chemical plant

Chemical prices plunged in China market

The price of thermal coal has dropped from its highest price of USD312/mt on October 19 to USD166 /mt in the China market. The price is almost down by 47%, nearly half. The price drop of thermal coal also dragged down the price of coal chemicals. Menanwhile, this dropping trend also inspire the spot market . The price of PVC, methanol, styrene, isobutylol, new glutaradiol has a sharp down trend , which makes a surprise in the market.

chemical plant

The price of coal chemical product has fallen sharply with the collapse of coal price

With the Chinese government taking all measures to maintain the steady supply of coal and electricity power, the coal price has dropped accordingly. And this also becomes the key reason for the sudden price dropping in the coal chemicals and other chemical raw material. Epoxy resin has a continuous sharp increase in past months. But its price has lowered down sharply recently. The price of solid epoxy resin is USD4200/MT, which is USD300/MT lower than one week ago. With the price dropping, the downstream customers are expecting lower price at USD4100 or even lower price of USD3950. And this also makes the market transaction atmosphere weak.

 

In addition to the epoxy resin, many other chemicals such as epoxy chlorpropane, phosphate, yellow phosphorus, and butyadiene have a price decline after China’s gold nine silver ten sales season. since early November, prices began to decrease. The price has plunged more than USD1300/MT one wek from USD5080 to USD3780/mt. This makes the whole chemical industry entering into winter before hand. The price of DMC was  USD6300/mt, down by USD1000/mt from the previous week, and the price of silicone oil(Polydimethylsiloxane) was USD6500/mt, which is 34% down from the highest point. Also, The pvc futures has fell five times by the daily limit. With the futures price continued to weaken, it is negative for the spot market. And now the quotation of PVC in future market and spot market two weak spot market was in chaos. In some regions, the price of PVC has dropped to less than USD1400/MT. Under the suppression of falling futures prices, traders are selling stocks immediately.

From the current series of actions of restraining unreasonable price increase of bulk commodities, the price increase expectation of chemical raw materials in next six months is very limited, and most products will gradually return to a reasonable range.

With the impact of the price reduction news, real order is very limited when some enterprises quote at high price. The less transaction also dragged the market down and the expectation of transaction is weakening. Some Industry experts said that one of the reasons for the price decrease is that the new expanded production capacity leads to obvious supply increment. And the buyers has strong bearish mood on the transaction with the supply and demand imbalance.

Chemical products

40 chemical products have drop in price with decrease more than USD130/MT 

With continuous hot increase in the recent chemical market, there are many chemicals with sudden price drop. And many of them are the products with hot increase and reach their historic highest point. This rapid change has made the buyers unpredictable.

The price of liquid ammonia was USD620/MT, and there is a price drop of USD130/MT with 20% less comparing with early August. With the impact of enterprise maintenance and shortage of domestic goods, liquid ammonia experienced a soaring market in mid-to-late July.  But the increase didn’t last long, and the price of liquid ammonia continued to decrease. With the poor traffic situation and high inventory caused by the epidemic, together with the high output at high operating,as well as less demand, the price of liquid ammonia dropped again and again.

Previously, the price of trichloromethane had started a speeding process. The price soared to USD546/MT, and even over USD635/MT. There was a single-day increase at 8.7%, which was the highest one-day increase in past 10 years. But with the high temperature weather cooling down, the demand from the refrigerant market become weak, domestic sales and foreign trade are not as expected, and its raw material liquid chlorine price is low. With all these impacts, trichloromethane prices dropped by 16% from early August.

Since the beginning of 2021, the price of PTA cost-end crude oil and PX has been increasing, and its auxiliary material acetic acid also has significant increase.Till the end of July, the PTA price was more than USD800/MT and some large scale factories even cut orders due to insufficient supply.However, with the operating of new PTA devices, the supply will increase. And now the domestic PTA price has dropped below USD710/MT. Its price has dropped by 13% comparing with the beginning of August.

Due to the influence of Shanxi flood, many urea factories in Jincheng stopped production. With the reduction of the market inventory and other multiple positive factors, the domestic urea spot market had a rise, and the local urea prices hit a new high. But with the end of peak agricultural season, and the industrial demand is insufficient, the market trend of urea is depressed. The price even drooped two times in one day. In order to ensure order volumes, the big factories have offered preferential price policies. Thus, the actual transaction price is much lower than expected, and the price decreased by USD60/MT or 12.37% from the beginning of August.

