Summary：In Jan - Feb 2025,
Longbai Group led over 20 domestic firms to hike titanium dioxide prices twice,
up to 800 yuan/ton domestically and 150 USD/ton globally. Weak downstream
demand is buoyed by holiday stockpiling. Rising raw material costs,
international market influence, corporate losses and supply strain fuel the
price hikes. Facing high costs and anti - dumping, firms may adjust prices
often, seek new markets. Policy - backed leading enterprises will speed up
industry consolidation via M&A.
The domestic titanium dioxide in China has
witnessed the second round of collective price hikes.
In late January 2025 (before the Spring
Festival), Longbai Group took the lead in announcing a price increase of 300
yuan per ton in the domestic market and 50 US dollars per ton in the
international market. Subsequently, more than 20 enterprises followed suit. The
domestic price increase reached 300 to 500 yuan per ton, and the international
price increased by 50 to 100 US dollars per ton.
On February 21st, Longbai Group once again
announced a price increase of 300 yuan per ton in the domestic market and 50 US
dollars per ton in the international market. Within a week, more than 20
enterprises, including Huiyun Titanium Industry and Shandong Dongjia, followed.
The cumulative maximum price increase in the domestic market for the two times
is 800 yuan per ton, and the maximum in the international market is 150 US
dollars per ton.
Market
Situation
Currently, the downstream demand for
titanium dioxide is weak. Although industries such as coatings, plastics, and
inks have not fully recovered and the order volume is lower than in previous
years, the demand for stockpiling during holidays like the Spring Festival has
increased, which has provided some support for the prices.
In addition, led by leading enterprises,
such as Longbai Group (with an annual production capacity of 1.51 million tons)
and CNNC Titanium White, they have improved their profitability through cost
control and technological upgrades (such as the chlorination process). The
industry concentration ratio (CR5) reaches 43.1%.
At the same time, environmental protection
policies are accelerating the elimination of small and medium-sized production
capacities. Technological transformation needs to be completed before 2026, and
the market share of leading enterprises will be further expanded.
Reasons
for the Price Increase
1.Rising
Raw Material Costs:
The production of titanium dioxide mainly
relies on titanium concentrate and sulfuric acid.
The price of titanium concentrate has been
rising continuously (it increased by 100 yuan per ton before the Spring Festival
and in February respectively), accounting for 50% to 60% of the total cost.
The market situation of sulfuric acid is
favorable. Downstream enterprises are enthusiastic about purchasing. Acid
enterprises have smooth sales, with low inventory levels, and the price has
been continuously adjusted upward.
Entering March, due to the peak season of
the phosphate fertilizer market and the maintenance period of some regional
sulfuric acid plants, the price of sulfuric acid is expected to continue
rising. The price of titanium concentrate is also expected to remain relatively
firm. The continuous increase in raw material costs has driven the price
increase of titanium dioxide.
2.Linkage with the International Market:
The energy crisis in Europe has pushed up
international prices. International giants like Venator increased prices by 300
euros per ton in the European, African, and Middle Eastern markets in February,
driving domestic enterprises to adjust their prices.
Meanwhile, on January 21st, the European
Union officially imposed anti-dumping duties on Chinese titanium dioxide, with
a tax rate of 250 to 740 euros per ton. On February 12th, India announced the
imposition of anti-dumping duties on Chinese titanium dioxide, with a tax rate
of 460 to 681 US dollars per ton.
The implementation of anti-dumping duties
has significantly increased the export cost of Chinese titanium dioxide, and
enterprises are raising prices to relieve this part of the pressure.
3.Corporate Losses and Supply Pressure:
The industry profit has been continuously
negative (the profit of rutile type is -675 yuan per ton), and price increases
are needed to relieve the cost pressure.
Some titanium dioxide producers in certain
regions have experienced production restrictions and shutdowns, leading to a
decline in the operating rate, a slowdown in inventory growth, and a decrease
in the overall market supply.
Due to reasons such as equipment
maintenance in some enterprises, the inventory of titanium dioxide is
relatively low, exacerbating the tight supply situation.
Future
Trends
1.With raw material costs remaining high
and the pressure of international anti-dumping, enterprises may frequently
adjust their prices.
2.The high tax rates in the EU and Indian
markets may force enterprises to shift to other regions, and they need to deal
with trade barriers from more countries simultaneously.
3.Driven by policies, small enterprises
with backward technologies are facing elimination, and leading enterprises will
strengthen their advantages through mergers and acquisitions.
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