Two rounds of price increases drove titanium dioxide’s “ten-day winning streak”, will the third round of price increases come?

The recent rise in the market and the two rounds of increases in the titanium dioxide spot market have led to ten consecutive days of gains in titanium dioxide concept stocks on the 27th. As of 10:14 a.m. on the 27th, in terms of sectors, titanium dioxide concept stocks rose by 2.08%. In terms of individual stocks: CNNC Titanium Dioxide rose by 8.03%, Annada rose by more than 6%, Huiyun Titanium, Jinpu Titanium and Lubei Chemical were among the top gainers.
On the news, titanium dioxide ushered in the second round of price increases this year in late February, and market confidence has been restored, which has also made the titanium dioxide concept’s gains quite considerable.
Titanium dioxide experienced three rounds of price increases at the beginning of 2022, and titanium dioxide saw four rounds of price increases in the second half of the year.
Taking into account the previous price increases, some market participants are also looking forward to the third round of price increases this year. So will the third round of price increases come?
News front
CNNC Titanium Dioxide announced on the evening of February 26 that Vice Chairman Shen Xin plans to increase its holdings of the company's shares with its own funds or self-raised funds through centralized bidding transactions, and the total planned increase in holdings will not be less than 300 million yuan.
The announcement shows that in August 2023, CNNC Titanium Dioxide and Guizhou Xintianxin Chemical Co., Ltd. signed a transfer agreement. As the transferor, Shen Xin promised to use no less than 300 million yuan to purchase the company’s shares in the secondary market.
At the same time, the company's stock price is greatly affected by fluctuations in the market environment. Based on full recognition of the company's fundamentals, future prospects and long-term investment value, Shen Xin is firmly bound to the company for common development and plans to implement a shareholding increase plan to support the company's stability and sustainable development.
On the evening of February 26, Annada issued an indicative announcement of planned changes in the controlling shareholder and actual controller.
The announcement shows that on that day, the company's controlling shareholder Copper Chemical Group and Wanhua Battery signed a "Share Transfer Agreement" and a "Concerted Acting Persons Agreement". According to the above agreement, Copper Chemical Group plans to transfer the company it holds through agreement transfer. 32.683 million shares (accounting for 15.20% of the company's total shares) were transferred to Wanhua Battery. The equity transfer price was 9.15 yuan per share, and the total transfer price was 299 million yuan.
After this equity change and the parties acting in concert are reached, the company's controlling shareholder will be changed to Wanhua Battery, and the company's actual controller will be changed to Yantai State-owned Assets Supervision and Administration Commission.
Spot market: Whether the third round of increases will come depends on demand
On February 27, the average price of SMM rutile titanium dioxide was 16,700 yuan/ton, the same as the previous trading day; the average price of anatase titanium dioxide was 14,850 yuan/ton, the same as the previous trading day.
According to SMM historical prices, in this round of price adjustments, the average price of SMM rutile titanium dioxide increased by 550 yuan/ton on February 22, an increase of 3.41%; the average price of anatase titanium dioxide increased by 800 yuan/ton on February 22, an increase of 5.69%.
The average price of ilmenite concentrate (TiO2≥46%) on February 21 was 2,275 yuan/ton, approaching the high of 2,280 yuan/ton on April 22, 2022, setting a high in the past 22 months.
According to SMM, the reasons for this year’s two rounds of price increases are:
Since December 2023, foreign trade orders have performed well. The inventory pressure faced by titanium dioxide companies dropped sharply, and the production and sales of the titanium dioxide market have been balanced.
In January 2024, some titanium dioxide companies arranged production orders, and titanium dioxide companies experienced shortages of some titanium dioxide models. The titanium dioxide market has started the first round of price increases of the year, and titanium dioxide prices have begun to rebound.
The second round of titanium dioxide price increases: mainly due to the tight supply of titanium ore and high ore prices, which caused titanium dioxide companies to follow the rise in consideration of production costs; as well as the price increases of many titanium dioxide companies in December 2023 and January this year Maintenance has made spot inventory tight; titanium dioxide exports have performed well.
Entering 2024, according to SMM research, some titanium dioxide companies said that export orders in January were very strong .
According to customs data, China exported 143,000 tons of titanium dioxide in December 2023, a year-on-year increase of 12.9% and a month-on-month increase of 16.8%.
Against the background of poor economic conditions in Europe, titanium dioxide has been recognized by many international customers due to its low price.
In addition, according to SMM, some titanium dioxide companies have relatively full orders for 2024, with production orders scheduled until March. In the case of tight spot supply, this has also supported the rise in titanium dioxide prices.
According to the price increase situation in 2022, some market participants are also beginning to look forward to the arrival of the third round of price increases. As for whether the third round of price increases will come, judging from what SMM currently knows: Given that the current second wave of price increases is still It has not been implemented. Some market participants believe that it should be implemented in March. If the demand is good by then, it should be conducive to the arrival of the third round of price increases.
Considering that the current supply of titanium dioxide fell short of demand, it is expected that the price of titanium dioxide will be strong in the future, and SMM will continue to watch subsequent changes in spot transactions.
As the highlight of titanium dioxide demand in 2023, the export situation has also become the focus of market.
SMM will promptly follow up on the price jump and the latest export situation of titanium dioxide.
Institutional voice: The high growth rate of titanium dioxide exports will be further maintained in the future.
Huaan Securities Research Report pointed out: In the global downstream consumption structure of titanium dioxide, architectural coatings account for 23.78%. Overseas titanium dioxide production capacity remains stable, and China has advantages in cost and scale and is the world's largest titanium dioxide production base.
From 2021 to 2023, the domestic titanium dioxide export volume accounted for 34.50%, 39.13%, and 41.07% respectively. The export proportion increased year by year. The growth rate of titanium dioxide exports exceeded the production growth rate. In the future, as the competitiveness of domestic titanium dioxide companies further increases Improvement, it is expected that the high growth of titanium dioxide exports will be further maintained in the future.
Everbright Securities believes that with the subsequent recovery of the macro economy and the policy boost to the real estate industry chain, the steady increase in exports and the continued improvement of the real estate completion end are expected to increase the overall demand for titanium dioxide, which is expected to further promote the high inventory of titanium dioxide, to achieve continuous improvements in titanium dioxide prices and profitability.
Tianfeng Securities said that in 2024, domestic demand for titanium dioxide is expected to recover. Currently, most titanium dioxide exporting countries are developing economies. The rapid economic development of these countries and regions will also drive China's titanium dioxide exports.
Minsheng Securities research report shows that in recent years, domestic titanium dioxide production capacity has expanded rapidly.
As the prices of titanium ore and energy continue to remain high, overseas giants have accelerated their withdrawal from the titanium dioxide market, and domestic product exports have ushered in a golden period of development.
In 2023, the titanium dioxide industry will receive frequent price increase letters, coupled with the withdrawal of overseas manufacturers, industry confidence will be boosted.
In 2024, the pace of repair in the domestic coatings field and the fulfillment of expectations for continued growth in overseas exports deserve special attention.