Since December, the Titanium Dioxide industry has set off another round of price rise. Following the price increase announced by LOMON BILLIONS group, the industry leader, China Nuclear titanium white, Huiyun titanium and other companies have also followed up.
On December 13,LOMON BILLIONS group announced that, according to market demand, rising raw material prices and other factors, since January 1, 2022, the sales price of various models of titanium dioxide will be increased by 1000 yuan / ton for domestic customers and 150 US dollars / ton for international customers.
A day later, CNNC titanium white and Huiyun titanium also issued similar announcements one after another, and the price adjustment range was the same as that of Longbai group.
What level did the price rise to before the price adjustment? According to statistics, from the beginning of this year to November 30, titanium dioxide rose significantly as a whole, among which the price of Rutile Titanium Dioxide by sulfuric acid method rose from 16300 yuan / ton to 19700 yuan / ton, up 20.86%. The average value in the year was 19210 yuan / ton, a year-on-year increase of 38.75%; The price of anatase titanium dioxide rose from 13100 yuan / ton to 18042 yuan / ton, up 37.72%. During the year, the average value was 16846 yuan / ton, a year-on-year increase of 44.95%.
Reason for price increase: better demand
Or do you have another plan?
Titanium dioxide is an important inorganic chemical pigment. It has excellent properties such as high stability, good weather resistance, good whiteness and brightness, good coloring power and covering power. It is the most widely used and used white pigment. It is widely used in coating, ink, papermaking, plastics, chemical fiber, ceramics and other industries. Real estate and automobile industries are two important terminal industries.
It is estimated that about 67% of titanium dioxide is used in the production of coatings, while architectural coatings, i.e. interior and exterior wall coatings (emulsion paint), account for 70% of the demand for titanium dioxide in coatings. In other words, the prosperity of real estate can be used as an important forward-looking indicator of the downstream demand for titanium dioxide.
The centralized price increase of titanium dioxide manufacturers is the continuation of the one-and-a-half-year rise cycle of the product: since the bottom rebounded at the end of June last year, the domestic titanium dioxide market has maintained a strong strength. Especially since this year, except for the Spring Festival holiday, some manufacturers have raised prices almost once a month.
According to the analysis of all parties, there are two core reasons for this price increase: cost promotion and better demand. For example, the above listed companies said in the price increase announcement that it was "based on the market demand of titanium dioxide and the rise of raw material prices".
Let's start with cost drivers. According to the information publicly inquired, the upstream raw materials of titanium dioxide are mainly titanium concentrate and sulfuric acid, and the production cost mainly includes the following aspects:
Consumption of raw ore and acid, ore = total output ÷ total yield × Unit price of ore; Acid = total yield ÷ total yield × 1.65 (acid ore ratio) × Acid unit price; 2. Energy consumption (coal, electricity) and water consumption; 3. Auxiliary materials such as lime, iron powder, aluminum powder, flocculant and other chemical additives; 4. Product packaging and transportation expenses.
From the beginning of this year to the end of November, the national average price of 46% titanium concentrate increased by 12.99%. The average year-on-year increase was 57.75%; The national average price of 98% sulfuric acid, another raw material, increased by 104.93%. The average year-on-year increase was as high as 296.18%.
The rise in the price of raw materials is a driving factor, and the decline in production capacity has further pushed up the price. As the production of titanium dioxide is a high energy consumption and high pollution project, some analysts say that since the third quarter, the production of domestic titanium dioxide enterprises has been limited due to the interference of environmental protection, power restriction and other factors. In addition, small and medium-sized enterprises that do not meet the requirements have been forced to shut down or limit production, the operating rate has decreased, and the market supply is tight.
Let's look at the demand. Specifically, the demand for titanium dioxide is divided into export and domestic demand. Under the situation of global economic recovery, downstream demand remains strong, while affected by the epidemic, the operating rate of overseas titanium dioxide leading enterprises has decreased, while China's epidemic situation is well controlled. Therefore, China's titanium dioxide export has soared since this year. According to the customs sales data, as of October this year, the export of titanium dioxide has shown a year-on-year upward trend for seven consecutive months, with the export volume increasing by 5.18% year-on-year, and the cumulative export volume this year has reached 1054500 tons.
The exit is really good. But turning back to domestic demand, it's hard to say. Some insiders believe that the market demand has not improved significantly, and the domestic titanium dioxide market is not very strong every month in 2021.
This view can be verified from the data. Since July, the main data indicators of the domestic real estate market have declined, and the terminal demand is poor, resulting in the shrinking demand in the downstream coating, plastic and other markets of titanium dioxide. Since November, the weather in the North has turned cold and the downstream demand is light.
In early February, the titanium dioxide price market remained basically stable, the trading atmosphere was poor, and there were few large orders in the terminal market, generally small orders.