The export market of domestic MMA has expanded rapidly, and the monthly export volume has reached new highs. With more MMA export, less import and less output, the  market inventory of MMA in China market has decreased sharply, and the price has exceeded USD2222/MT. But by the end of Oct., the buyers are mostly watching and the negotiations were deadlocked.And the price is down by USD270/MT from the beginning of August with a drop around 11%.

Isooctanol prices had soared to USD2950/MT, up by 156% from the same period last year. While due to the weakened raw material price, and the supply increase, its prices also fell slightly.The newest offer is now decreased by USD200/MT with a decrease of 6.9% from early august.

The price of ethylene glycol has rushed to USD950/MT at a new high. But due to the rapid decrease in the downstream polyester end. The market expectation is not optimistic. Along with the supply recovery, the tight market inventory situation has finished. Its current price is down by USD60/MT at around 6% from early August.

It is reported that Wanhua Chemical, BASF, Shanghai Hensmai and Dow Chemical have all raised the price of MDI products. The supply of MDI is also tightening, and its prices have increased from June 2021, soaring from USD1900/MT to USD4500/MT. This price is almost highest in nearly three years. But recently the MDI market atmosphere turned weak and the price can be negotiated. The current market offer has decreased by USD200/MT around 5.64% from early August.

Ethyl acetate prices reached USD1450/MT and is highest in a decade. But the recent transaction price of main factories has declined and the trading atmosphere is not positive. The current price is down by USD80/MT and is around 4.91% lower comparing with early August. The ethyl acetate in China market may continue to weaken in short term.

In the silicone industry, the price is decreasing continuously since early November. DMC price has dropped to USD4900/MT, which is almost half of the price from the highest point in last month. With the DMC price plunging, price of dimethicone silicone oil and 107 RTV also dropped. The newest silicone oil PDMS price is around USD6900/MT. The sudden price drop makes the procurement stop the purchase and those who bought at higher price would have a stock loss.

In the titanium dioxide industry, with the winter coming, the construction coating consumption is decreasing. And the main market price of Rutile titanium dioxide like Lomon 996 is USD3200/MT. Other brands has a price of USD3100 to USD3300. with the demand weakening, the price of titanium dioxide can be negotiated as per the orders.

The organic pigment price also stopped increase and some item has a slight price drawback. The price of pigment yellow 74 has dropped from USD10.95/kg to USD10.50/kg. Products like Pigment Yellow 12 Pigment Yellow 13 also stopped for a further increase.

A collection of price decline of different chemical products

The price of dimethyl carbonate was USD1370/MT, down by USD740/MT from the previous week.

The phosphate price was USD2000/MT, down by USD690/MT from the previous week.

The liquid epoxy resin was quoted at USD5000/MT, down by USD630/mt from the previous week.

The price of propylene glycol was USD3450/MT, down by USD330/MT from the previous week.

DMF was quoted at USD2570/MT, down by USD280/MT from the previous week.

Butadiene was quoted at USD1060/MT, down by USD250/MT from the previous week.

MMA was quoted at USD1960/MT, down by USD20/MT from the previous week.

The price of natural anhydride was USD2400/MT, down by USD130/MT from the previous week.

Liquid chlorine price was USD200/MT, down by USD110/MT the previous week.

The caustic soda price was USD190/MT, down by USD60/MT from the previous week.

Phenol was quoted at USD1500/MT, down by USD60/MT from the previous week.

The PTA was quoted USD770/MT, down by USD56/mt from the previous week.

 

From the above datas, it is not difficult to see that the recent decline in chemical products mainly focuses on the previous chemical products with sharp increase, such as hydroxybenzene, ethylene glycol, polymerized MDI, ethyl acetate, etc. This is also in line with the previous market analysis which says that the chemical products would not always on the rise side and it would come down after it reach the peak.

chemical news

 

Why does the prices of chemical products plunge?

For the sudden plunge of the prices of chemical products, the experts says this is related to the recent huge changes in the chemical industry chain. The supply and demand situation between coal and other energy terminals is quietly changing. The downstream demand is lessening and the goods transportation is blocked in some regions due to heavy snow. All the different reasons to jointly lead to the diving of chemical products prices.

With the upstream raw material coal price has halved, the pressure for the chemical enterprises has been lessened in some degree. But the complex downstream situation still makes the chemical enterprises anxious. With the the end of the year getting closer and closer, the dual control policy on energy consumption is also becoming stricter. With the power limit, the orders  of downstream industry such as coating, plastics, clothing and textile, foreign trade processing industry and other industries are suppressed. So the transaction atmosphere in the market is not positive.

