Annada: Intensified Market Competition for Titanium Dioxide and Iron Phosphate 2024 Net Profit Down 82.5 YoY

On March 22, Annada released its 2024 annual report, showing that in 2024, the company achieved operating revenue of 1.89 billion yuan, down 10.6% YoY; net profit attributable to shareholders was 11.26 million yuan, down 82.5% YoY.

Annada introduced: In 2024, China's titanium dioxide industry's total production reached a new historical high. According to the General Administration of Customs, China's titanium dioxide exports in 2024 totaled 1.9015 million mt, an increase of 260,000 mt, up 15.83% YoY, while imports totaled 92,000 mt, an increase of 7,500 mt, up 8.92% YoY. During the reporting period, both domestic and overseas consumption markets for titanium dioxide grew, with the recovery in domestic market demand and the boost from export demand driving the overall industry production. The supply-demand structure of domestic titanium dioxide remained unbalanced, with major manufacturers adopting a strategy of selling at low margins but in large volumes. Prices peaked in April and then steadily declined, ending the year at a low level. In 2024, domestic iron phosphate production was 2.0276 million mt, up 47.87% YoY from 1.3712 million mt in 2023. The iron phosphate market continued to experience growing demand alongside intensified competition, with prices slowly climbing throughout the year but remaining at a low level. Compared to last year, the performance of leading companies in iron phosphate and LFP saw varying degrees of decline.In 2024, the company produced a total of 94,400 mt of titanium dioxide (including 93,400 mt of rutile and 1,000 mt of anatase), completing 94.45% of the annual plan; it produced 66,600 mt of iron phosphate, completing 55.48% of the annual plan; it sold 94,500 mt of titanium dioxide (including 93,300 mt of rutile and 1,100 mt of anatase), completing 94.46% of the annual plan; it sold 65,500 mt of iron phosphate, completing 54.60% of the annual plan; and it achieved main business revenue of 1.887 billion yuan (of which Nanyuan Company contributed 593 million yuan).In 2024, the company optimized its marketing channels and improved the gross profit margin of product sales. Facing the external environment of increased competition in the titanium dioxide and iron phosphate markets, the company first focused on optimizing inventory management, achieving a basic balance between production and sales throughout the year. In terms of sales channels, the company developed 26 effective end-user customers (15 for foreign trade and 11 for domestic trade) and optimized the structure of direct sales, domestic sales, and foreign trade markets, enhancing the profitability of each unit of product, resulting in the gross profit of the titanium dioxide segment being basically flat compared to last year.

Regarding its main products, Annada stated in its 2024 annual report: The company is primarily engaged in the R&D, production, and sales of titanium dioxide products, with main products including rutile and anatase titanium dioxide series. The current capacity is 100,000 mt. The company's "Anada" brand titanium dioxide has been awarded the title of "Anhui Famous Brand Product"; as a long-established titanium dioxide producer, it enjoys a high reputation in downstream industries. The company's subsidiary, Tongling Nanyuan, is involved in the R&D, production, and sales of iron phosphate products, with main products being iron phosphate series. The current total capacity is 150,000 mt. As one of the earlier companies to enter the lithium battery sector, the company has accumulated mature and stable technology and production processes in iron phosphate production and R&D. In 2024, the company's titanium dioxide sales were 94,500 mt, down 7.82% YoY, while the subsidiary's iron phosphate sales were 65,500 mt, up 5.48% YoY.

Outlook for Annada's future development

In its 2024 annual report, Annada mentioned the following outlook for the future:

The main production and operation plans for 2025 are as follows:(1) Production: 100,000 mt of titanium dioxide; strive for 100,000 mt of iron phosphate; Sales: 100,000 mt of titanium dioxide; strive for 100,000 mt of iron phosphate(2) Collection of receivables: 100%; Environmental protection: all pollutants meet emission standards.

