Demand for Domestic Titanium Dioxide

The industry leader Sichuan Longyi titanium industry once again cut the price of titanium dioxide, the industry believes that this move will lead to a new wave of industry price turmoil.

Industry leaders take the lead in lowering prices According to statistics, since January this year, domestic rutile titanium dioxide prices have dropped from RMB 16,800/ton to RMB 15,900/ton, a drop of 5.37%. At this time last year, the price of titanium dioxide was at a high of nearly 20,000 yuan/ton. In one year, the price of titanium dioxide dropped by 19.25%.

Business News said that in late April of this year, Long Yao titanium dioxide price reduction, the price from 17500 yuan / ton to 17,000 yuan / ton, the actual transaction price from 15,000 yuan / ton to 14500 yuan / ton . It is understood that Longyan Titanium's production in 2012 reached 180,000 tons, ranking first in the industry for two consecutive years. It is one of the major standards for price reference by various manufacturers in the domestic market.

Business Society Titanium Dioxide analyst Yang Xun told the Securities Times reporter that at present, many titanium dioxide manufacturers have high inventory and become the direct cause of product price cuts, but the most fundamental reason is weak demand.

According to Yang Xun, nearly 60% of the domestic titanium dioxide products are used in the paint market. Due to the country's continuous regulation of the real estate market, the paint market has also been affected, becoming the main reason for the low demand for titanium dioxide, and the weak economic recovery pattern is not Can give strong support to the demand side. Yang Xun expects that if the Long Yao titanium industry led the industry to continue to wind down prices, there will be more and more small and medium-sized manufacturers stop production or even withdraw from the industry.

In the interview with the Securities Times reporter, Zhang Xiaowen, Sales Manager of Longyi Titanium repeatedly emphasized that the company's downward adjustment of titanium dioxide price is based on the company's production, inventory, customer structure and other aspects of the comprehensive decision-making, price fluctuations is the company's market strain, the company No intention to affect the overall market price.

Zhang Yuwen explained that since the use of titanium dioxide with different indexes varies, and the manufacturing processes and customer structures among different manufacturers are all different, the price reduction of Long Hao will not have a major impact on the industry.

The overcapacity competition exacerbated the competition and said that before 2010, titanium dioxide was still an unattractive industry. However, in October 2010, the export volume of titanium dioxide exceeded the import volume for the first time, and this market began to flood into large numbers of participants.

Zhang Yuwen also admits that there is indeed a problem of excess capacity in the entire industry: “The domestic demand for titanium dioxide last year was about 1.8 million tons, while the production capacity was nearly 4 million tons, which means that half of the production capacity is idle.”

Affected by the declining macroeconomic growth and intensified competition in the industry, a number of titanium dioxide listed companies experienced significant declines in their performance last year. According to the disclosed annual report, Yuli Lian (002601)'s net profit fell by 48.68% year-on-year, and Annada (002136)'s net profit fell by 61.31% year-on-year.

In an interview with a Securities Times reporter, Fu Yijiang, editor-in-chief of China Titanium Dioxide Network, said that the domestic titanium dioxide market is in a chaotic situation, with low barriers to entry and overcapacity. However, Fu Yijiang believes that China's titanium dioxide "overcapacity" is actually a "excess" of low-end products, especially small-scale production of low-end products to occupy the market, it is expected that the current titanium dioxide production enterprises will in the next one to two years Shut down 20%. With the country's rectification of the industry and policy control and the natural elimination of the market economy, the actual production of titanium dioxide in the future is expected to adjust to a reasonable level.