Cost pressure and tight supply and demand double boost the collective price increase of titanium dioxide "East China Iron Triangle"

On May 6, the titanium dioxide "East China Iron Triangle" collectively announced its rise, reflecting the two driving forces of cost pressure and tight supply and demand.

China Nuclear Titanium dioxide (002145.SZ) staff, who first announced the price increase, told the Financial Associated Press that the increase in the price of titanium dioxide is due to cost pressure and the relationship between supply and demand in the market.

Tian Xiaoyu, a titanium dioxide analyst, believes that domestic titanium dioxide prices are expected to maintain an upward trend in May, and the key supporting variable is the cost side. If the cost side is not expected to stabilize and weaken, the possibility of turning titanium dioxide prices is very small; in addition, the epidemic in India may threaten domestic titanium dioxide exports.

Cost pressure and tight supply and demand boost the price of titanium dioxide

At noon on May 6, China Nuclear Titanium dioxide took the lead in announcing a price increase; in the afternoon, 002136.SZ and 000545.SZ followed suit. The "East China Iron Triangle" of titanium dioxide increased by 1000 yuan / ton for domestic customers and $150 / ton for international customers.

This is the fifth price increase of medium nuclear titanium dioxide this year. According to the above staff of medium nuclear titanium dioxide, in terms of cost, titanium concentrate and sulfuric acid are on the rise, among which sulfuric acid has a great impact on the company because of its own supply and demand relationship; in terms of supply and demand, this year has been a tight situation of supply and demand, basically how much to produce and how much to sell, the price is in line with the market, and the demand at home and abroad is very good.

According to statistics, by the end of April, the price of 46% titanium concentrate had increased by 150 yuan / ton from the previous month, with an average price of 2450 yuan / ton. On April 29th, the new order guide price of titanium concentrate in Panxi mainstream mining enterprises was increased by 80 yuan / ton. By the end of April, the sulphuric acid market price in Shandong rose by 140 yuan / ton to 570 yuan / ton, and the East China market price rose by 60 yuan / ton to 565 yuan / ton.

Compared with the dual factors affecting the price increase of medium-core titanium dioxide, Anada is more inclined to the demand side. Investors close to Anada said that from Anada's own situation, the price increase in the first quarter of this year was related to higher costs and digesting costs, and this price increase was due to increased demand brought about by limited production capacity of overseas production companies.

It remains to be seen whether there will be more titanium dioxide companies following the rise this month, but the price increase has been basically accepted by the market.

Tian Xiaoyu revealed that since late April, most titanium dioxide enterprises, including anatase, have placed considerable orders on hand, and most major rutile manufacturers have taken orders up to June, and the leading enterprises have more than 60,000 tons of foreign trade orders on hand, indicating that the production links before and after the Spring Festival have received a large number of orders at a low price, which makes the supply side still tight. By the end of April, the operating rate of the domestic industry was 87.11%. With reference to the new market orders at the end of April, the increase in the market in April was basically implemented in the transaction.

Maintain the upward trend in May, the epidemic in India may threaten exports

According to people in the titanium dioxide industry, under normal circumstances, the annual peak season for sales of titanium dioxide is March, April and September, October, and the second and fourth quarters are relatively deserted. When the price of titanium dioxide rose in April this year, there was already a voice in the industry that the price had reached its peak. However, since then, the price of raw materials, including titanium concentrate, and the continued demand have triggered some titanium dioxide enterprises to continue to increase prices.

Tian Xiaoyu believes that the domestic market price of titanium dioxide is expected to maintain an upward trend in May, and the market price of rutile titanium dioxide by sulfuric acid process is expected to be adjusted to 20000-20500 yuan per ton. the current price of titanium dioxide has exceeded a five-year high (2017, 19458 yuan / ton). In the process of further adjusting to the 10-year peak (20500 yuan / ton in 2012), the process of digesting high prices on the demand side is lengthening, and digestion capacity may be weakened. Especially represented by small and medium-sized downstream buyers.

Tian Xiaoyu said that at present, the tight support on the supply side will not be maintained for a long time, because the start-up of foreign suppliers will increase in the next 2-3 months, and the key supporting variable of the price in May is the cost side, which is not expected to stabilize and turn weak. the possibility of a turn in titanium dioxide prices is very small.

But the titanium dioxide industry is not at ease, and the growing epidemic in India is threatening exports. India is China's largest exporter of titanium dioxide, accounting for 12.07% of China's titanium dioxide exports as of March this year, according to the latest figures. According to the latest data released by the Ministry of Health of India on May 6, as of 8: 00 local time, in the past 24 hours, there have been 412262 confirmed cases of COVID-19 in India, with the number of novel coronavirus cases increasing by more than 300000 for 15 consecutive days.

According to the above-mentioned person in the titanium dioxide industry, the Indian manufacturers cooperating with China Nuclear Titanium dioxide are the leading enterprises in India, and most of them are located in well-developed areas of India, and the epidemic has been well controlled. Compared with the current situation, it will not affect the company's exports because of the epidemic. On the contrary, the cooperative Indian enterprises have an increase of about 30%, 50%, and Indian orders from other large domestic titanium dioxide companies have also increased.

However, Tian Xiaoyu suggested that if the epidemic in India continues to worsen, there may be a backlog of goods due to unreceived goods at the port, Indian buyers do not have enough people to engage in production, or lack of a stable production order, and so on. All these will affect the exports of domestic titanium dioxide enterprises.