Behind the cost support and export improvement of

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Behind the "off-season not light" of titanium dioxide industry: cost support and export improvement

after entering 2020, domestic titanium dioxide enterprises started a new round of price rise. Different from the centralized price increase mode of titanium dioxide industry in recent years, this price increase shows that small and medium-sized enterprises take the lead in the off-season of the industry

recently, we confirmed that the fatigue life in China depends on the ticket life of the non prestressed reinforcement at the bottom of the beam. The titanium miner is located in Panzhihua City, Sichuan Province. Through the centralized interview with titanium dioxide production, sales and downstream customers, we strive to explore the main reasons supporting the abnormal price rise of titanium dioxide this round and the industry's prediction of the annual trend

rare off-season price rise of titanium dioxide

on January 7, Jinpu titanium industry (000545) announced that from now on, the sales price of rutile and anatase titanium dioxide will be increased by 500 yuan/ton for domestic customers and 80 dollars/ton for international customers on the basis of the original price

previously, securities times e company learned from industry analysis institutions that enterprises including CITIC titanium, tihai technology, Jinmao titanium and Detian chemical have successively announced increases, with most of the price adjustments at 500 yuan/ton, and Yibin Tianyuan's single price adjustment at 1000~2000 yuan/ton. So far, more than 20 small and medium-sized titanium dioxide enterprises have issued price adjustment letters

"in the past two years, due to the significant increase in the concentration of titanium dioxide industry, large enterprises led by longmang Baili have always been the vanguard of price rise. Like this year, small and medium-sized enterprises have led the way, and the situation of promoting price rise in the off-season has not been seen in recent years." When talking about the recent market price trend, zhuochuang analyst Wang Juan said that according to the market reflection, after longmang Baili (002601) issued the price adjustment letter in August 2019, although small and medium-sized titanium dioxide enterprises have successively announced increases, the actual landing price has not improved. This price increase is actually a further implementation of the price increase last year. "Some small and medium-sized enterprises have said that they plan to further raise factory prices after the Spring Festival."

in the past 2019, the domestic titanium dioxide price showed a downward trend as a whole, during which it experienced five rounds of slight price rises and falls. By the end of 2019, the tax inclusive ex factory price of rutile titanium dioxide by sulfuric acid method is 13500-15200 yuan/ton, and the tax inclusive ex factory price of anatase titanium dioxide is 11500-12800 yuan/ton

"this wave of price increases is indeed led by small enterprises, and some enterprises have successfully achieved price increases, which is beyond the judgment of the market." Yang Xun, an analyst at YANTI in Shanghai, also said that in early November 2019, small and medium-sized enterprises also successively reduced prices because longmang Baili made a large profit concession to the downstream. After the price reduction, due to more destocking by downstream stocking enterprises at the end of the year, and the production restriction of enterprises, some manufacturers are in a tight inventory situation. Therefore, as early as the end of November 2019, some enterprises have announced price increases, which finally made the market price stop falling and stabilize

Yang Xun said that the ore end price of titanium dioxide has been relatively strong recently. In addition, downstream dealers and manufacturers are actively preparing goods, so the inventory of titanium dioxide enterprises has been emptied at once

Wang Juan also said that the actual domestic demand has not been very good in the near future. This price rise was also boosted by the hoarding of downstream enterprises and traders, but the inventory of manufacturers was transferred to the downstream. In addition, the price of titanium concentrate has increased significantly, which has a certain support for the price of titanium dioxide

at a time when small and medium-sized manufacturers have raised prices, why have leading enterprises not yet made moves? The relevant person in charge of longmang Baili recently told the securities times that, on the one hand, the production of chlorinated titanium dioxide successfully put into operation in 2019 has increased, so the company has released a certain amount of capacity in recent months, and the increment will try to achieve market sales, but many small and medium-sized manufacturers have no increment, so they will be eager to raise prices. On the other hand, titanium dioxide is still in the traditional off-season. After the off-season rise, it is about to face the peak season to continue to raise prices. Continuous price increases will undoubtedly exert pressure on the downstream, which is not conducive to the long-term development of the industry. However, it also said that the company's product brands are better than small and medium-sized enterprises, and it is impossible that everyone's prices are rising rapidly, while the products of leading companies continue to be relatively low

