019.
How is the sharp increase of TIO2 price since Year 2020?
In 2020, the annual production capacity of titanium dioxide in China has reached 4,17 0,000tons. The largest producer in China Titanium Dioxide industry is Lomon Billion in terms of production capacity. In recent years, Lomon Billions has started the acquisition of small and medium-sized titanium dioxide companies with a total capacity over 1,000,000 tons and has occupied 24.22% of the total market share in China by 2020. The market share of CNNC ranks second in China, with a total output of 340,000tons, which accounts for 8.39% of the total market share.
From the end of March to mid-April 2021, the price of titanium dioxide in China has new increases . The top companies both in China and Abroad have announced new price increase together, and many titanium dioxide producers have issued price increase notice to customers, such as Lomon Billion Titanium Dioxide, Huiyun Titanium Dioxide, CNNC Titanium Dioxide, and Jinpu Titanium Dioxide.,etc. In general, from July 2020,the price of titanium dioxide has risen for 10 months continuously. And the price has reached a new high since 2018, which is close to the level in year 2010.
Since July 2020, with the price increase of titanium ore, and the recovery of domestic and foreign demand, the price of titanium dioxide has gradually risen from the early stumble. Till Q1 of 2021, the TIO2 price gets three consecutive increases. The top company has issued price increase announcements for 7 consecutive times. This drives the price increase the the whole titanium dioxide industry. It also shows there is a steady boom in the titanium dioxide industry.
As per China Media, the EXW price of main suppliers of Rutile TiO2 in China is around RMB18200-19800 per ton in March, price of anatase titnaium dioxide is around RMB15000-16500 per ton, and price of Chloride grade Titanium Dioxide is RMB 19000-20700 per ton.
What are the main reasons for the price rising of Titanium Dioxide from China since 2020?
In general, there are mainly two supporting aspects in this round of price recovery in the titanium dioxide industry. The first reason is the fast increase of oversea demand. Coating and paint market is the major market for titanium dioxide. For example, in the United States, the number of newly built private residential houses have hit a record high in 2020. Meanwhile, the overseas capacity supply and the operation rate of titanium dioxide is limited due to Covid 19. These have formed a strong pull on the export of China’s titanium dioxide. The second reason is that there is a downturn in the titanium dioxide industry during the past few years , and the global and China titanium dioxide giants have accelerated acquisitions and mergers, which leads to a high industry concentration in titanium dioxide..
From the global TiO2 capacity perspective, the market share of global giant leaders has decreased and China TIO2 suppliers have speed up their seizing of overseas markets. Affected by the Covid 19, both sales and production of major global titanium dioxide manufacturers has declined. The sales growth rates of Tronox,Chemours, Venator and Kronos in the first year of 2020 were: -12%,+5%, -11% and -14% respectively. Chinese companies accelerated seizing of global market share of titanium dioxide. The supply of global TIO2 leaders will be still limited, and there is very less new titanium dioxide supply volume from China.
But with the gradual recovery of main global economies, the demand for TIO2 is going up. Also, both real estate in China and US are on the increasing side. So, it is expected that the total global demand on titanium dioxide will be higher than in 2020 by 7-8%. The intensity and sustainability of 2021 titanium dioxide boom is very optimistic.
From January to March 2021, the output of China titanium dioxide was 943,000 tons, and the year-on-year increase is 41.5%; and export quantity was 201,000 tons, and the year-on-year increase is 15.5%; The import volume of titanium ore from January to February was 631,000 tons, and the year-on-year increase is 14.8%. The global titanium dioxide manufacturers are not stable in output due to raw material problems, but downstream demand is increasing globally. Coupled with price increase of Titnaium ore and slag, the titanium dioxide price is about to break through the historical highs.Now It is just-needed stocking season from end-users, and the orders from major paint manufacturers in Q2 are signed at high prices. It is expected that the titanium dioxide industry will maintain a high boom Q1 and Q2 of 2021.
Till currently, the price of titanium dioxide is around USD3100-3200 from different factories, and the production plan is till May and June. The price still remains high. The local demand from China and overseas demand keeps stable, most China suppliers of titanium dioxide are still positive with the price trend in Q3 and Q4 of 2021. Meanwhile, the environmental control in Shandong and Anhui province will make the supply still be short, and there is still price increase space in the coming months.
In addition to the factors of foreign demand and raw material increase, China’s production capacity upgrade is another major driving factor that has led to such a fierce price increase cycle for titanium dioxide.
According to datas, China has the largest production capacity of titanium dioxide in the Asia-Pacific region. In 2019, the production capacity of China’s titanium dioxide has accounted for 45.3% of the global total production capacity. But from the perspective of capacity of a single company, there are still many small companies with an annual capacity less than 100,000 tons.
According to the statistics, by the end of 2020, China has 42 full-process titanium dioxide production companies. Among them, 12 titanium dioxide enterprises have an output over 100,000 tons in 2020, and 30 of them have production capacity less than 100,000 tons. The total production capacity of titanium dioxide from those who produce more than 100,000 tons is around 2.5722 million tons. It accounts for 73.24% of the total output in China titanium dioxide industry in 2020.
As per industry expert, the titanium dioxide companies in China are in the stage of prodcution line upgrade and capacity expansion at present. Now the production process of titanium dioxide is still dominated by the sulfuric acid method, and around 42.5% of the global titanium dioxide are produced by the chloride process. But in China, there are 84% of the production capacity by sulfuric acid method which has high pollution. With China’s environmental protection policies becoming stricter, many small production lines have been shut down, and the construction speed of new production capacity has also been restricted. Thus, the total production capacity by sulfuric acid method has declined in recent years.
In addition, from 2021 to 2023,there is almost no new global titanium dioxide capacity in other countries. Along with production line upgrade and supply reduction, the Matthew effect will be intensified globally.
What would be the price trend of China Titanium Dioxide for the Q2,Q3,Q4 of 2021?
From current supply and demand situation in China and abroad, the price would still be remaining on higher side. As the supply situation out of China is still in tight, with Covid-19 situation becomes more serious in some countries. And there would be new demand comes up after economy recovery from those countries with better control and vaccine taking. Let’s expect a more virtuous supply and demand circle in titanium dioxide industry and chemical industry.