Titanium Dioxide: Rocketing Prices Haved Peak in 2016

By Zhao Zhen

Increased output & prices

After a historic low in 2015, titanium dioxide prices rose steadily in 2016. See Figure 1 for details. By the end of December 2016 the high-end market price of rutile titanium dioxide had already increased to RMB15 500-16 000/t, 50% higher than the price at the beginning of the year.
Despite rising raw material costs, 2016’s drastic hike of titanium dioxide prices enabled a return to profitability. The net profit of Henan Billions Chemicals Co., Ltd. in the first three quarters of 2016 was RMB120 million, an increase of 104% over the same period of the previous year. Anhui Annada Titanium Industry Co., Ltd. turned from huge losses to profitability, with net profit in the first three quarters of RMB19 million, an increase of 130.5%.
The sector’s overall operating rate gradually recovered from less than 50% at the beginning of the year to around 70%. Output increased notably, amounting to about 2.40 million tons during January-November 2016, an increase of 21.4% YoY.
There were still over 50 titanium dioxide producers in China in 2016, with combined capacity of 3.825 million t/a. Only 100 kt/a of capacity was added, developed by Pansteel Titanium Industry Co., Ltd., but some enterprises now plan expansion, stimulated by the price rising throughout 2016. New capacity of 490 kt/a is expected to be added by the end of 2019. See Tables 1 and 2 for details.

1/3 of output is exported

The export of titanium dioxide grew explosively in 2016, reaching 595.2 kt during January-October, a drastic increase of 34.34% YoY. The monthly export volume has exceeded 60 kt for five consecutive months from May to September. Monthly output was around 200 kt. One third of all output was exported. Inventories were sold easily, as export became the most powerful backing of a bull market for titanium dioxide in China.
Export prices were below US$1 500/t in the first half of 2016, but they exceeded US$1 700/t in the third quarter, still much lower than domestic prices.

Prospects for 2017

The rising trend seems unlikely to continue through 2017. Prices will gradually return to normal and stabilize within a rational range.
Domestic titanium dioxide capacity will increase a bit in 2017. Demand growth is likely to slow down pretty much. The export trend has already weakened. The homogeneity of titanium dioxide output in China is becoming more and more serious.                 

Table 1   Titanium dioxide capacity in China, 2016

Region    Producer    Capacity (kt/a)
Shandong    Shandong Doguide Group Co., Ltd.    160
    BlueStar Jinan Yuxing Chemical Co., Ltd.    100
    Shandong Dawn Group Co., Ltd.    100
    Shandong Lubei Jinhai Titanium Resources Technology Co., Ltd.    100
Southwest China    Sichuan Lomon Titanium Industry Co., Ltd.    350
    Pansteel Titanium Industry Co., Ltd.    140
    Panzhihua Dongfang Titanium Industry Co., Ltd.    120
    Xichang Ruikang Titanium Industry Co., Ltd.    60
    Panzhihua Xinzhong Titanium Technology Co., Ltd.    30
    Panzhihua Tianlun Chemical Co., Ltd.    40
    Panzhihua Dingxing Titanium Industry Co., Ltd.    30
    Panzhihua Taihai Technology Co., Ltd.    80
    Panzhihua Haifengxin Chemical Co., Ltd.    60
    Meishan Jiacheng Titanium Industry Co., Ltd.    10
    Chongqing Xinhua Chemical Co., Ltd.    30
    Panzhihua Chengtian Titanium Industry Co., Ltd.    20
    Panzhihua Taidu Chemical Co., Ltd.    30
    Panzhihua Dahutong Titanium Industry Co., Ltd.    60
    Yunnan Dahutong Titanium Industry Co., Ltd.    60
    Yunnan Zechang Titanium Industry Co., Ltd.    50
    Yunnan Fuming Longteng Titanium Industry Co., Ltd.    30
    Yunnan Metallurgical Xinli Titanium Industry Co., Ltd.    60
    Pansteel Titanium Industry Co., Ltd.    100
South China    Guangdong Yunfu Huiyun Titanium Industry Corporation Limited    55
    Guangxi Jinlong Titanium Industry Co., Ltd.    100
    BlueStar Guangxi New Chemical Materials Co., Ltd.    85
    Guangxi Jinmao Titanium Co., Ltd.    100
    Guangxi Detian Chemical Cycle Co., Ltd.    20
    Guangxi Cangwu Shunfeng Titanium Industry Co., Ltd.    20
    CNMC (Guangxi) Pgma Co., Ltd.    25
East China    Jinpu Titanium Nanjing Titanium Dioxide Chemical Co., Ltd.    100
    Jinpu Titanium Xuzhou Titanium Dioxide Chemical Co., Ltd.    80
    Jiangsu Taibai Group Co., Ltd.    70
    China Nuclear Wuxi Haopu Titanium Industry Co., Ltd.    100
    China Nuclear Maanshan Jinxing Titanium Dioxide Group Co., Ltd.    100
    Ningbo Xinfu Titanium Dioxide Co., Ltd.    120
    Shanghai Pengbo Titanium Dioxide Co., Ltd.    50
    Suzhou Hongfeng Titanium Co., Ltd.    40
Central China    Jiangxi Crystal Titanium Industry Co., Ltd.    50
    Wuhan Fangyuan Titanium Industry Co., Ltd.    60
    Hubei Xintianlong Titanium Industry Co., Ltd.    30
    Hunan Hengyang Tianyou Titanium Dioxide Co., Ltd.    30
    Hunan Chuangda Yutu Chemical Co., Ltd.    20
    Anhui Annada Titanium Industry Co., Ltd.    100
    Precheza Titanium Dioxide Technology Anhui Co., Ltd.     20
    Henan Luohe Xingmao Titanium Industry Co., Ltd.    60
    Henan Billions Chemicals Co., Ltd.    320
Northeast China    Jinzhou Titanium Industry Co., Ltd.    60
Northwest China    China Nuclear Titanium Industry Co., Ltd.    80
North China    Langfang Pairs Horses Chemical Co., Ltd.    30
    Hebei Huerxin New Materials Corporation Limited    50
    Langfang Lanke Chemical Co., Ltd.    30
Total        3 825


Table 2  Planned titanium dioxide capacity in China

Company    New capacity
(kt/a)    Process    Location    Planned time for starting production
Guangdong Yunfu Huiyun Titanium Industry Corporation Limited    15    Sulfuric acid process, anatase    Yunfu, Guangdong    2019
China Nuclear Maanshan Jinxing Titanium Dioxide Group Co., Ltd.    100    Sulfuric acid process, post treatment    Maanshan, Anhui    2017
China Nuclear Titanium Industry Co., Ltd.    100    Sulfuric acid process    Baiyin, Gansu    2018
Pansteel Titanium Industry Co., Ltd.    15    Chlorination process    Panzhihua, Sichuan    2019
Yunnan Metallurgical Xinli Titanium Industry Co., Ltd.    160    Chlorination process    Lianyungang, Jiangsu    2019
Shandong Lubei Jinhai Titanium Resources Technology Co., Ltd.    100    Chlorination process    Wudi, Shandong    2019
Total    490