Titanium Market Supply-Demand Imbalance Persists: Can the September-October Peak Season Break the Deadlock? [SMM Analysis]

August TiO2 production rebounds while inventory builds, prices drift lower

In August 2026, SMM China TiO2 production edged up 0.3% MoM, but producer inventory accumulated in tandem, up 0.34% MoM. On the pricing front, TiO2 remained broadly weak in August. As of August 31, the average price of rutile TiO2 closed at 13,650 yuan/mt (down 6.5% MoM), anatase averaged 12,500 yuan/mt (down 7.4% MoM), and chloride-process averaged 16,150 yuan/mt (down 0.62% MoM).

The TiO2 market stayed weak overall in August, with the price center continuing to shift lower. The monthly production rebound mainly came from resumed supply at previously idled or curtailed producers, adding incremental pressure to the market. Meanwhile, some enterprises still opted for maintenance shutdowns amid uncertainty, leaving the supply side in a divergent pattern. Top-tier players and producers with quality downstream client resources achieved relatively better production-sales balance, but many enterprises faced significant sales pressure. To seize market share, recover funds, and dilute fixed costs, they did not proactively restrict production and kept operations running.

On the demand side, the Chinese market has yet to show clear signs of recovery, with the industry dominated by just-in-time procurement. Downstream end-users continued to digest their own inventory and, given cautious judgment on the outlook, have not yet engaged in concentrated restocking. On exports, following the pullback in July, foreign trade still carries weakening expectations, with export pressure further intensifying the supply-demand imbalance.

In the short term, although some enterprises have signaled price adjustment intentions based on cost support, actual transactions have not picked up volume, and downstream demand follow-through remains insufficient. The traditional September-October peak season has yet to deliver effective positives, and the existing supply-demand pattern is difficult to repair quickly. TiO2 prices are expected to remain under pressure. In the medium and long term, industry pricing will gradually focus on price guidance from top-tier players, with price anchors increasingly driven by raw material costs such as sulphuric acid. Supply-side inventory digestion still needs time, and small and medium-sized producers are gradually exiting the market. On the demand side, the market awaits export policy-driven order release, and the supply-demand imbalance is expected to improve slowly.

August titanium sponge production fluctuates at highs, prices in the doldrums under pressure

In August 2026, SMM China titanium sponge production fell 1.85% MoM. Cumulative production from January to August reached 201,400 mt, up 14.04% YoY. On the pricing front, as of August 31, grade 0 titanium sponge was quoted at 44,000-45,000 yuan/mt, averaging 44,500 yuan/mt, down 1,000 yuan from the start of the month.

The titanium sponge market remained in the doldrums in August. After the collective price cuts in July, end-users maintained only just-in-time procurement. Some enterprises that had planned production cuts earlier did not fulfill their commitments, and with capacity continuing to expand this year, the industry kept production at high levels. In late August, producer quotes loosened again, and downstream buyers increasingly favored negotiated deals. On exports, titanium sponge export orders were mostly executed under long-term contracts, with little overall change.

On titanium materials, some enterprise inventory flowed into the market in Q2, leaving titanium material supply relatively saturated. Combined with stricter export controls and the traditional summer off-season, export orders underperformed this year. Overall, titanium materials showed a weak supply-demand pattern on both sides, further suppressing procurement demand for titanium sponge.

Looking ahead to Q4, the September-October peak season expectations are similarly unlikely to materialize in the titanium metal market. Projects in new energy and other sectors are unlikely to be implemented quickly in the short term, and titanium sponge prices will remain under pressure. In the medium and long term, as inventory is gradually digested and domestic demand growth is released, prices are expected to rebound.