Titanium dioxide "bull market" has ended?

Recently, the market price of titanium dioxide in China has continued to decline for the first time in more than one year. On June 8, the average price of rutile titanium dioxide in East China has returned to about 18,450 yuan/ton, which is close to the decrease of 19,400 yuan/ton on May 20. 1000 yuan / ton, which part of the company's product market prices have fallen more than 2,000 yuan / ton, whether it means that this round of the "bull market" has ended?

After the market price of titanium dioxide in China reached the end of 2015 at the end of the year, the market generally agreed that this is a reasonable rebound cycle and is a normal reflection of the return of value and market leverage. However, no one expected the titanium dioxide market to change from a rebound to a reversal, and then went out of a wave of “mad cow” prices. Typical prices of products such as rutile titanium dioxide in eastern China rose from 9,800 yuan/ton in early December 2015 to In late May of 2017, the price of 19,400 yuan/ton, the price per ton of product rose within 18 months to nearly 10,000 yuan, and the corresponding price of 19,400 yuan/ton last appeared in mid-June 2012, the last round The decline took 42 months. Some industry observers believe that titanium dioxide companies have frequently adjusted their prices in the past year or more, and the time and amount of price increases for each round have been surprisingly coincidental. This should be the result of tacitly agreed price hikes among large companies. The effect of implementation in 2016 is very obvious. Thus, when price increases have become a habit, then there are gradually regular rules.

Since 2017, the industry has basically summed up two rules for the market price increase of titanium dioxide: First, the boss leads, and everyone keeps up; second, it starts once a month and ends at the end of the month.

However, by the time it was late in May 2017, the market was unusually calm, and the “leader-in-charge” assembly number expected by the industry has never been heard! So, there was a problem. Some traders started to throw cargo, but they encountered the dilemma of no one receiving the order. Normal prices may not be required, and cheaper prices may only be sold cheaper and the price market is becoming more and more chaotic.

Since then, the domestic market has started to divide at two levels. Some producers have been affected by the pressure of shipments, and prices of some products have begun to drop. Another part of the manufacturers has steadily promoted production and stabilized the market price by relying on exports and old orders.

The domestic “leader brother” temporarily hibernates, and foreign industry big brothers decided to pick up the banner.

Prior to the beginning of October 2016, when the price of titanium dioxide in the Chinese market started to fall, and the transaction price was inversely related to the factory price of the company, Chemours released the price increase in the Asia-Pacific region in time. At that time, there was no doubt given The domestic titanium dioxide producer ate a reassurance pill. As a result, the prices of titanium dioxide remained firm upwards after most of the paint raw material prices fell.

In the face of signs of weakness in the market, international titanium dioxide giants such as Cristal and Huntsman jumped out in the air in late May and announced high prices in succession on June 1. news.

However, the market did not improve as expected, and the focus of the transaction price fell downwards every day.

No way, Kemu company had no choice but to announce on the face of June 8 that due to July 1, 2017, all specifications of Ti-Pure? titanium dioxide sold in the Greater China region will be increased by US$200/tonne. Special models Such as R-960, TS-6200, TS-6300, R-105 and R-108 will increase the price of 300 US dollars / ton.

This time, can Kemu once again turn the tide and drive the “bull market” that has been turned back up again?

The analysis shows that for the current large-scale first-line companies, their supply order is mainly exports - direct supply - dealers. In other words, the first source of goods produced every month guarantees exports. The export volume of mainstream companies can account for about 0% to 40% of their total output, and some enterprises can account for about half, followed by direct supply end customers, accounting for about 30% to 40% of the total. Sales. Therefore, when the export and downstream markets are in strong demand, the products produced by titanium white enterprises are basically exported every month or to downstream factories. Sometimes it is difficult for major distributors to get their contract amount every month and they can only wait. However, once there are problems in the export and consumer markets, first-tier brand companies can only bow to dealers.

For some second and third-tier brands of small and medium-sized enterprises, the sales pressure will be greater, the export volume is difficult to expand, mainly based on domestic sales, coupled with the lack of differentiated advantages, the company's shipping is difficult to have obvious competitiveness. In the current situation of a decrease in the overall new unit volume, sales pressures for small and medium sized titanium dioxide companies are increasing. Although ostensibly following the mainstream companies’ strategy of maintaining stable prices, they actually adopt a single strategy in the overall transaction, resulting in In the market downturn, these companies have taken the lead in cutting prices.

In terms of cost, the price of titanium concentrates has dropped sharply in recent years. The prices of titanium ore with 38 or more grades in Panxi region are around 850-900 yuan/ton (excluding tax), and the prices for 46 grade 10 titanium concentrates are between 1,400 and 1,650 yuan/ton ( Excluding tax), large miners are quoted at around 1880-1930 yuan per ton (excluding tax).

Compared with the high point of April 20, the price of titanium concentrate has fallen by more than 21%. Buyers waited more and more, and there were fewer market enquiries. The confusion in quotation caused the order volume of miners to shrink significantly. Small miners with strong mobility were subject to high inventory pressure and strong willingness to ship, so they kept pulling down the market. The transaction price may even have a small amount of transaction records of 1300 yuan/ton (excluding tax).

The Panzhihua Fengyuan Mining 46 grade 10 titanium concentrate is about to be put into production, and the pressure at the supply side will increase again.

The drop in cost pressure will be an important support for titanium dioxide manufacturers to further open up the price reduction space.