SMM News: Qingjuneng Titanium released its annual report for 2017, which showed that the company's revenue was 131 million yuan, down 22.28 percent from the same period last year; The net profit attributed to the shareholders of the listed company was-53.395 million yuan, down 9.67 percent from the same period last year, falling short of the target of the business plan, mainly because the prices of raw materials continued to rise and the demand for products was relatively low. And the influence of factors such as large depreciation of fixed assets; Basic earnings per share were-0.35 yuan.

Industry Review:

Basic situation of titanium metal: titanium is considered to be a rare metal because it is dispersed and difficult to extract in nature. But it is relatively rich, ranking tenth among all the elements. Titanium ores are mainly ilmenite and rutile, which are widely distributed in the crust and lithosphere. Titanium also exists in almost all organisms, rocks, water bodies and soils at the same time. The extraction of titanium from major ores requires the Kroll method or Hunter method. The most common compound of titanium is titanium dioxide, which can be used to make white pigments. Other compounds include titanium tetrachloride (TiCl4) (used as a catalyst and used in the manufacture of smoke screens or in the air) and titanium trichloride (TiCl3) (used to catalyze the production of polypropylene).

Titanium and titanium alloys are widely used in aviation industry because of their low density, high strength, corrosion resistance, low temperature resistance, resistance to resistance, non-magnetic, non-toxicity, tensile strength and other excellent properties, known as "space metal". In addition, it has been widely used in shipbuilding industry, chemical industry, manufacturing mechanical components, telecommunications equipment, cemented carbide and so on.

The development status of China's titanium industry: China is rich in titanium ore resources. according to statistics, China produced 71022 tons of titanium ingots in 2017, an increase of 6.80 percent over 2016, excluding the output of three new titanium smelting enterprises. In real terms, it increased by 4.28% over the same period last year. Titanium products are used in many important sectors of the national economy in China, and the operation of titanium industry is closely related to the development of the national economy. In 2016 and 2017, the application of titanium resources in China is mainly concentrated in chemical industry, electric power, aerospace, metallurgy and other fields. In recent years, the scale of China's non-ferrous metal industry continues to expand, the industrial structure continues to optimize, the quality level continues to improve, the ability of international management continues to enhance, and achieved rapid development. But at the same time, under the influence of the international and domestic economic situation, the demand of the non-ferrous metal market is low, the structural overcapacity accumulated by the non-ferrous metal industry for a long time, the imbalance of market supply and demand and other deep-seated contradictions and problems gradually appear. In order to solve the outstanding problems existing in the development of China's non-ferrous metal industry and promote the sustained and healthy development of the non-ferrous metal industry, The State Council has formulated and promulgated the guiding opinions of the General Office of the State Council on creating a good Market Environment to promote the structural Adjustment of the Nonferrous Metals Industry, promote Transformation and increase efficiency, and strive to promote supply-side structural reform, optimize the stock, guide the increment, and take the initiative to reduce the amount of Ensure the sustained and healthy development of the industry.

Market demand: titanium materials are widely used in chemical, aerospace, power, medicine, marine engineering and other fields. Titanium is mainly used in chemical industry and other fields, the future industry pull advantage is obvious, mainly reflected in the aviation, automotive field. Titanium alloy is a kind of light alloy, which is usually used in aircraft fuselage materials, especially titanium alloy has become the key alloy material for aircraft lightweight. According to the relevant data, the average titanium consumption of civil aircraft will rise to 40 tons per aircraft in the next 20 years, the demand for titanium materials will be increased by about 1.6 million tons, and the demand for titanium materials in the field of civil aviation will maintain a rapid growth.

Industry Outlook:

Titanium materials are widely used in chemical industry, aerospace, electricity, medicine, marine engineering and other fields. Titanium is mainly used in chemical industry and other fields, the future industry pull advantage is obvious, mainly reflected in the aviation, automotive field. Titanium alloy is a kind of light alloy, which is usually used in aircraft fuselage materials, especially titanium alloy has become the key alloy material for aircraft lightweight. According to the relevant data, the average titanium consumption of civil aircraft will rise to 40 tons per aircraft in the next 20 years, the demand for titanium materials will be increased by about 1.6 million tons, and the demand for titanium materials in the field of civil aviation will maintain a rapid growth.

Industry risk:

Industry risk caused by macroeconomic impact: the industry in which the company is located is greatly affected by the continued downturn of the global titanium industry, and the upstream and downstream industries are strongly related to the overall thinking of China's macroeconomic development. On the basis of maintaining steady growth, macroeconomic restructuring will be carried out to increase the added value of products and reduce waste emissions, so as to expand production capacity, reduce demand and structural surplus of titanium products, Will lead to titanium processing materials prices have been low, the company in the middle of the industry prices have been hovering low, the company's operating performance will decline. Due to the lack of high-grade titanium ore resources in China, it is inevitable to increase the import of foreign titanium concentrates. at present, the dependence of China's titanium concentrate on foreign countries has exceeded 50%. Although the import of titanium ore has decreased year by year after 2013, it can not change the fact that China's titanium resources have a high degree of dependence on foreign countries. Vietnam has always been the main source country of titanium concentrate import in China, but the Vietnamese government has restricted the export of titanium concentrate since June 2013, resulting in the import and supply of titanium concentrate in China tends to be tight. At present, the dispute between China and Vietnam in the South China Sea has also increased the uncertainty of China's titanium import.

The industrial structure is in urgent need of adjustment: after the rapid development since the new century, the annual production capacity of sponge titanium in China has reached 1.5 × 105 tons, and the annual production capacity of titanium ingots has reached 1.24 × 105 tons, while the domestic market demand has slowed down. The actual output in 2014 is 67825 tons and 57039 tons respectively, the operating rate is insufficient, and most enterprises are in the production positioning of low-end products, product convergence, fierce competition, low efficiency. On the other hand, in the research and development and production of aviation, medical and other high-end products, domestic enterprises are still unable to meet the domestic development needs, aviation titanium alloy materials and medical titanium alloy materials and other high-end titanium products still need to be imported. As a result, China's titanium industry is in a structural surplus. The problems of titanium industrial structure adjustment and overcapacity need to be discussed and solved by the state, local and enterprises.

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