Price Trend> Echemi Analysis

Environmental Production Is the Future Development Trend in the Titanium Dioxide

Coco

2017-09-30

1. 2016-2017 Titanium Dioxide Market Review

Titanium dioxide is widely used in many fields, such as coatings, printing ink, papermaking, plastics, etc. Moreover, cosmetics, enamel and glass all need the titanium dioxide.

1

After the slumps in 2015, the titanium dioxide market continued increasing in 2016. The prices for rutile titanium dioxide increased from RMB 9,803/mt at the beginning of 2016 to RMB 14,850/mt at the end of 2016. The prices increased by RMB 5,047/mt or 51.48%.  

In 2017, the Chinese titanium dioxide market showed a reverse V-shape from January to September. The titanium dioxide market increased in the first five months, and then declined in June and July. From August to September, the titanium dioxide market showed an uptrend. From 2016 to 2017, the overall trend was up.

2. Price Change Analysis

Production Cost

Producers’ Profits Shrank on the Increasing Production Cost

The sulfuric acid method is the major production process in China, but this method pollutes the environment. The stricter the environmental protection supervision, the more cost producers will spend. In 2015, the environmental protection cost was in the range of RMB 500-1,000/mt and the cost in some large-sized producers reached RMB 1,500/mt. Currently, the cost has reached around RMB 2,000/mt. Considering the increasing environmental protection cost, titanium dioxide producers have to raise prices.

High-Priced Raw Materials

Titanium concentrate is the major raw material of titanium dioxide and Sichuan is the major region of titanium concentrate production. From 2016, the production had been influenced by the environmental protection supervision. The price for 46% titanium concentrate increased from RMB 510/mt at the beginning of 2016 to RMB 1,500/mt at the end of 2016, which jumped 194%. The increases in titanium concentrate prices promoted the titanium dioxide market. Titanium dioxide market increased by RMB 2,514/mt. In H1, 2017, the titanium concentrate market continued increasing. In mid-April, the titanium concentrate price increased to RMB 1,950/mt. Currently, the supply is still tight, which will ensure the titanium dioxide market.  

Supply

Low Operating Rate in the Titanium Dioxide Market

2

 Influenced by the strict environmental protection supervision, some titanium dioxide producers had to shut units or cut down operating rates from 2016. In 2016, the overall operating rate was 70.52%. In 2017, the operating rate kept decreasing. The operating rate declined from 70.05% to below 50% from the beginning of 2017 to September.

Demand

Increasing Domestic Demand and Promising Export

With the development of Southeast Asian countries, the demand for titanium dioxide will continue to increase. As the quality in these countries is poor, they need to import titanium dioxide fro China. Moreover, around 410kt/a capacity in foreign countries was shut in 2015. China’s export volume of titanium dioxide is increasing.

3. Forecast

High Production Cost

With the normalization of environmental protection supervision, the production cost of titanium dioxide will continue to be high, which will support the sales prices.

Booming Chlorination Process

The environmental protection supervision restricts the sulfuric acid method. China is the biggest producer and is also the biggest demand side, the chlorination process will be encouraged greatly.

More Research of High-End Products

There is still a gap between the Chinese-made and foreign products when taking the quality into consideration. With the improvement of people’s life, people always choose high-end products. So, Chinese producers should promote the quality of products.

 

Source:Echemi
Disclaimer: Echemi reserves the right of final explanation and revision for all the information.

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