Titanium dioxide enterprises have increased the iron phosphate capacity industry insiders: the enterprise has a cost advantage, and the downstream demand is exuberant.

In the first half of 2021, the cumulative output of domestic lithium iron phosphate batteries was 37.7GWH, an increase of 334.4% over the same period last year. According to industry organizations, lithium iron phosphate will develop at a high speed in the next two years, and the total production capacity of the industry is expected to exceed 1 million tons, bringing a huge demand for iron phosphate. Affected by this, recently, many enterprises began to expand the production of ferric phosphate projects, including a number of titanium dioxide enterprises.

Titanium dioxide enterprises add iron phosphate

The price of lithium iron phosphate rose sharply in the first half of 2021, and the price of iron phosphate as a raw material is now 15000 yuan / ton, up about 25% from the beginning of the year. However, at present, the larger domestic suppliers are only Tongling Nayuan Materials, Heavenly Gift Materials (002709.SZ), and a few companies such as Hunan Yuneng.

Wang Xianlong, Dong Secretary of Tongling Nayuan material parent company 002136.SH, told the Financial Associated Press that Nayuan Materials has a full design capacity of 50, 000 tons and will achieve mass production in the second half of this year. In addition, the company also cooperates with Hunan Yuneng to set up a new company to build a new production capacity of 50, 000 tons of iron phosphate, and the company's controllable iron phosphate capacity will reach 100000 tons in the future.

It is worth noting that in addition to Anada, other titanium dioxide enterprises have also announced the addition of iron phosphate projects. On the evening of July 25th, Longbai Group, the largest titanium dioxide manufacturer in China, announced that its subsidiaries planned to set up a joint venture with Hubei Wanrun New Energy to build a 100000-ton iron phosphate production line.

At the same time, in February this year, China Nuclear Titanium dioxide (002145.SZ) announced that it was planning to build a 500000-ton iron phosphate production project in Gansu. Subsequently, in May this year, China Nuclear Titanium dioxide released a fixed increase plan of 7.1 billion yuan, of which 3.385 billion yuan is planned to be invested in the annual production of 500000 tons of iron phosphate project. The overall construction period of the project is 36 months, including 24 months for the first stage of 100000 tons / year iron phosphate construction and 36 months for the second stage of 400000 tons / year iron phosphate construction cycle.

Why are titanium dioxide enterprises so keen to invest in iron phosphate projects? In this regard, Song Jing told the Financial Associated Press that the desire of titanium dioxide enterprises to expand production, in addition to the current hot lithium iron phosphate battery industry, for them, the production of iron phosphate can be used for reproduction of ferrous phosphate, a by-product of titanium dioxide made from sulfuric acid. Greatly save production costs. In addition to titanium dioxide enterprises, since the beginning of this year, Tianzhi material has announced a new production capacity of 300000 tons, Sichuan Chuanheng Holdings has a new production capacity of 100000 tons of iron phosphate project.

The share prices of related listed companies have risen greatly.

Titanium dioxide enterprise layout of iron phosphate, but also to the enterprise performance and stock price brought good. According to Anada's latest semi-annual report, the company's net profit in the first half of 2021 is expected to be 73.8756 million yuan to 92.3445 million yuan, an increase of 100% and 150% over the same period last year.

In this regard, Anada Dong Secretary Wang Xianlong told the Financial Associated Press that iron phosphate does provide support for the company's performance, and the future is the company's second main business of vigorous development. Iron phosphate has a gross profit margin of about 25 per cent, and Anada plans to produce 24000 tons this year, with sales of more than 300m, accounting for more than 20 per cent of the company's total revenue. Once the total production capacity of 100000 tons is put into production, the annual sales will be more than 1.5 billion yuan, accounting for at least half of the company's total revenue.

Affected by the concept of iron phosphate, Anada's share price has risen rapidly since this year, with the share price doubling in June alone and closing at 16.03 yuan as of July 29. The share price of another company, medium Nuclear Titanium dioxide, has also soared this year, more than tripling from 5.62 yuan at the beginning of the year to 17.67 yuan on the 29th.

In addition, according to the quarterly report released by Tianci Materials, the company achieved revenue of 1.562 billion yuan, an increase of 197.47% over the same period last year, and a net profit of 287 million yuan, 91.15%. In terms of share price, Tianci shares doubled in two months after the removal of rights in April this year, closing at 104.66 yuan as of July 29.