People from titanium dioxide enterprises said that at present, titanium dioxide is not particularly good. The price rise at the end of the year can stimulate shipments for enterprises with high inventory. Before the Spring Festival, downstream coating enterprises have a demand for raw materials. At this time, the price rise is announced. Out of the psychology of "buying up but not buying down", these downstream enterprises with goods preparation demand may prepare goods in advance, so as to stimulate the inventory sales of large enterprises.
However,LOMON BILLIONS group and CNNC titanium dioxide announced that the price increase was related to the export business, but considering the acceptance of downstream customers, it was difficult to fully implement the price increase letter at the execution end.
After the price increase, it still has international competitiveness
It may not be surprising that LOMON BILLIONS group took the lead in raising prices in China. In fact, this round of price adjustment is not only the price increase proposed by domestic titanium dioxide listed companies, but also some international titanium dioxide giants such as chemours, tronox, Venator and Kronos announced as early as November that the price of titanium dioxide would be increased from January 1, 2022, ranging from $300 to $400 per ton.
According to the data of China Commercial Industry Research Institute, at present, more than 50% of the world's titanium dioxide production capacity is concentrated in five companies: Chemours, Tronox, Lomon billions group, Venator and Kronos.
Chemours and Tronox are the world's top two giants. As the third largest titanium dioxide enterprise in the world and the largest titanium dioxide enterprise in Asia,LOMON BILLIONS group increased its price after both foreign giants announced the price increase.
At present, the average export price of titanium dioxide in China is 3000 US dollars / ton. At present, more than 70% of the titanium dioxide products of LOMON BILLIONS group are exported. After the price increase of the two foreign giants,lomon billios group is still competitive in the international market, especially in the Southeast Asian market.
How about the future?
Under the disturbance of epidemic situation abroad, domestic titanium dioxide production enterprises benefit from export, so "both quantity and price rise"; In the case of the downturn of the real estate market, the domestic downstream industry is feeling pressure. What will happen in the future of the domestic titanium dioxide market?
At present, the orders of major domestic customers of titanium dioxide have reached the end of the year as a whole, and the customers with sporadic quarterly pricing have locked the orders in January next year. In terms of small and medium-sized customers, the orders are mostly received to the middle and late December, and the increment of domestic demand orders is limited. Domestic downstream enterprises are in the off-season before the Spring Festival, with reduced production capacity and even reduced demand for titanium dioxide.
From the raw material supply side, the current trend of titanium concentrate is weak. The latest quotation of Panzhihua national titanium technology is 2150 yuan / ton, down about 300 yuan / ton from the high point in the year; At present, the price of sulfuric acid is about 430 yuan / ton, which is almost halved compared with the high price in the year. The price of raw materials continues to fall, and it is difficult to support the continuous rise in the price of titanium dioxide.
Nevertheless, the price of titanium dioxide is still expected to rise around the Spring Festival. On the one hand, because the price of titanium dioxide in China is still cost-effective compared with that in foreign markets, it is expected that the support of foreign demand is expected to continue before the end of the first quarter of next year, and the export volume is not expected to shrink. On the other hand, domestic demand will be stable. Therefore, the short-term market price before and after the spring festival may rise steadily, and it is difficult to reproduce the increase and landing strength in the first half of 2021.
Titanium dioxide: an epitome of the chemical industry
The price rise of titanium dioxide since this year has undoubtedly brought excellent performance to relevant listed companies. According to the third quarterly report, the net profit of Longbai group, the industry leader, was 3.831 billion yuan, a year-on-year increase of 96.48%; The net profit of CNNC titanium dioxide was 1.001 billion yuan, a year-on-year increase of 181.37%; Anada's net profit was 129 million yuan, a year-on-year increase of 152.55%; The net profit of Huiyun titanium industry was 173 million yuan, a year-on-year increase of 168.77%.
If you look at the whole chemical industry from titanium dioxide, you will find that this subdivided field is highly consistent with the whole industry. It can be said that it is an epitome of the chemical industry this year.
Since this year, the prosperity of the domestic chemical industry has been high, and the prices of various chemical raw materials have generally risen. This has led to a significant increase in the revenue and operating profit of the chemical raw material industry.
Taking 98% sulfuric acid as an example, the average price in the benchmark period was 306 yuan / ton, and the average price in the current period was 621 yuan / ton, an increase of 103%.
However, compared with the high point in the year, the prices of various chemical raw materials have generally fallen, and it is expected that the chemical raw material industry will be difficult to continue to expand significantly in 2022.
From a comprehensive point of view, the price rise of upstream industries represented by titanium dioxide since 2020 has benefited not so much from the cost push, but rather from the strong export brought by the disturbance of the global epidemic and the better control of the epidemic in China; As an industry with high pollution and high energy consumption, the tight supply caused by short-term production restriction is really good for the price rise of its products.
However, the above factors are unsustainable after all. With the global cooperation to fight the epidemic, overseas production capacity will eventually return to normal, and domestic enterprises will also adjust the continuous price rise of downstream unbearable raw materials. Domestic titanium dioxide related production enterprises should take more ways, such as "long-term association", to coordinate the common interests of upstream and downstream and maintain the long-term development of the industry.
