Titanium dioxide cycle or continued until 2018

Titanium dioxide is a white pigment with excellent performance. It is widely used in coatings, rubber, plastics, household chemicals and other fields. Its market value is second only to the third largest inorganic chemical products of ammonia and phosphorus chemical industry. The growth rate of titanium dioxide consumption in China obviously exceeds the growth rate of GDP. If we can maintain a high-speed growth trend, it is expected to become the world's largest producer and consumer of titanium dioxide within the next five years.

In the past two years, thanks to the improvement of supply structure in the downstream industries and the release of demand for architectural coatings, titanium dioxide is still in the post-cycle phase of rising demand, and its prices have ended the continuing downturn in previous years. According to this growth trend, the titanium dioxide boom cycle is expected to continue into the second half of next year.

In the past ten years, the processes and technologies based on the sulfuric acid process have been improving day by day, and the single-line production capacity has been greatly increased. As a result, titanium dioxide production capacity has enjoyed rapid growth, and the compound annual growth rate has reached 15% in the past eight years. According to statistics, in 2016, the total production of titanium dioxide in 39 companies was 2,597,212 tons, an increase of 274,199 tons compared to 2015, 23,230,012 tons, an increase of 11.8%, and a record high.

The apparent consumption of titanium dioxide increases at an average annual rate of about 14%. The apparent consumption of titanium dioxide in 2011 was 1.64 million tons. In 2012, due to the decline of titanium concentrate production, the growth rate of titanium dioxide production in China declined slightly. Views of consumption reached 1.8 million tons, an increase of 9.76% over the previous year. In 2014, the apparent domestic consumption of titanium dioxide was 2.1 million tons, an increase of approximately 10% over the same period of last year. In 2015, domestic apparent consumption amounted to 1.89 million tons. In 2016, China imported 196,800 tons of titanium dioxide and the export volume was 717,300 tons. Based on this, the apparent consumption of titanium dioxide in China in 2016 was 2.0197 million tons.

In the short term, the supply of titanium ore in China is relatively tight, and the growth rate of titanium dioxide production will be greatly limited; but in the long term, with the improvement of production technology and the development of energy-saving emission reduction and recycling economy, titanium dioxide will have a relatively broad Market prospects.

It is worth noting that the competition in the titanium dioxide industry has become very fierce, the profitability has declined, and the overcapacity concerns have become prominent. Therefore, in the “Thirteenth Five-Year Plan”, it is proposed that the supply-side structural reform of the titanium dioxide industry will be further promoted. In the future, the titanium dioxide industry should implement “three reductions, one reduction and one subsidy”, capacity reduction, destocking, and deleveraging. Reduce costs, make up short boards, dispose of "zombie enterprises", and promote the elimination of excess production capacity.

Chinese Titanium Dioxide Industry Implements Supply-side Reform

Titanium dioxide prospects can be expected

Titanium Dioxide is a very important raw material in industrial production, widely used in coatings, plastics, paper, printing inks, chemical fiber, rubber, cosmetics, ceramics, enamel, electronics, food and pharmaceutical industries, of which the largest proportion of paint, about 60% . The most consumed titanium dioxide in the paint products is architectural coatings, which accounts for 60% of the paint usage. The lag time for real estate's impact on the paint market is about one year, because the fiery heat of the real estate market in 2016 will make titanium dioxide demand peak in 2017, and may continue into the second half of 2018.

Coating industry As the largest user of titanium dioxide, 60% of the world's titanium dioxide is used in paint production, especially rutile titanium dioxide, and most of them are consumed by the paint industry. Coatings made of titanium dioxide, colorful, high hiding power, strong coloring, dosage, variety, and the stability of the media can play a protective role, and can enhance the mechanical strength and adhesion of the film to prevent cracks, Prevents the penetration of ultraviolet rays and moisture and extends the life of the paint film.

Titanium dioxide is widely used in paints. Titanium dioxide is used in coatings for automobiles, ships, buildings, wood and metal furniture, household appliances, coil coating, toys and daily necessities. Among the paint products, the most consumed titanium dioxide is architectural paint (including traffic sign paint), accounting for approximately 60% of the total titanium dioxide used in paint, followed by industrial coatings for automobiles, ships, railway vehicles, and furniture, accounting for approximately 25%, special coatings account for about 15%.