Sponge Titanium supply tight titanium dioxide season or will lose color

In August, the domestic titanium ore market remained stable and the market price was unchanged from the previous month. In August, the operating rate of Panzhihua small and medium-sized factories was slowly rising, while the large factories were basically full-load production, and the supply of domestic titanium ore was sufficient. Imported titanium ore, due to the port titanium mine inventory is still large, the competition between traders is still fierce, but supported by cost, the profit margin of imported titanium mine has been very limited, the price is also multi-dimensional stability.

The price of Panzhihua Dachang is still stable at 1200 yuan~1250 yuan/ton without tax. The price of surrounding small factories does not include tax 1130 yuan~1170 yuan/ton. The mines in Australia and Mozambique have a tax of 1,500 yuan to 1600 yuan. Tons, Vietnam A mine contains tax of 1,800 yuan / ton, the same as the previous month. The price of rutile this month has remained basically unchanged, with 95% rutile offer strong. The outer plate of rutile is still at a high level. Recently, Iluka also said in the first half of the financial report that the price of high-grade titanium raw materials will increase by 14% in the second half of the year, which includes natural rutile. At present, 95% rutile in Australia, Ukraine and South Africa are between US$1,100 and US$1,200/ton, and the price is significantly higher than the domestic market.

After entering August, some areas of China ushered in a new round of environmental supervision, and some titanium slag enterprises and downstream users' production were affected. As the price continues to be low, the northern titanium slag enterprises are less motivated to produce, and some titanium slag enterprises have further reduced production. Although the downstream enterprises have better market prices, they are forced to shut down due to environmental factors, resulting in a simultaneous decline in demand for high-titanium slag. Therefore, the current high titanium slag market is still in a state of general balance between supply and demand, but the operating rate is further reduced and the idle capacity is further increased.

At present, domestic acid slag prices have not changed significantly, but the overall situation of acid slag market is better than high titanium slag. First, the operating rate of acid slag enterprises is higher than that of high titanium slag enterprises. The downstream titanium dioxide enterprises have a relatively stable demand for acid slag, which ensures the operating rate of acid slag enterprises. Second, the acid slag profit is superior to the high titanium slag. At present, acid slag enterprises are still in a state of small profit, and many high-titanium slag enterprises are already in a state of cost inversion. Third, acid slag companies have the right to bargain on product pricing, while high-titanium slag companies do not have bargaining power at all. At present, the price of high-titanium slag is completely controlled by downstream leading enterprises, while acid slag enterprises can negotiate prices and payment methods with customers through negotiation. Some acid slag companies can also choose a better customer to sign a supply contract according to their own situation. In contrast, acid slag companies have more initiative than high titanium slag companies.

This month, titanium tetrachloride and titanium sponge continue to maintain the price increase model. Among them, the price of titanium tetrachloride rose once in the beginning and the middle of the month, and the monthly increase was 500 yuan to 600 yuan / ton. The price of titanium sponge has been raised at the beginning of the month and at the end of the month, with a monthly increase of 4,000 yuan to 5,000 yuan / ton. Affected by environmental factors, titanium tetrachloride production remained at a low level, which led to the shortage of raw materials for many semi-process sponge titanium enterprises, which in turn affected the production of titanium sponge. Under the influence of the lack of supply and strong demand, the sponge titanium enterprises have sufficient orders, and the major producers have already pre-sold the production in October.

The titanium dioxide market in August was in the traditional low season. Different from previous years, in the off-season this year, the domestic titanium dioxide enterprises performed relatively calmly. Although the market demand was not good, there was no previous price cut, which made the price of titanium dioxide in this month basically consistent with last month. On the other hand, the enhanced competitiveness of domestic titanium dioxide has also effectively improved the market situation. The export volume of several titanium dioxide enterprises in China has maintained a growth trend. In the case of a weak domestic market, the proportion of exports has increased, which has effectively eased the sales pressure of enterprises. As the peak season approaches, the downside risk of the titanium dioxide market will gradually fade.

Future sponge titanium production will still be insufficiently supplied by trapped raw materials

At present, domestic demand for titanium sponge is in short supply, mainly due to insufficient supply of titanium tetrachloride, and this situation continues for a long time.

The author understands that at present, domestic titanium tetrachloride enterprises are generally faced with environmental supervision, and many titanium tetrachloride plants have reduced production and stopped production. At present, major enterprises in Liaoning, Hebei, Henan, Hubei and other major titanium tetrachloride production areas have adopted measures to reduce production and stop production due to environmental factors. In the long run, this situation is difficult to fundamentally improve. In September, Hebei will usher in a new round of environmental supervision, and enterprises in Hebei will be affected to further reduce production, and may even completely stop production. In October, Liaoning Province will once again conduct a higher level of environmental supervision, which will lead to the suspension of several titanium tetrachloride enterprises in Liaoning.

To get rid of the bottleneck of the supply of titanium tetrachloride, it is necessary for the sponge titanium enterprise to have a full-process production supply. At present, only Zunyi Titanium has the capacity to increase production, and other sponge titanium enterprises with full-process technology have released their production capacity and cannot further increase production. It takes about 3 months for Zunyi Titanium to start the full-process device for equipment maintenance. In addition, because of its internal adjustment stage, Yunnan Xinli has no plan to resume production in the short term. Therefore, before the supply of titanium tetrachloride is solved, only Zunyi Titanium can increase its output after 3 months, which means that in the near future, domestic sponge titanium production will still be limited due to tight supply of raw materials. Price is a positive factor.

This year's titanium white market "Golden September and Silver 10" is not as good as the past

With the end of the summer, the domestic market is about to usher in the traditional peak season of “Golden September and Silver 10”. In the process of communication with domestic titanium dioxide enterprises, the author found that some companies believe that the degree of market boost is not clear, and they are holding a wait-and-see attitude towards the upcoming peak season. About 60% of the industry believes that due to the closure of some downstream enterprises, and some regions will usher in a new round of environmental supervision in September, the market demand in September and October this year may not be as obvious as in previous years. Affected by this, this year's "Golden September and Silver 10" may have a weaker effect on the market price of titanium dioxide. Nearly half of the companies believe that the price of titanium dioxide in September and October may not be substantially boosted; another 30% of titanium dioxide enterprises believe that the price of titanium dioxide in the future will not rise as much as in previous years, and may rise slightly. However, some companies indicated that the current sales situation has improved, and the demand of downstream customers has begun to recover. In the fourth quarter, downstream demand may accelerate to recover, and finally the demand for the whole year will continue to grow.

The author believes that the peak season in September and October just happened to encounter a new round of environmental supervision, and its impact on the market still needs to be observed. It is not yet known how the international trade war situation develops. These uncertain factors may have unpredictable effects on the future market. On the whole, the development of the Chinese market is obviously better than the international market, and the competitiveness of Chinese companies is also increasing. In the case of continuous improvement of product quality, domestic enterprises can still control costs and maintain price advantage. Some enterprises can already transfer sales pressure in the domestic market by increasing international market share. In the future peak season, the price of titanium dioxide may be slightly boosted, but due to the macro situation, the price increase in previous years will be difficult to reproduce.