Since the beginning of this year, the titanium dioxide plate has continued to rise sharply, becoming a shining star in A shares. At the same time, the titanium dioxide production capacity has expanded dramatically and China has become the world’s largest producer of titanium dioxide. UV Line Laser Marking Machine, ultraviolet Line Laser Marking Machine, production line uv laser marker Feiquan Laser Technology Wuxi Co., Ltd. , https://www.fq-lasers.com
Although the performance of the titanium dioxide plate is still strong, the signs of the recent decline in the titanium dioxide market have been worrying. The unavoidable cruel reality is that 60% of the titanium ore used in China's titanium dioxide industry needs to be imported, and the capacity will continue to expand in the future. It will become the global center for the production of titanium dioxide, and the characteristics of both raw materials and markets will become more apparent. . High-end products rely on imports, and there is a surplus of low-end products. The competition for homogeneity is severe. The chronic illness that has plagued the industry for many years has not yet been eliminated.
In the future expansion of production capacity, the more advanced chlorination process has not become the first choice for domestic titanium dioxide companies. According to industry analysis, if the technology is not upgraded, the product quality will not improve. In the future market competition, it will not only fail to share the high-end market, but also may encounter a more severe situation, namely, it will become the second steel industry. The data shows that compared with the price in early October 2010, the current titanium mine has increased nearly 1.5 times, while the increase in titanium dioxide is less than 10%.
The decline in prosperity
Since September, the domestic titanium dioxide market has shown signs of loosening and the market conditions are very sluggish. Most manufacturers are considering continuing to cut prices and competing for goods. According to Baichuan information, the price of rutile titanium dioxide of Sichuan Longhao brand name R-996 was RMB 22,000/ton on September 7. It was suddenly dropped to RMB 19,800/ton on September 8, and fell further on September 22. 18500 yuan / ton.
According to industry analysis, rutile titanium dioxide has generally fallen below 20,000 yuan/ton, of which the price of Sichuan Longjing is the most obvious. Under the stimulation of price cuts, nearly 30 domestic manufacturers have also cut prices. At present, the terminal's demand is sluggish, and the difficulty in releasing the transaction is the biggest problem encountered by the market. In the short term, the domestic market has entered a period of weak consolidation, and it is expected that the domestic market will not have much improvement by the end of this year.
It is understood that the high price of titanium dioxide directly inhibited the downstream demand, manufacturers and traders in the price increase when the reluctant psychology at this time has changed, and the downstream manufacturers do not buy buy up, which further exacerbated the decline in product prices .
According to Lin Guixian, a researcher from Western America, when the domestic titanium dioxide market was in the off-season in July and August, the price was even higher than that of imported products. Downstream demand was severely curtailed, and manufacturers’ inventory was increasing. It was estimated that it exceeded the normal level of 2 months. In the current macro-environment of tight funding, there will inevitably be companies and traders unable to hold on and take the lead in cutting prices, triggering a chain reaction.
Some people in the industry are concerned that the rising cycle of the titanium dioxide industry is generally 2-3 years. The industry climate has started to increase since 2010. It is very likely that the high point of prosperity has already passed and entered a downturn cycle. If this kind of judgment is established, the profitability of related companies will further deteriorate. According to the current price level, the production enterprises basically have no profit and many have stopped production.
In 2010, the sales of titanium dioxide continued to heat up, and prices continued to increase. Especially in the fourth quarter, the performance was very clear. The level of profitability of enterprises increased at different levels. In 2011, the price of titanium dioxide continued to rise rapidly and was once the most interesting product in the global chemical market. According to estimates by China Titanium Dioxide Network, the overseas price of titanium dioxide from January to May rose by over 30%. The price of domestic rutile titanium dioxide rose by nearly 8,000 yuan per ton within half a year, an increase of 48%.
When the market was in the doldrums, the titanium dioxide industry had a hard time. Deng Jie, President of China Titanium White Network, stated that in 2008, the global financial crisis was caused by the financial crisis. With the sharp decline in global demand, a large amount of titanium dioxide production capacity was spent and was permanently shut down. In the past three years alone, the West had 4 Titanium dioxide factory was permanently shut down.
Changes in the performance of related listed companies can also be seen in the dramatic fluctuations in the titanium dioxide industry. Taking Annada as an example, the company’s 2010 earnings per share was 0.34 yuan. In the first half of 2011, it exceeded the level of last year and reached 0.36 yuan, but in 2008 it was only -0.665 yuan.
Overcapacity
The industry's economic climate fluctuates so quickly. Where exactly is the problem? Analysts believe that downstream demand is not as optimistic as previously expected, while titanium dioxide production capacity is rapidly expanding.
Titanium Dioxide is the most outstanding white pigment in the world. It is widely used in coatings, plastics, papermaking, printing inks, chemical fiber, rubber, ceramics, cosmetics, food, medicine and other industries. About 60% of its demand comes from coatings. Closely related to the real estate industry.
