Chinese titanium dioxide market supply or demand tightened or normal
June 22, 2022
According to the analysis report of the "Titanium Dioxide Industry Market Demand Analysis Report" released by the Industry Research Institute of Forward-looking Industry, the domestic demand growth of titanium dioxide in 2017 and 2018 will be 10% and 8% respectively, that is, domestic demand will increase by 210,000 tons in 2017 ( 150,000 tons of paint, 30,000 tons of plastic, and 30,000 tons of paper. In 2018, domestic demand increased by 180,000 tons (120,000 tons for coating, 30,000 tons for plastic, and 30,000 tons for papermaking). Demand growth rate is higher than the growth rate of production capacity so that the titanium dioxide industry supply and demand balance further tightened.
About 60% of titanium dioxide is used in the paint industry,pvc resin and is mainly used for architectural coatings. Therefore, the demand for titanium dioxide is highly related to the real estate industry. It is a typical real estate post-cycle industry. The area of house sales is the most significant indicator of the demand for titanium dioxide. Combined with the growth rate of housing sales area and the lag time for coating consumption, the growth trend of demand for titanium dioxide can be generally prejudged.
It is reported that in the first three quarters of the year, the national investment in real estate development reached 8,044.4 billion yuan, an increase of 8.1% year-on-year, an acceleration of 2.3 percentage points over the same period of last year. Among them, residential investment increased by 10.4%. The area of new housing starts was 1,13.33 million square meters, which was a year-on-year increase of 6.8%, of which the newly-started residential area increased by 11.1%. It can be predicted that with the recovery of the paint industry, the market of Melamine Powder demand for titanium dioxide will grow normally.
Since 2016, titanium dioxide and Sodium Hexametaphosphate has entered an upward trend in price increase. Whether the price or the spread has hit a new high since the current round of rise, the desire of production enterprises to increase production and resume production has been very strong. Production companies that have the ability to increase output and resume production have also basically completed The increase in production and production, the actual operating rate of the industry is very high, some leading companies even exceeded the operating rate of 100%, so in the short term, titanium dioxide depends on the operating rate of increase and the potential for increased output is limited.
In addition, after the introduction of the strictest “Environmental Protection Law” in 2015, the government’s environmental protection department has increased its pollution law enforcement penalties for titanium dioxide production enterprises. A group of small and medium sized titanium dioxide production enterprises with serious pollution and lack of environmental protection measures were forced to withdraw. Production, while large-scale titanium dioxide production companies are also required to increase environmental protection equipment or enhance the level of environmental protection. With the increase of sewage requirements and the increase of sewage charges, the environmental cost will be higher and higher.
The current environmental trend has brought about significant uncertainty for the production and operation of small and medium-sized titanium dioxide production enterprises. The conservative estimate of the production capacity is 300,000-500,000 tons/year. The inventory of titanium dioxide began in the second half of 2016, showing a gradual decline. Although it has recovered slightly recently, it is still at a historical level as a whole, reflecting a tight supply and demand pattern.
In 2016, the global titanium dioxide consumption was 6.2 million tons. China has now become the world's largest consumer of titanium dioxide, accounting for nearly one-third of global demand in 2016. Moreover, in 2016 China replaced the United States as the world’s largest exporter of titanium dioxide pigments. Some agencies predict that the annual average growth rate of titanium dioxide in China will be 5.6% from 2014 to 2019, and the consumption of titanium dioxide in China in 2019 will reach more than 2.85 million tons.
