After the second quarter, exports fell significantly
my country is a big exporter of titanium dioxide. The annual export volume of titanium dioxide is nearly 900,000 tons. The export dependence is relatively high, accounting for more than 30%.
Recently, the customs announced the import and export data of titanium dioxide in April, and the export decreased by 43.93% month-on-month. Among them, the biggest changes were India and Brazil, and the number of exports to the two countries decreased significantly. The number of India and Brazil accounted for 4.74% and 4.44% respectively, while for the whole of 2019, this proportion was 12.65% and 7.24%.
Titanium dioxide supply and demand are weak, prices are lower
Since March 2020, foreign epidemics have exploded rapidly, and many national regions have begun to limit production and stop production, and the demand for titanium dioxide foreign trade has continued to weaken; while the domestic market demand is not as expected, domestic titanium dioxide enterprises have high inventory, and market competition pressures have increased. The price reduction and promotion fought a price war, so that the market price of titanium dioxide has dropped significantly.
Supply: Domestic titanium dioxide companies have continued to reduce production and stop production since the Spring Festival. In the second quarter, more than 20 titanium dioxide companies have reduced production. As of now, 12 companies are still in the process of reduction. The current industry operating rate is 70.07%.
Demand: In the middle and late May, domestic demand has been relatively stable recently. According to some major domestic manufacturers, orders in May decreased by about 30% compared with last year. The outbreaks in some foreign countries have been controlled, and export orders have increased accordingly. However, the main export target countries, India and Brazil, have not achieved satisfactory levels of outbreak control. The orders have decreased significantly and there is no sign of improvement in a short time.
Price: Since April, manufacturers have actively allowed profits to be sold. The price of titanium dioxide fluctuated frequently, starting with Southwest and Central China, and then nationwide. Up to now, the domestic mainstream price of rutile titanium dioxide is about 12500-13000 yuan/ton, which is about 16% lower than the same period last year.
Prices may still fall
Under the current supply and demand pattern, there have been rumors in the market that several domestic enterprises with larger production capacity will have "big moves" in June, and there are also rumors that a major manufacturer will cut prices by 1,000 yuan/ton. Leading company Dragon Python Billion said that the price will be stabilized before the price decision meeting in June. According to the 996 price in the market, there are already large discounts for direct supply customers with large quantities. Other second-tier and third-tier manufacturers also have certain preferential policies recently. Most manufacturers report that the current sales price is approaching or even lower than the cost price, but they can only hold on due to pressure from all sides.
The Longbai price decision meeting is expected to take place around June 10th. According to Longbai, the company currently has more than 70,000 tons of inventory. Exports in May also decreased slightly compared with April, and the purchase volume of large domestic customers is relatively stable. According to the price trend of the off-peak seasons in previous years and the special situation of this year, Longbai is expected to reduce prices next month, but the range will not be too large. Some manufacturers with small production capacity in southwest and southern China may be forced to stop production due to cost pressures.
Source: Mobei Public Account