The GF Securities Research Report has optimistically stated that “the growth rate of titanium dioxide used in the three major areas of coatings, plastics and specialty papers will reach 20%, 10% and 15%, respectively, in 2011. Our country has started to become an important supplier of titanium dioxide in the world. The growth rate of exports will reach 50% in 2011. According to this, we expect that domestic titanium dioxide production in 2011 will reach 1.74 million tons, an increase of 18% over the same period last year.â€
However, the “Twelfth Five-Year†development plan for the Chinese paint industry predicts that the paint industry will maintain an annual growth rate of 10% during the “12th Five-Year Plan†period. Guo Xinrong, secretary-general of the Titanium Dioxide Industry Branch of the China National Coatings Industry Association, said that due to the uncertainty of overseas economic trends, exports have not been as strong.
The situation of the real estate industry is not so optimistic, and the progress of affordable housing that has been highly hoped for by the market does not seem to be smooth. Monita research shows that the total number of affordable housing starts this year may even exceed the target of 10 million sets, but the clear goal is behind the vague progress. The newly started affordable housing project cannot be effectively transferred to investment and construction, and the security housing is currently in the stage of “quick start-up and limited investmentâ€. At the same time, behind the protection of high housing starts, there is a risk of slowdown in the start-up of commercial housing.
According to the analysis, due to factors such as financing channels, financing costs, and real estate control, the willingness of developers to participate in the construction of affordable housing may decline, and the enthusiasm for land purchases will be significantly reduced, and the growth rate of land transfer payments will be at a relatively low level. This has affected the overall financing scale of social security housing, and has affected the progress of the construction of social security housing. In addition, the rapid growth of affordable housing actually obscured the decline in the growth rate of commercial housing. If we remove the year and the start of the year, the cumulative year-on-year growth of new housing starts has begun to decline rapidly in the first half of the year, and the growth rate of new housing starts in July has slipped to -9%.
While the demand growth was lower than expected, the production capacity was rapidly expanding under the stimulation of rapid product price increases. The data shows that the annual production capacity of the titanium dioxide industry increased from 1.5 million tons in 2009 to 2.25 million tons in 2010, and the output increased from 1.04 million tons in 2009 to 1.47 million tons in 2010.
Sun Peng, general manager of Shandong Dongjia Group, said that China has surpassed the United States to become the world’s largest producer of titanium dioxide, but it is not yet a strong producer of titanium dioxide. High-end products mainly rely on imports, and there is a serious competition for low-end products and homogeneity. This is the dysentery that has troubled the development of the titanium dioxide industry for many years.
Difficulties with technology upgrades
The pressure of structural adjustment is huge, and technical upgrading is imminent. However, the mainstream practice of titanium dioxide enterprises is to remain at the low end, and the capacity expansion is still increasing.
At present, although domestic titanium dioxide companies are worrying about falling prices, multinational companies are planning to continue to increase prices. Kronos was the first international producer to announce an increase in sales prices in the Asia-Pacific region, and its product price has increased by US$500/ton since September 1. Afterwards, DuPont, Tronox, ISK, and Cristal-Global also announced that they would increase their product prices by US$500/ton from October 1. Huntsman has also joined this price increase.
Industry insiders explained that although titanium dioxide is also produced in the same way, the quality of the product varies greatly, and the range of application is different, and the price is not at the same level.
DuPont company sources said that with the development of the global economy, the demand for titanium dioxide will grow steadily, among which the fastest growth in Asia, China accounts for about 45% of the global growth, the future of high-quality titanium dioxide market space is very broad, for example, in the cool In the roof coating, titanium dioxide can effectively reflect the mid-infrared part of the solar spectrum, reducing the cooling energy consumption; the use of high-quality titanium dioxide can give the coating a brighter color, a higher gloss, and reduce the lighting energy consumption of basement, underground garage; It can also be used on photovoltaic backplanes to increase solar energy utilization efficiency. However, the products of China Titanium Dioxide Enterprise cannot be applied to these fields.
A key factor in determining product quality is the production process. China Titanium Dioxide Network research shows that in the two production processes of the chlorination process and the sulfuric acid process, 63.2% of the world's production capacity is the former, but Chinese companies mainly use the latter. In contrast, the former is more advanced and environmentally friendly.
The new edition of the “Guidance Catalogue for Industrial Structure Adjustment†clearly states that the new sulfuric acid method production line is not allowed. The original sulfuric acid method production line can only expand production capacity through technological transformation; the chlorination process titanium dioxide will continue to be encouraged, and the development of a single-line production capacity of 30,000 tons will be encouraged. More than two years, and titanium dioxide content of not less than 90% of titanium-rich material as the raw material of titanium dioxide chloride project.
This rule restricts the entry of outsiders, but it does not limit the expansion of production capacity of existing sulfuric acid production lines. Liu Changhe, senior advisor of CITIC Jinzhou Metal Co., Ltd., said that this policy has boosted the accelerated expansion of sulfuric acid production capacity. Inadequate regulation has made it more difficult to follow-up industrial restructuring.
Of course, switching production processes is not easy. In addition to the technical threshold, the mainstream of the existing production capacity is the sulfuric acid method. If it is overturned, it will undoubtedly cause a severe reshuffle for the industry. The vested interests are not willing to make changes.
It can be expected that as long as the tone of the industrial policy remains unchanged, the sulfuric acid production capacity will continue to maintain its mainstream status. At the same time, due to the long-term bullish price of titanium ore, and the manufacturer has no ability to pass on costs, it can only endure the loss of profit from titanium ore. result.