Titanium Dioxide: Good Ending in 2017, Normality Like Boats Going Up With the Level of the Water
Year:2018 ISSUE:3&4
COLUMN:INORGANICS
Click:336    DateTime:Feb.07,2018


By Fu yijiang

Experienced the trough of the history in 2015, China titanium dioxide market reversed the trend to rise up frequently in the whole year of 2016. In 2017, the whole industry continued high boom, and the market was still on the upswing.
   In 2017 China titanium dioxide market developed soundly: the continuation of inertia increases occurred from Jan to May, and the market called-back slightly from Jun to Aug. During the golden Sept and silver Oct, the market jumped up multiply, and in traditional Nov and Dec, weak demand and return of funds made the market price reduced to a single general debate. In general, the mainstream market was in strong stability in 2017.

   1. Supply-side reform

   As to structural reform of the supply side, the homogeneity development pattern must be abandoned, and the keys of supply side reform for China titanium dioxide industry are to accurate industrial position, increase industrial scale, develop the sustainable ability. The whole industry has increased the input for the energy-saving emission reduction, environmental protection and new products development. Cutting excessive industrial capacity has achieved initial success, and the industry environment for the development has obtained effective changes.

   2. Domestic demand has weakened, while export has set a series of record highs

   Titanium dioxide is mainly used in paints, plastics, paper making, printing ink and other fields in China. Among them, coating industry is the largest downstream industry of titanium dioxide, accounting for more than 60% of titanium dioxide consumption. The relationship between the coating and the real estate is very close, and from the data of the terminal real estate, it can be more intuitive found the changes of the demand for titanium dioxide. In the face of fierce competition, industrial enterprises above designated size in the paint industry scale manufacturers have merged and recombined, and the yield increased. According to preliminary statistics, in 2017 the domestic paint production is expected to achieve the growth of nearly 4%, including the increase of rigid demand of titanium pigment.
   In 2017 due to the high pressure of environmental protection, the elimination of backward production capacity of coating industry had a direct impact on the market demand of titanium dioxide. Under the circumstance of domestic market sluggishness, the titanium dioxide enterprises actively explore the international market. According to customs statistics, Chinese titanium dioxide exports reached 76 342.92 tons in November 2017, with an increase of 20.71% YoY, an increase of 12.98% compared with the previous month. The average export price was US$2 511.72 /t in November. The total exports of titanium dioxide were 742 771.61 tons in the first 11 months of 2017. The total amount of exports in the first 11 months of 2017 has exceeded the total amount of last year.

   3. Rational management to abandon the price war

   The maximum cumulative increase range of Lomon Billions Group was RMB3 900 /t in 2017, but other companies did not all follow to rise up, and the price range was also adjusted according to the actual situation. Even under unfavourable market conditions, the rise and fall of the market norm make titanium dioxide industry to get rid of the price war mode of operation. The price trends of titanium pigment in 2017 are shown in Figure 1.


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Figure 1 The price trends of titanium pigment (RMB/t) in 2017

  

   4. Normality of aftermarket is like boats going up with the level of the water

   In 2017, it was roughly estimated that the total output of China titanium pigment was 2.9 million tons, the total exports were about 900 kt, the total domestic sales were about 2.6 million tons, and there was a good ending in 2017. The state environmental protection supervision measures will become more and more strict, and the enterprises in the upstream and downstream are increasing investment in environmental protection. At the same time, the production cost will further increase, product sales prices will rise up, and the market norm will be like boats going up with the level of the water.
The market will be expected to continue the good in 2018, and the industry will enter a period of prosperity.