Who Moved My Cheese "tells a simple fable story in which four little guys search for cheese in a maze. Their gains and losses, sensitivity and dullness, optimism and depression, search and confusion are all filled with profound truths about change in life. Actually, it doesn't matter who moved the cheese, what matters is how to make it after losing it?

Since 2018, the price of sponge titanium has been steadily rising from a slow and steady pace to a rapid increase in the past two months, as if searching for "cheese". Sponge titanium enterprises "sing up and listen, sing stable and conservative, and sing down and be hated", this is the expression behind the price. Self media with a sense of existence is also constantly plagiarizing viewpoints! The original taste of 'cheese' has changed. Whose cheese did the price increase of sponge titanium pry?

Over the past decade, the continuous decline in sponge titanium prices has been mainly caused by severe overcapacity and the impact of the 2008 global financial crisis, but it has not hindered the rapid development of China's titanium industry. Over the past decade, on the one hand, the production of sponge titanium has been steadily increasing, and the development of the titanium industry is promising. On the one hand, the price of sponge titanium continued to decline due to overcapacity, and it was not until 2018 that it continued to rise.

In the past year, the main reasons that have supported the rise in sponge titanium prices are: the rise in prices of raw materials such as titanium tetrachloride; Downstream demand growth is rigid, such as the growth of demand for "three aviation" (aerospace, aviation, and navigation), the growth of demand for titanium civilian living products, and the growth of titanium for military industry.

The rapid improvement of China's manufacturing industry supports the growth of titanium demand (behind the growth of titanium consumption in the United States, Japan, and Russia, which used to be stronger than China's manufacturing industry, is the technological content. Now, the significant increase in China's manufacturing industry supports the rigid demand for titanium).

The increase in raw material prices has driven up the price of sponge titanium, which is unprofitable for sponge titanium enterprises. The profits from the price increase have been taken away by titanium tetrachloride enterprises. Sponge titanium enterprises can only profit from the price increase stimulated by downstream rigid demand. For more than 10 years, sponge titanium enterprises have been struggling with the downward trend in prices, controlling costs by squeezing and squeezing, and cost-effectiveness has become prominent. In 2019, sponge titanium enterprises achieved good results, and the amount of profits earned was related to enterprise management.

Since 2018, the rigid demand for titanium has increased in the "three aviation", civil, military, and manufacturing industries, but the annual demand will not increase significantly. In the next few years, the demand for titanium will show a steady increase year by year, which is the key to supporting the stable price of sponge titanium at over 75000 yuan/ton. Whether the price of sponge titanium will remain stable at 80000 yuan/ton, or increase by 85000 yuan/ton or even offer a tentative quotation of 90000 yuan/ton (with predictions of 100000 yuan/ton) from 2020 onwards depends on whether the following aspects are "coordinated"——

Will titanium tetrachloride continue to rise in price? Can the total amount of sponge titanium quickly exceed 90000 tons or even 100000 tons? The trend of titanium processing enterprises importing foreign sponge titanium? Is the national reserve of sponge titanium stabilizing the market? Does the downstream continue to accept high priced titanium materials? Regardless of the reason, there is still an excess production capacity of sponge titanium in China. Anyone who is in production, waiting to be produced, or newly built has an "abacus" to leverage cheese!

Whose cheese did the price increase of sponge titanium pry?

Firstly, it leverages the cheese between sponge titanium enterprises, secretly competing with each other to expand production, and everyone wants to make a profit in this round of market. More than 10 years ago, the price of sponge titanium plummeted from around 250000 yuan to 100000 yuan in the "shrine". Sponge titanium enterprises gathered in Zunyi to hold a "Zunyi Conference" to unify prices, resulting in a "major crisis looming and each one flying". Nowadays, sponge titanium companies seem to have a hard time agreeing on their quotations, and their execution prices are lower than their quotations. Everyone wants to impress others with their cheese. Only by using someone else's cheese can one become stronger. The market is like a battlefield, and who doesn't want to seize the market share of their competitors? Who doesn't want to make more profit in this round of market to prevent potential risks?

Secondly, it leverages the cheese of downstream enterprises. The rise in sponge titanium prices has squeezed the cheese of titanium processing enterprises, narrowing their profit margins. Faced with the rising price of sponge titanium, downstream support will ultimately choose to adjust prices or wait and see, which will inevitably affect downstream and downstream cheese. When the prices of titanium materials such as titanium plates and tubes continue to rise significantly, titanium once "replaced" other materials will gradually be "replaced" by other materials. Once this process recedes, it is another reshuffle for sponge titanium enterprises. Because there are only a large number of sponge titanium enterprises in China, but so far no one has an annual output exceeding 20000 tons, let alone 30000 tons.

Look at the essence through phenomena. Whose cheese did the price increase of sponge titanium pry? Leveraging its own cheese, leveraging the entire titanium industry chain and cross-border cooperation cheese, stimulating the "gold rush" atmosphere of expansion, resumption, and new construction, and opening up a new "battlefield" for the new round of survival of the fittest.

The market is like a battlefield, and after every charge, it clears the battlefield. In the future, even if the rigid demand for sponge titanium production exceeds 80000 tons, 90000 tons, or 100000 tons, do not be grateful that the era of making money for titanium has arrived. And it should be remembered that the production capacity of sponge titanium is far more than 100000 tons, which is the development trend that sponge titanium enterprises will inevitably face integration within three to five years.

Whose Cheese Has Sponge Titanium Been Prized by the Price Increase! The strong are always strong. The ones that pry are all competitors' cheese.