Annada stated: To ensure the achievement of the annual production and operation targets, the following key tasks must be prioritized: 1. Maintain stable and efficient production to increase output and efficiency. Focus on capacity enhancement, eliminate bottlenecks in equipment and processes, and ensure the efficient operation of production facilities, thereby improving production efficiency, reducing costs, and achieving economies of scale. In 2025, the company will implement comprehensive capacity optimization and transformation. In production, strengthen scheduling, refine task breakdowns, enhance target assessment, and organize balanced production. In equipment, implement three major policies: improve equipment reliability, enhance site appearance, and prevent material spillage. Promote digital and intelligent upgrades, increase automation points, reduce manual operation points, achieve a self-control usage rate of ≥90%, and 100% online monitoring of critical equipment. In each workshop, strengthen key technical improvements to ensure stable production, achieve multi-point automation, break through equipment bottlenecks, and achieve steady quality and increased output. Persist in using project transformations to drive capacity increases, laying a solid foundation for capacity enhancement. 2. Insist on innovation-driven quality and efficiency improvements. Quality is the lifeline of the enterprise, and innovation is the primary driver of development. The technical center should lead with innovation, continuously explore new fields, paths, and advantages, focusing on new product development and research on new processes, technologies, and equipment. In 2025, develop new products to further expand the application market. Promote the study of specialized rutile titanium dioxide process technology for the mid-to-high-end plastic field, improving key application performance indicators such as whiteness and filtration pressure to meet downstream customer needs. Benchmark against advanced ink-specific products in the industry, develop specialized rutile titanium dioxide for the ink field, and enhance product performance. Research and develop hydrolysis process technology, control the hydrolysis crystallization process, and create conditions for the development of various product models. Research and develop continuous coating technology to improve production efficiency, reduce energy consumption, and lower labor intensity. Each production workshop should focus on quality and efficiency improvements, conduct training and education, and enhance the awareness of quality and responsibility among all employees. 3. Persist in multiple measures to reduce costs and increase efficiency. Through equipment optimization, improving resource utilization, reducing waste, and lowering energy consumption, make efforts in multiple areas to advance cost reduction and efficiency improvement, achieving the goal of reducing the cost per ton of titanium dioxide. Each production workshop and functional department should adapt to the changes in budget management, firmly establish the concept that "all costs are controllable," and widely explore the potential for cost reduction and efficiency improvement in various business areas and production links. Continuously strengthen operational control measures, focus on cost reduction and efficiency improvement points, and through management optimization, repair and reuse, cost control, and technological innovation, deeply tap into and carefully calculate, both looking at the big picture and controlling the details, to achieve cost reduction and efficiency improvement through multiple measures. 4. Persist in upgrading safety and environmental protection. In terms of safety, promote HSE responsibility management, optimize and improve the duty lists and regional safety responsibility assessments for each department and position. Promote personal safety action plans and safety commitments for middle and senior management, implementing safety leadership. Promote the implementation of the excellent manufacturing system - safety and environmental protection elements, sort out, establish, and improve relevant safety and environmental protection management systems. Use information and intelligent means to improve the current situation of inadequate safety training, understanding, and practice. Improve the reporting, analysis, and implementation of accident events, emphasizing the forward shift of risk management, integrating the work of identifying and analyzing significant hazards and accidents into management, and improving risk management levels. In terms of environmental protection, strengthen project environmental impact assessment work and enhance environmental protection controls. Through training, improve the management knowledge and skills of internal personnel regarding online monitoring equipment, and increase the management and assessment of third-party operation and maintenance units. Based on the self-monitoring requirements of the discharge permit and the actual production of the company, carry out monitoring work, promptly verify the monitoring results, and report to the environmental protection bureau. Establish an environmental facility ledger for each workshop, improve the operation rate, integrity rate, and pollutant treatment rate of facilities, and solidly promote the upgrade of the company's environmental governance level. 5. Persist in accelerating and advancing project development. Use project construction as the engine to address current "shortcomings" and focus on long-term development advantages, enhancing comprehensive competitive strength by seizing development opportunities. Benchmark against industry leaders, actively carry out process optimization and technological iteration, and enhance market competitiveness. 6. Persist in lean management to improve and empower. The ultimate goal of lean management is to improve efficiency and increase benefits, thereby achieving high-quality development of the enterprise. The sales company should focus on expanding foreign trade sales, achieving a 100% balance between production and sales, and a 100% collection rate of receivables. In asset management, strictly follow the investment approval process for new and technological transformation projects, and conduct investment and economic evaluations of projects. In procurement, the supply department should establish a price adjustment mechanism with suppliers based on market monitoring and analysis, reducing procurement risks. Innovate procurement thinking. Implement detailed internal division of labor for procurement personnel, subdivide materials, improve management, and create benefits through meticulous efforts. 7. The iron phosphate sector must face challenges and seek development. In 2025, the domestic iron phosphate industry will be highly competitive, with increasing differentiation among companies. The company must rise to the challenge, promote customer validation, and achieve bulk supply. Fully utilize the production capacity of the facilities, remove bottlenecks, and ensure the smooth operation of the production process, comprehensively promoting technological transformation. Focus on quality control, prioritize key project construction, and improve product cost reduction and quality. Broaden sales channels, incorporate new products into the procurement systems of long-established customers. Prevent financial risks, ensuring timely and full collection of receivables. Effectively reduce inventory, lower procurement costs, and improve procurement efficiency. The production system should persist in cost reduction and efficiency improvement, enhancing the market competitiveness of products.