In the interview, most people in the industry will point to the mining side as the main reason to support the off-season rise of small and medium-sized titanium dioxide enterprises in this round. Recently, I visited Panzhihua, which accounts for about 90% of China's titanium resources, to inquire about the supply pattern of the titanium market from local mining enterprises

"93% of China's titanium resources are concentrated in Panzhihua jiaxichuan area, but the titanium resources available for open-pit mining are still relatively limited. The amount of resources has been open for less than a year, and the supply of titanium in Panzhihua Xichuan area has been tight since 2019." As the person in charge of the titanium raw material production base with the largest single mine scale in Panxi region, Chen Jun, general manager of Sichuan longmang mining and Metallurgy Co., Ltd., said that in the past month, the price of titanium concentrate in Panxi region has risen from 1200 yuan/ton to 1400 yuan/ton. This short-term increase is very obvious for titanium mines in Panxi region, and the shortage of resources is the main reason to support the price rise. In addition, the environmental protection and production restriction in Panxi region also contributed to the rise in titanium prices. "At present, the supervision of safety and environmental protection is still relatively strong. Small mines need to stop production for rectification if they do not meet the standards, but on the whole, the environmental impact in 2019 is not great." He said

"now the scale of titanium dioxide enterprises is getting larger and larger. With the increase of market demand, the supply of the whole Panxi region has not increased in recent years. Coupled with the reduction of supply caused by resource depletion, the price of titanium concentrate in Panxi region will show a continuous upward trend, which will accelerate the reorganization and reshuffle of titanium dioxide enterprises." The relevant person in charge of Sichuan Anning iron and Titanium Co., Ltd., another leading mining enterprise in Panxi region, also said that at present, the supply of titanium mines in Panxi region has exceeded the demand, and this market tension has appeared since the second half of 2019. The tight supply of international raw ores in recent years has increased the downstream demand for titanium ore in Panxi area, so the market has increased significantly in the short term

according to the above person in charge, there were more than 400 titanium ore production enterprises in 2005, but there are only dozens at present. After environmental protection supervision and management in recent years, enterprises without production qualification and tailings treatment capacity in Panxi region have been shut down in succession. But now, even if there are few titanium ore production enterprises left, the supply of raw ore still cannot catch up with the production, so the main factor that directly leads to the upward price is the shortage of resources

"in the first half of last year, Mozambique and Kenya reduced the supply of 400000 tons of titanium ore, but at that time, there were 300000 tons of stocks in the port, so the tension was not reflected. At present, the 300000 tons of inventory in the port has been digested. After the market output became smaller, the demand of original customers is still increasing." He said

in 2019, the international titanium resources decreased significantly. In addition to the shutdown of melinor gudekang project in September, there were also the depletion of resources in Kenya's raw ore area of bass resources and the shutdown of Sibelco Australia during the year; In addition, Vietnam still has no quota for titanium export, and the export of private mining enterprises in India is still limited

Chen Jun said that the current domestic mainstream process is to produce titanium tetrachloride by large-scale boiling chlorination method, and then add oxygen to produce titanium dioxide by chlorination method. This process has strict requirements on the content of calcium and magnesium in titanium ore, and the imported ore with low calcium and magnesium is still the main raw material. Although titanium tetrachloride and sponge titanium produced by lava chlorination method will also have a certain demand for domestic titanium ore, it is not the mainstream process. Therefore, the price rise caused by the tight supply of imported ores from abroad has a significant cost support for titanium dioxide produced by chlorination

