CCM: Titanium sponge market begins to recover with bright prospect in China

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Publish time: 12th October, 2016      Source: CCM
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    Since 2011 when titanium sponge hit its second price peak in China, the capacity of titanium sponge gained explosive growth, leading to increasingly serious overcapacity. In addition, market price of titanium sponge kept falling down and enterprises were suffering from losses. Recently, with the inventory pressure eased after Chinese Lunar New Year, some domestic titanium sponge enterprises began to raise their prices which have been lingered at a low level for a long time and their operating rates also began to increase.
  

  

    
  

  

    
  

  

    Source: Bing
  

  
After the Chinese Lunar New Year, price of titanium sponge in Chinese marker has been rising steadily. Enterprises' quotation rose from USD7,684.13/t in late Feb. to USD8,011.17/t in early May. Though the increase rate was not so impressive, domestic titanium sponge enterprises still hold a firm attitude towards price increasing which indeed has been put into practice and reflected on the trading prices. According to CCM, there is hardly any titanium sponge sold in the domestic market at a price of lower than USD7,850/t.

  
Meanwhile, during Jan.-April 2015, China's output of titanium sponge has also gained stable growth. In Jan. and Feb., some enterprises did not operate normally influenced by the Chinese Lunar New Year, leading to a relevant low output. In April, operating rates of titanium sponge enterprises began to climb up and some enterprises have already been in full production after inventory digestion of downstream enterprises and price raising heat led by key enterprises such as Luoyang Sunrui Wanji Titanium Co., Ltd. (Sunrui Wanji) and Chaoyang Jinda Titanium Co., Ltd. in March.

   

  Output of major Chinese titanium sponge enterprises in Jan.-April 2015, tonne

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
        

          Company         

      
        

          Jan.         

      
        

          Feb.         

      
        

          March         

      
        

          April         

      
        

          Annual capacity, t/a         

      
        

          Luoyang Sunrui Wanji Titanium Co., Ltd.         

      
        

          870         

      
        

          830         

      
        

          880         

      
        

          900         

      
        

          15,000         

      
        

          Chaoyang Jinda Titanium Co., Ltd.         

      
        

          800         

      
        

          800         

      
        

          800         

      
        

          800         

      
        

          10,000         

      
        

          Baoti Huashen Titanium Industry Co., Ltd.         

      
        

          700         

      
        

          700         

      
        

          700         

      
        

          700         

      
        

          12,000         

      
        

          Chaoyang Baisheng Zirconium Co., Ltd.         

      
        

          520         

      
        

          500         

      
        

          500         

      
        

          500         

      
        

          6,000         

      
        

          Pangang Group Vanadium Titanium & Resources Co., Ltd.         

      
        

          500         

      
        

          550         

      
        

          500         

      
        

          550         

      
        

          15,000         

      
        

          Anshan Hailiang Nonferrous Metals Co., Ltd.         

      
        

          380         

      
        

          500         

      
        

          500         

      
        

          550         

      
        

          5,000         

      
        

          Zunbao Titanium Co., Ltd.         

      
        

          450         

      
        

          450         

      
        

          380         

      
        

          400         

      
        

          12,000         

      
        

          Zunyi Titanium Co., Ltd.         

      
        

          250         

      
        

          250         

      
        

          450         

      
        

          480         

      
        

          12,000         

      
        

          Jinzhou Titanium Industry Co., Ltd.         

      
        

          140         

      
        

          140         

      
        

          200         

      
        

          200         

      
        

          3,000         

      
        

          Shanxi Zhuofeng Titanium Industry Co., Ltd.         

      
        

          130         

      
        

          150         

      
        

          160         

      
        

          160         

      
        

          5,000         

      
        

          Liaoyang Yigong Titanium Co., Ltd.         

      
        

          0         

      
        

          0         

      
        

          25         

      
        

          45         

      
        

          500         

      
        

          Total         

      
        

          4,740         

      
        

          4,870         

      
        

          5,095         

      
        

          5,285         

      
        

          95,500         

      
        

          Utilization rate of capacity         

      
        

          45%         

      
        

          45%         

      
        

          50%         

      
        

          52%         

      
        

          /         

      

  Source: CCM

  

  

  

   CCM knows that in 2014, China produced altogether 49,660 tonnes of titanium processed materials in total with a year-on-year increase of about 11.70% and the domestic sales volume reached 42,730 tonnes, increasing by 10.90% year on year. The increases can be mainly attributed to the growing demand from some domestic industries such as the electric power industry and the military industry. However, the aggregate output of titanium sponge in 2014 dropped to only 57,320 tonnes with a YoY decrease of 15.76% and a capacity utilization rate of merely 36.74% while its downstream demand increased year on year. Eight titanium sponge manufactures including Yunnan Xinli Nonferrous Metals Co., Ltd. suspended production in the whole year and their specific dates for production resumption were not released.

  
It is worth noting that in 2015, the development of Chinese titanium sponge industry is heading for a right direction. As more and more small and medium sized enterprises withdraw from the market, the concentration rate of the titanium industry is increasing. Besides, currently, the second phase project of Sunrui Wanji, the titanium sponge plant of Yunnan Tongye (Group) Titanium Co., Ltd. and the new 30,000 t/a titanium sponge project of Chaoyang Baisheng Zirconium Co., Ltd. are under construction, showing that titanium sponge enterprises are optimistic about the future market. What's more, demand for titanium materials from the petrochemical industry and the military industry is soaring and application of titanium materials in many fields such as automobile, biomedicine, architecture and 3D printing has been widening. CCM thinks that Chinese titanium sponge market has a bright future with the release of demand from its downstream markets.

  

     

    About CCM:   

  

    CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
  

  

    
  

  

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