Titanium dioxide has a strong demand in the cosmetics industry due to its good brightness and ultraviolet absorbing characteristics, which has become the main driving force for the growth of the titanium dioxide market. Besides, the application of titanium dioxide in the plastics industry also occupies more and more market shares. It can be mainly used in packaging, construction, building materials to increase brightness, color and reduce the transparency of polymer materials.
The price of titanium dioxide has continued to rise since October 2020. The latest quotation has increased by nearly 16% compared to October 6, 2020. The current price of titanium dioxide has maintained a high level for some time. Recently, there has been an upward trend again. Many places have sent letters to increase titanium dioxide. price. Not only in China, the price of titanium dioxide will increase globally this round. On November 30, 2020, Venator Materials Corporation announced that it will increase the price of titanium dioxide globally from January 1, 2021. The price increase is 120 Euro/ton or 150 USD/ton, which is slightly higher than the price adjustment in March 2020.
Titanium Dioxide Production Method
At present, the global titanium dioxide industry mainly has two production methods: sulfuric acid method and chloride method. The traditional process of sulfuric acid snacks began in 1916. The sulfuric acid method uses titanium concentrate or acid-soluble titanium slag as a raw material. The titanium concentrate or titanium slag is decomposed by sulfuric acid, and titanium dioxide is obtained through processes such as filtration, hydrolysis, calcination, and pulverization. This method does not require high grades of raw materials, and the resources of titanium concentrate are relatively abundant, but the process flow is long and the emissions are large.
Catalytic Price Increase of Raw Materials
The main reason for this round of price increase of titanium dioxide is the continuous increase in raw material prices. The prices of titanium concentrate and sulfuric acid at the raw material end have been rising since last year. Titanium concentrates rose rapidly in the second half of last year, rising from 1,200 yuan per ton to about 2,500 yuan per ton in one year. The current price has reached the highest point in the past three years.
The increase in sulfuric acid is even more alarming. At the beginning of 2020, the price of 98% sulfuric acid in various places ranges from 100-200 yuan/ton. By January 3, 2021, the price of 98% sulfuric acid in Shandong will be 432.5 yuan/ton. Based on the consumption of 2.5 tons of titanium concentrate and 4 tons of concentrated sulfuric acid per ton of titanium dioxide, the current raw material cost of titanium dioxide has increased by more than 1,000 yuan per ton on average. To ensure profitability, titanium dioxide companies are also raising prices. The soaring price of raw material titanium ore has put a lot of pressure on the production cost of titanium dioxide enterprises. In addition to raising the price of titanium dioxide products to maintain profitability, leading titanium dioxide companies have begun to extend their layout in the upstream and increase their control over the prices of upstream raw materials.
In addition to the increase in the price of raw materials, the price of titanium dioxide is also driven by the tight supply and demand of the industry.
Supply Side: Overseas Expansion Is Delayed, And Domestic New Construction Is Strictly Controlled
The overseas supply pattern is stable. The output of high-grade rutile mines reached a peak in 2017. It is expected that the supply of rutile mines will decline in 2018-2024. Among the overseas giants, only Kenmare and Tenuo will have a clear plan of the production expansion in the next two years.
Export demand for titanium dioxide continues to be strong. Data shows that the global demand for titanium dioxide is growing at a rate of 3%-5% annually, and there is potential for titanium dioxide exports. In 2019, China's export volume of titanium dioxide reached 1.035 million tons, an increase of 10.52% year-on-year, and the export volume ranked first in the world. This is because it is driven by the demand of emerging market countries and the price advantage of domestic titanium dioxide exports is obvious.
In November 2020, China's titanium dioxide export volume was 112,300 tons, a month-on-month increase of 1.85% and a year-on-year increase of 37.11%. The average export price was US$19,10.97. From January to November 2020, China's cumulative export volume of titanium dioxide was 1.1121 million tons; the cumulative average export price was 1926.39 US dollars, an increase of 23.2% year-on-year.
As an important inorganic pigment, titanium dioxide maintains an irreplaceable low level in architectural coatings. It is understood that the coating industry occupies 60% of the titanium dioxide application market, while the real estate market accounts for more than 40% of the coating market. The real estate market has a high degree of influence on the titanium dioxide industry. It can be said that the demand cycle of titanium dioxide is also positively related to the real estate cycle. According to data from the National Bureau of Statistics, from January to November 2020, the floor space of houses newly started by real estate development enterprises was 201.085 million square meters, down 2%, and the rate of decline narrowed by 0.6%. Besides, US real estate will grow strongly in 2020: the year-on-year growth rate will reach more than 38%, and the domestic and overseas demand for titanium dioxide will increase simultaneously in 2021.
At the beginning of 2020, the new crown pneumonia epidemic caused demand to be sluggish, and the supply capacity of the industrial chain was partially withdrawn. Now the economy is recovering, the trend of supply and demand has reversed, and supply is in short supply. In the short and medium-term, especially in 2021, supply and demand will be tightly balanced or even imbalanced. Supported by titanium concentrates for a long time, orderly expansion, and increased concentration of leading players, the price center is expected to remain near the historical median, and cyclical fluctuations are weakened.
On the first trading day of 2021, titanium dioxide stocks collectively rose again, rising by an average of 1.95%. Leading Lomon Baili surged 4.74%, and the main capital inflow was 88.62 million yuan that day. Lomon Baili is a leading enterprise in the titanium dioxide industry. The company is the largest titanium dioxide manufacturer in Asia and the third-largest in the world. It is also the only domestic enterprise that has mastered large-scale boiling chlorination technology. The company's chlorination plant has strong operational stability, which helps the company to enter the mid-to-high-end titanium dioxide field. The company's increase in the raw materials for titanium chloride slag and synthetic rutile will effectively reduce costs.
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