"in addition, as the market demand for sponge titanium has increased significantly, the market has further increased the demand for imported titanium ore raw materials." The relevant person in charge of longmang Baili said that in recent years, with the continuous promotion of China's high-quality development, the demand for sponge titanium and titanium alloy as important materials in high-speed rail, aircraft carriers and other application fields has exploded. At present, the price of imported titanium ore has reached 25. At the regular scheduling meeting on November 27th, 2017, it was $0 - $300, about 2000 yuan per ton. However, nearly 4 tons of titanium ore can produce 1 ton of sponge titanium. Therefore, the prices of titanium tetrachloride and sponge titanium in China have soared recently, and the mine end cost has played an obvious role in promoting

according to the statistics of Tu Duoduo, in the first half of 2019, the titanium ore output of Panxi small and medium-sized plant was more than 400000 tons, an increase of more than 200000 tons compared with the same period of the previous year, but it still failed to fill the gap of 500000 tons of imported ore (including China mining)

affected by the rising cost, some domestic titanium dioxide enterprises have approached the break even line before this round of price increases

Wang Juan said that although titanium dioxide enterprises still have a profit of about 2000 yuan per ton at the current price according to the average market cost, the raw materials of small factories need to be imported, and the purchase price is also high. At the same time, affected by factors such as equipment loss, the profit margin gap is large compared with large enterprises. Before this round of price increase, the price of rutile sulfuric acid titanium dioxide in some small domestic factories has been as low as about 13700 yuan/ton, which has actually reached the cost line, which is also the main reason why small enterprises are eager to announce the rise

there is still increment in the industrial innovation period

at present, China's titanium dioxide industry is still in the industrial innovation period of gradual transformation from traditional sulfuric acid method to chlorination method

as early as 2011, the national development and Reform Commission clearly restricted the industrial policy of "new sulfuric acid titanium dioxide" in the Guiding Catalogue for industrial structure adjustment (2011 version), and encouraged "the production of chlorinated titanium dioxide with a single line capacity of 30000 tons/year or more and using titanium rich materials (man-made rutile, natural rutile, high titanium slag) with a titanium dioxide content of not less than 90% as raw materials"

"now the relevant departments have no longer approved the new sulfuric acid titanium dioxide project, and the chlorination process has a high technical threshold, which also has a great demand for the financial strength of the enterprise, so not every factory can do it, and the overall production capacity is not easy to say." Yang Xun said that although some enterprises still have the project stock of sulfuric acid titanium dioxide, most of them have not had funds to invest in construction in recent years. Even if they do, it will take three to five years to produce actual production capacity. However, the chlorination method has high requirements for technical and financial strength. Enterprises that had previously publicly stated that they would invest and build eventually ran aground due to problems such as capital. At present, the market demand for chlorinated titanium dioxide is still greater than the rate of new capacity

however, on January 9, longmang Baili invested about 1.8 billion yuan to acquire and acquire Yunnan Metallurgical Xinli Titanium Industry Co., Ltd. (hereinafter referred to as "Xinli titanium industry") for technological transformation, and the company's annual output of 100000 tons of chlorinated titanium dioxide production line has been resumed

"Xinli titanium industry has mature technology, so the production capacity release this year will be realized. In addition, the 200000 tons of chlorinated titanium dioxide production capacity previously added by longmang Baili in 2019 will also be released rapidly in 2020." According to Wang Juan's analysis, according to the data of newly increased production capacity of enterprises that have been published at present, the supply of titanium dioxide in the market will increase significantly in 2020. However, due to the technical difficulties of the chlorination method and the long time of equipment commissioning, the production speed will not be very fast, and it is expected to generate output by the second half of 2020

according to Tu Duoduo's statistics, China's titanium dioxide production capacity in 2019 was about 3.92 million tons. From January to November 2019, China's titanium dioxide output was 2.8584 million tons, an increase of 140000 tons year-on-year, an increase of 5.27%. It is estimated that the annual output is about 3.12 million tons. 2020 with

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