With the accumulation of inventory, the price have a trend of moving downward. With the temperature drop in the fourth quarter, the production and sales of many industries have entered into the off-season, and they have  resistance to the high cost of upstream raw materials. At the same time, with the mentality of buying at rise and not buying at decreasing, the purchase is very limited and a shrinkage in transaction is very obvious. With downstream customers continue to negotiate for discount prices, the market transaction is in dead-block. With the transaction pressure and pessimistic views on the market, some chemical enterprises have prices continuously.

Some chemical enterprises said that for the last two months of 2021, the focus is no longer securing more orders but to maintain a stable capital chain. With the uncertain industry situation, the chemical enterprises choose stabilize the old customers. For the new customers, they will only receive cash orders. They may also limit production and sales to avoid risks and maintain a stable capital chain to the greatest extent. Prices are no longer the key at the present. How to ensure to pass the winter safely and continue to spint in 2022 is the key.

chemical plant

How is the impact of power limit on the chemical industry

Recently,the Dual Control System of Total Energy Consumption and Energy Intensity has lit a Red Light in many provinces of China. The provinces named by the Ministry of Industry and Information Technology have taken measures to solve the energy consumption problem since there is only 4 months to the year end.Guangdong,Jiangsu,and other major chemical provinces made strict policies in limit using of electricity and in limit production to thousands of enterprises.Why there is energy limit and production limit?What impacts will it have to the China chemcial industry?

 

 

Many provinces pull the plug, cut the power and limit the production

Recently, many provinces such as Jiangsu, Guangdong,Yunnan, Qinghai, Ningxia, Henan, Chongqing, Guangxi,Sichuan, Inner Mongolia, Heilongjiang and others started to carry out power control measures of dual energy consumption to meet the control targets.Electricity restriction measure has gradually spread from the central and western regions of China to the eastern Yangtze River Delta and Pearl River Delta, etc.

Henan: The electricity limit will be for more than three weeks for some processing enterprises

Sichuan: Suspension of non-necessary production load, lighting load and office load.

Chongqing: Some factories cut power and stopped production in early August.

Inner Mongolia: The electricity price would be increased by not more than 10%.

Qinghai: An early warning of power limit is announced and the area of power limit continues to expand.

Ningxia: The power for high-level energy-consuming enterprises will be limited for a month.

Shaanxi: The power limit will be extended to the end of the year.Yulin city will limit the production of dual high enterprises to the level of 50-60%,

Yunnan: Two rounds of power limit have been launched. The average monthly output of industrial silicon from September to December shall be limited to less than 10% of August output (i. e., 90% reduction); the average monthly output of yellow phosphorus shall be limited to 10% of August 2021 output (i. e., 90% reduction).

Guangxi: Guangxi has introduced new dual control measures, requiring  enterprises with the production of electrolytic aluminum, aluminum oxide, steel and cement limit their production starting from September

Shandong: there is a power limit of 9 hours daily,mainly at 15:00-24:00, the shortcoming time continued to September,The power limit measures would be implemented

Jiangsu: In early September, Jiangsu Provincial Department of Industry and Information Technology carried out special energy conservation supervision for enterprises with more than 50,000 tons of standard coal annually. In the cluster area of printing and dyeing , more than 1,000 enterprises will produce for two days and stop production for two days.

Zhejiang: Production will be stopped for the key energy-consuming enterprises until September 30.

Anhui: There is a power shortage of 2.5 million kilowatts and it is decided to start an orderly electricity consumption plan from September 22.

Guangdong: From September 16, the electricity plan work for two days and stop for 5 days was implemented

 

 

Reasons for power cut and production limit or shutdown

 

In essence, the power cut is due to the short of coal and power. The national coal output is almost same as 2019, but the power generation is increasing. The the coal inventory of various power plants are significantly in recent years.The reasons behind the coal shortage are as follows:

1.In the early coal supply side reform, open-air coal minesand some small coal mines with safety problems were closed. With good coal demand this year, the coal supply was quite in tight;

2.The export is very good this year, and the electricity consumption from light industry enterprises and low-end manufacturing industry is rising. But the power plants consume large amount of coals. The high price of coal has increased the production cost of power plants, which makes power plants at deficit;

3.The import of coal has changed from Australia to other countries. There is an increase in the import cost and global coal is also at high price.

Following is a diagram of China coal output in recent years

Coal output

 

Why not expand the coal supply, but rather limit the power?