Regarding titanium dioxide:

》View SMM titanium dioxide spot prices

》Order to view SMM metal spot historical prices

A review of the historical price trend of SMM rutile titanium dioxide shows: In 2024, with the gradual commissioning of new capacities in the titanium dioxide industry, although the downstream demand for titanium dioxide remained robust, the increase in new capacity exceeded the increase in demand, leading to an overall oversupply in the titanium dioxide market, and the price center of titanium dioxide also shifted downward. A review of the historical prices of rutile titanium dioxide shows: On December 29, 2023, the average price of rutile titanium dioxide was 15,850 yuan/mt, and on December 31, 2024, the average price was 14,500 yuan/mt, with the average price in 2024 falling by 8.52%. The weak downward trend in titanium dioxide prices also put pressure on many titanium dioxide producers.

Since entering 2025, after undergoing maintenance and pre-holiday stockpiling, the supply and demand relationship in the titanium dioxide market changed due to tight spot market supply, leading several titanium dioxide companies to issue two rounds of price adjustment letters in late January and late February. According to the latest SMM quotes, the average price of SMM rutile titanium dioxide on March 24 was 14,600 yuan/mt, and this average price has remained consistent since mid-to-late February.

Regarding iron phosphate:

》Click to view the SMM metal industry chain database

A review of the 2024 market performance of iron phosphate shows:

At the beginning of 2024, affected by the Chinese New Year holiday, the operating rates of iron phosphate companies decreased, and production declined. Market demand did not significantly improve, leading to insufficient production momentum in February. Meanwhile, downstream LFP cathode and battery cell manufacturers continued to pressure prices to reduce costs, putting significant price pressure on iron phosphate companies. In Q2, with substantial demand growth from downstream LFP cathode and battery cell manufacturers, the price war in the NEV market significantly boosted auto sales, gradually warming up the iron phosphate market. Starting from March, iron phosphate companies received more orders, their operating rates increased, and market supply grew. By the end of the year, influenced by rising raw material prices and changes in the supply-demand relationship, the cost of iron phosphate increased. Coupled with strong year-end sales volume demands, this undoubtedly gave long-suffering iron phosphate companies the confidence to stand firm on quotes, leading to signs of price increases in late December.Q4 saw a "once-in-a-century" year-end peak season for iron phosphate. The 2024 iron phosphate market experienced a tortuous development process, showcasing a complex and ever-changing market situation. Facing issues such as losses, price competition, and supply and demand fluctuations, companies in 2025 actively sought solutions and looked ahead to future development trends to formulate reasonable market strategies, addressing potential market risks and seizing development opportunities. Iron phosphate enterprises can only forge ahead and strive with all their might to establish a foothold in the fierce market competition. As the industry becomes increasingly concentrated, the survival of the fittest in terms of capacity has become even more ruthless. Companies must compete in multiple aspects including capital, technology, management, and resources, enduring the trials and tribulations of time. Only by overcoming hardships and ultimately finding a way out in the intricate business jungle can they look back and marvel at how they have navigated through treacherous mountains, turning a corner to await the blossoming of flowers.

Recommended reading:

》[SMM Analysis] 2024 Year-End Review of the Iron Phosphate Market - Navigating Through Adversity and Challenges, Looking Forward to the Light of Hope