[SMM Analysis] Titanium Dioxide Output Rises Slightly in August, Prices and Demand Decline

Titanium Dioxide Production Rebounds in August While Inventory Builds, Prices Drift Lower

In August 2026, SMM China titanium dioxide production edged up 0.3% MoM, but producer inventory accumulated in tandem, rising 0.34% MoM. On the pricing front, titanium dioxide prices drifted lower overall in August. As of August 31, the average price of rutile-type titanium dioxide settled at 13,650 yuan/mt (down 6.5% MoM), anatase-type averaged 12,500 yuan/mt (down 7.4% MoM), and chloride-process averaged 16,150 yuan/mt (down 0.62% MoM).

The titanium dioxide market remained weak overall in August, with the price center continuing to shift lower. Monthly production reached 339,700 mt, up 0.3% MoM, mainly driven by resumed supply from enterprises that had previously halted or cut production, adding incremental pressure to the market. Meanwhile, some producers still opted for maintenance shutdowns to navigate uncertainty, resulting in a divergent supply-side landscape. Top-tier players and producers with quality downstream client resources achieved relatively balanced production and sales, but many enterprises faced significant sales pressure. Driven by considerations of market share, cash recovery, and fixed-cost dilution, they did not proactively restrict output and continued to maintain production.

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 draw down their own inventories and, given cautious judgments on the market outlook, have not yet engaged in concentrated restocking. On the export front, following the pullback in July exports, foreign trade still carries weakening expectations, and export pressure has further intensified the supply-demand imbalance.

In the short term, although some enterprises have signaled price adjustment intentions based on cost support, actual transaction volumes have not expanded, and downstream demand follow-through remains insufficient. The traditional September-October peak season has yet to deliver effective positive catalysts, and the existing supply-demand pattern is difficult to repair quickly. Titanium dioxide market is 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 requires time, with small and medium-sized producers gradually exiting the market. Demand side, the market awaits export policy-driven order releases, and the supply-demand imbalance is expected to improve slowly.

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

In August 2026, SMM China sponge titanium production was 26,600 mt, down 1.85% MoM; cumulative production from January to August was 201,400 mt, up 14.04% YoY. On the price side, as of August 31, grade 0 sponge titanium closed at 44,000-45,000 yuan/mt, with an average price of 44,500 yuan/mt, down 1,000 yuan from the beginning of the month.

The sponge titanium market remained in the doldrums in August. After the collective price cuts in July, end-users only made just-in-time procurement, and some enterprises that had previously planned production cuts failed to deliver on their commitments. Combined with continued capacity expansion this year, the industry maintained production at highs. In late August, enterprise quotes loosened again, and downstream buyers tended to negotiate prices. On the export side, sponge titanium export orders were mostly executed under long-term contracts, with relatively small overall changes.

For titanium materials, some enterprise inventory flowed into the market in Q2, leading to relatively saturated supply of titanium materials. Coupled with stricter export controls and the traditional summer off-season in conventional industries, export orders performed poorly this year. Overall, titanium materials showed a weak supply-demand pattern, further suppressing procurement demand for sponge titanium.

Looking ahead to Q4, the September-October peak season expectations are also unlikely to materialize in the titanium metal market. Projects in new energy and other fields are unlikely to be implemented quickly in the short term, and sponge titanium 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.