In fact, the total power generation in 2021 is not low.In the first half ofyear 2021, China has generated 3,871.7 billion kilowatt-hours,which is twice that of the United States.Meanwhile, China’s export has increased extremely rapid this year.

 

According to the data released by the General Administration of Customs,   China’s total import and export of foreign trade has reached 3.43 trillion yuan in August, up by 18.9% comparing that of 2020. And the positive growth has been last for 15 consecutive month.In the first eight months of 2021, China’s total imports and exports reached 24.78 trillion yuan, up by 23.7% year on year and 22.8% over the same period in 2019.

 

The reason for export increase is that affected by the epidemic, the production in many countries are not normal, so the production task in China increases. With the increase in export,the demand of raw materials also increased. The import for commodities products also soared.From the end of 2020, the increase of steel price is caused by the price increase of iron ore and iron fine powder which are imported from other countries.The main production means in the manufacturing industry is raw materials and electricity.With the production task increases,China’s electricity demand continues to increase. Why not to expand the coal supply, but instead to limit electricity?On the one hand, the demand for power generation is increasing, while the cost of power generation is also increasing.Since the beginning of 2021, the supply and demand of domestic coal continues to be tight. The price of thermal coal is high for in low season. The coal prices have risen sharply and maintained a high level.With the high price, the production and sales costs of power enterprises are seriously inverted. And the operating pressure of power enterprises is prominent.According to the data of CLP, the unit cost of standard coal for large power generation groups has increased by 50.5% year on year. But the electricity price has remained same. The loss of coal power enterprises was significantly increased, and and the whole industry is in loss.It is estimated that the loss of every power generation  will exceed 0.1 yuan for every 1 watt. And 100 million kilowatt will lose at least 10 million yuan. For the large power generation enterprises, their monthly loss will be over100 million yuan.On the one hand, the coal price remains high, on the other hand, the price of electricity is controlled by government. So it is difficult for power plants to have a balance. Thus, some power plants would rather generate less electricity.On the other hand,achieving the completion of industrial transformation requirements is urgent.China has to eliminate backward production capacity and implements supply-side reform.To realize the dual-carbon target and environmental protection need, as well as another important aim which is to realize industrial transformation. This is to change from traditional energy-cost production to emerging energy-saving production.In recent years, China has been working to reach this goal. But from last year, due to the epidemic,the demand and task of  the of high energy consuming products under high has increased.With the epidemic raged and global manufacturing stalled, there is large manufacturing orders returning to the mainland.This leads to a high consumption of power in the first 3 quarters of 2021. Also,the price of raw material, which price is dominated by international capital has soared in 2021 leads to a high production cost.In addition, for the domestic and global enviromental protectio, China will need efficient production capacity in the future. To reduce the energy consumption and carbon emissions of traditional industries, large-scale technological innovation and device transformation is needed.Thus, in short term,  to achieve the dual control goal, power and production limit is a way for traditional industries to achieve the goal.In addition, the inflation risks can be prevented in certain degree with the high soaring global price of iron, copper, oil, grain, and beans.

 

The Chinese government has been working hard for the dual control on energy consumption for the environmental protection. Due to the orders back to China from beginning of 2021, the busy production has lead to a high power consumption which is out of the expectation. After the review for the first 3 quarters, the energy consumption in many provinces is much higher. The consumption for the last 3 quarters already reaches the amount for the whole year.   The main energy consuming projects are mainly in six industries, including petrochemical, coal power, chemical, steel, non-ferrous metal smelting and building materials. With the over-consumed energy and power, many provinces have adopted the production and power limit policy and these lead to the enterprises feel unprepared.

 

What is the effect for the different industries?

 

With the background of sudden power and production limit from provincial governments, the chemical industry index has a sharp rise, different chemical raw materials has soared in price, and many related stock listed companies also have the daily raising limit frequently.According to the Business agency, the chemical index was 1137 on September 1 and was 1262 on September 30. This is a record high in the cycle.  Comparing with the lowest point of 598 points on April 08,2020, the index has rise by 111.04%.(Note: Period to 2011-12-01 till)

 

The new high price in chemical industry is mainly due to the dual  control and power restriction policy. As there are 9 provinces and autonomous regions whose energy consumption was much up in the first 3 quarter year on year! And another 10 provinces’ energy consumption reduction rate can not meet the requirements. This means the target of dual control is not reached in the first half year. So, every province has heavy task to take new measures to ensure the realization of the whole year’s target.

