Recently, CNNC Titanium Dioxide announced that the company had signed a "Strategic Cooperation Agreement" with Nippon Paint Investment Co., Ltd. Both parties agreed to establish a strategic procurement cooperation relationship for titanium dioxide from 2025-2027, with the company expected to become one of Nippon Paint Investment's largest suppliers of titanium dioxide products. The signing of this agreement does not require submission to the company's board of directors or shareholders' meeting for review, does not constitute a related-party transaction, and does not constitute a major asset restructuring as defined by the "Administrative Measures for Major Asset Restructuring of Publicly Listed Firms."
CNNC Titanium Dioxide disclosed the main contents of the agreement: 1. Cooperation objectives: To help both parties further enhance overall operational efficiency, reduce operating costs, improve technical capabilities, product quality, and service quality in building material-related products, achieve future market expansion strategies, gain market share, create greater commercial value for both parties, and mitigate significant adverse impacts caused by market changes. 2. Cooperation content and methods: (1) Product supply: The company will supply titanium dioxide products to Nippon Paint Investment. The company commits to ensuring the demand of Nippon Paint Investment's factories at all times, stockpiling in advance based on Nippon Paint Investment's needs, and guaranteeing reasonable costs and optimal prices. It also ensures priority supply to Nippon Paint Investment during market shortages at stable prices. Nippon Paint Investment commits to granting the company priority selection rights within its titanium dioxide supplier system. (2) Product pricing: The company will supply products to Nippon Paint Investment at prices lower than the market average or at preferential prices mutually agreed upon. If the company fails to ensure supply at the agreed price, it will bear liability for breach of contract.
Regarding the impact of the agreement's implementation on the company, CNNC Titanium Dioxide stated: 1. The implementation of this agreement will promote the establishment of a long-term and stable cooperative relationship with Nippon Paint Investment. Through resource sharing, complementary advantages, and business innovation, both parties will jointly provide customers with higher-quality and more comprehensive products and services. During the strategic cooperation period under this agreement (2025-2027), the company is expected to become one of Nippon Paint Investment's largest suppliers of titanium dioxide products. This will effectively ensure the balance of production and sales of the company's main product, rutile titanium dioxide, further enhance product quality in specific application fields, and lay a solid foundation for increasing the company's market share. 2. The implementation of this agreement will not affect the company's business independence, and the company's main business will not become dependent on Nippon Paint Investment due to the agreement's execution.
Previously, CNNC Titanium Dioxide announced the signing of a framework agreement for cooperation on a comprehensive energy project in Baiyin City. On December 11, 2024, the company signed the agreement with Guangdong Construction Engineering Group Co., Ltd., aiming to jointly invest in and develop a comprehensive energy project in Baiyin City, Gansu Province. The main contents of the agreement include the construction of a cogeneration project, a generation-grid-load-storage project, and the Jingtai new energy project. The total investment is estimated at 800 million yuan for the cogeneration project, 2.5 billion yuan for the generation-grid-load-storage project, and 970 million yuan for the Jingtai new energy project, with a construction period of two years for each. This cooperation does not constitute a related-party transaction and will not have a significant impact on the company's operating performance in 2024. The project's implementation requires relevant approvals, and the specific investment scale will be determined based on subsequent project progress. The execution of the agreement will help integrate resources, facilitate the smooth implementation of the company's "sulfur-phosphorus-iron-titanium-lithium" green circular industry projects, and promote the company's long-term sustainable development.
As CNNC Titanium Dioxide has not yet released its full-year performance for 2024, a review of its Q3 2024 report shows that the company achieved operating revenue of 5.149 billion yuan in the first three quarters, up 43.26% YoY; net profit attributable to shareholders was 448 million yuan, up 33.98% YoY; and net profit excluding non-recurring items was 383 million yuan, up 51.63% YoY. In Q3 alone, the company achieved operating revenue of 1.999 billion yuan, up 44.81% YoY; net profit attributable to shareholders was 143 million yuan, up 19.51% YoY; and net profit excluding non-recurring items was 130 million yuan, up 31.73% YoY.
Spot
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After more than 20 companies issued price increase notices, the titanium dioxide spot market saw a slight rise in trading volume. According to SMM quotes, on February 17, SMM rutile titanium dioxide was priced at 14,200-15,000 yuan/mt, with an average price of 14,600 yuan/mt, up 100 yuan/mt or 0.69% from the previous trading day. This marks the first increase since it fell to 14,500 yuan/mt on December 24, 2024.
In terms of raw materials: Due to sufficient stockpiling before the holiday and relatively high prices, the profit margin for titanium dioxide has narrowed, leading to weak purchase willingness among factories, with most focusing on price inquiries and limited actual trading volume. However, supported by the pre- and post-holiday price increase trend for titanium dioxide, the overall market sentiment remains bullish, with holders reluctant to sell at low prices and generally adopting a wait-and-see approach.
Before the holiday, many titanium dioxide factories underwent concentrated maintenance, resulting in increased order volumes for operating enterprises and generally low inventory levels. According to SMM, low inventory levels among traders and downstream sectors have led to tight supply from some titanium dioxide producers, causing a slight increase in domestic titanium dioxide prices. As more factories resume operations after maintenance or holidays, the supply of titanium dioxide is expected to recover steadily, with market activity likely to improve compared to before, and the market is expected to gradually trend positively.
![[SMM Analysis] Titanium Dioxide Prices Rise Amid Cost Pressures and Geopolitical Tensions](https://imgqn.smm.cn/usercenter/QmrGh20251217171725.jpg)