In 2020, due to COVID-19, the global economic activities have been greatly affected.the poor demand leads to the low prices of crude oil and bulk chemicals downstream. While in 2021, with the gradual control of epidemic and recover of global business, the production has recovered much and demand also increase. As per the monitoring industry data of the business agency, it can be seen that the price of many chemical sub-industries has increased in 2021, and some is up by more than 100% year on year.

 

As per the data, the price of 79 kinds of products in chemical sector increased in September 2021, 57 of them increasing more than 5%. the top three commodities with price increase were phosphate (161.44%), yellow phosphorus (108.70%) and caustic soda (90.00%).

There were 18 products with price declines, and 6 products down by more than 5%. The top 3 declines were butanadiene (-33.32%), butanol (industrial grade) (-33.62%), and isooctanol (-30.90%).

 

Product Industry Early Sep., price Late Sep., price Unit Monthly increase or decrease
Phosphoric acid Chemical 1195.3125 3125 USD/MT 161.44%
Yellow Phosphorus Chemical 4492.1875 9375 USD/MT 108.70%
Caustic Soda Chemical 101.5625 192.96875 USD/MT 90%
DMC(Silicone) Chemical 5859.375 9890.625 USD/MT 68.80%
R134A Chemical 3489.53125 5755.15625 USD/MT 64.93%
Silicone Adjuvant Chemical 5300 8700 USD/MT 64.15%
Acetic anhydride Chemical 1507.8125 2335.9375 USD/MT 54.92%
Epichlorohydrin Chemical 2260.3125 3317.65625 USD/MT 46.77%
Acrylic Acid Chemical 2307.1875 2869.6875 USD/MT 24.36%
Propylene Glycol Chemical 2666.5625 3296.875 USD/MT 23.63%
Rutile Titanium Dioxide Chemical 3050 3200 USD/MT 4.92%

 

In September, the price of phosphrous chemical price has reached a ten year high.Except the phosphorus ammonium market remains stable at a high price, phosphate and phosphate ore have sharp increase after yellow phosphorus. Under the dual control policy, yellow phosphorus related enterprises have serious limit in electricity and production capacity, thus the tight market supply situation cannot be changed in a short time.But till the end of September, most phosphorus chemical products have risen to a high level. Downstream enterprises need to be more cautious for take in new raw material. In general, there could be a certain pullback in the phosphorus chemical, but in a short time it may still remain at a high price.

 

Besides phosphrous chemical, the acetic acid industry also has big increase in September. The price of acetate products rose by 47.69%. Its upstream raw material methanol has increased by 37.86%. And downstream acetic anhydride by 54.92%, EVA increased by 38.82%, ethyl acetate by 25.23%, and PTA by 3.49%. Affected by the dual control policy, many acetic acid industry chain enterprises has stopped production and price has increased much. After the CHina National Holiday, with the production recovery in October, the supply and demand of the acetate industry chain has been more eased. According to the statistics of the production plan of acetic industry, the supply growth in October is expected to be more than the growth of demand, the price of acetate industry is expected to drop some in October.

 

In addition, the price of the chlor-alkali sector in the chemical industry has also increased, with caustic soda rising by 90% in September, calcium carbide by 39.45%, pvc by 34.45% and soda by 34.05%. With the dual control policy, the production capacity of chlorine-alkali industry in October is expected to be relatively low. With the relatively tight supply and high price of raw materials, it is expected that the prices of soda, caustic soda, baking soda would be stable at a high level.Actual situation will be depended on the demand.

 

Besides the basic chemical, chemical products such as organic pigments(Pigment Red 122, Pigment Violet 19, Pigment Yellow 74, Pigment Yellow 12), Anatase titanium Dioxide, Silicone leveling agent, Dimethicone, and optical brightener all have price increase at different range.

 

The recent large-scale power restriction would have a big impact on the manufacturing industry, and long-term environmental protection policy still exist, the price rise of commodity prices will transmitted to the downstream, which will squeeze the profit and living space of downstream enterprise .In addition, the control on high energy consumption industry is a long-term trend, so the short-term policy will only affect the production limit time and the trend for energy saving will not be changed. Therefore, with the inflation risk in the fourth quarter, the traditional high demand months will lead to a further price increase of chemical products. in the background of global energy shortage, product prices have rising trend, but the height of the chemical market would be subject to the demand situation.

 

 

 

 

 

 

 

 

 

 

titanium dioxide for paint 1

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%.

Data

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%

Data

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.

Data

 

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.

Data

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.

Data

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.

Data

 

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.

Data

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.

Data

 

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.