Review of the Titanium Market in June

In June, the domestic titanium ore market experienced a decline, while the imported titanium ore market performed well. Affected by the weak performance of the downstream titanium dioxide industry, in early June, some miners in Panzhihua were worried that they would enter a downward channel in the future, so they chose to proactively lower prices to obtain orders in advance. In the second half of June, the price of Panzhihua 10 # titanium ore slightly decreased again, with a cumulative decrease of around 30-40 yuan/ton. In addition, large mines in the Panzhihua region still insist on maintaining stable prices, but also feel pressure from downstream customers. In the short term, the price adjustment pressure of several large mines will further increase.

The imported titanium ore market has performed well, with some titanium ore prices increasing by about 50 to 80 yuan/ton. The main reason is that the quantity of imported titanium ore has significantly shrunk and a new supply and demand relationship needs to be established. Due to the unstable trade environment, China's demand for titanium ore has decreased. Due to a significant decrease in the quantity of imported titanium ore, its supply remains tight, thereby maintaining market stability, and some titanium ore still shows a state of oversupply.

In June, the rutile market performed well, and product prices continued to maintain a rapid upward trend. Compared to May, the price of domestic rutile over 90% has increased by over 400 yuan/ton. The main reason for the continuous increase in the price of rutile is the demand growth brought about by new downstream projects, as well as the serious shortage of supply side.

In June, the price of high titanium slag slightly increased by 60 yuan/ton, and some high-quality high titanium slag prices increased slightly. Due to the high cost of imported titanium ore, even though the price of high titanium slag has slightly increased, titanium slag enterprises still believe that their profits are insufficient. Some titanium slag enterprises continue to reduce production and only provide a small amount of products to old customers. Despite significant increases in the prices of rutile and downstream titanium tetrachloride, high titanium slag enterprises remain strongly dissatisfied with the slight increase in their product prices. The acid residue market is affected by the downturn in the downstream titanium dioxide industry, and its price has slightly decreased, with a decrease of around 50 to 100 yuan/ton.

In June, titanium tetrachloride and sponge titanium still maintained a significant upward trend. Among them, the price of titanium tetrachloride has increased by 150 to 500 yuan/ton; The price of sponge titanium has increased by 2000 to 3000 yuan/ton. Among them, in early June, the price of titanium tetrachloride in the southern region increased, with some sponge titanium companies taking the lead in increasing their product prices to offset cost pressures, while others temporarily maintaining prices unchanged. By next month, the prices of titanium tetrachloride in the northern region have also started to rise, and subsequently sponge titanium companies that have not raised prices have also announced price increases, leading to the reunification of domestic sponge titanium prices.

In June, the performance of the titanium dioxide market continued to be weak. Due to sluggish demand, some companies have successively lowered product prices to alleviate sales pressure. Some companies have started to reduce production or stop production for maintenance to overcome the market downturn. In the sales process, titanium dioxide companies generally adopt a single negotiation method, and the guiding role of early quotations is constantly weakened. Some small enterprises are under pressure to gradually lower the price of titanium dioxide to near the cost line. If the sales situation cannot improve, there may be more discontinued enterprises.

The price of rutile continues to rise

Recently, with the shortage of domestic spot inventory and steady growth in downstream industry demand, the price of domestic rutile has continued to rise. At present, the highest price of 95% rutile has climbed from 8000 to 8300 yuan/ton at the beginning of the year to the highest of 9400 yuan/ton; 92% of the price for rutile has risen to 7600 to 8600 yuan/ton; The price of 90% rutile with low impurities has also exceeded 7000 yuan/ton, and the higher quotation has already exceeded 7600 yuan/ton, moving towards the 8000 yuan mark. In the foreseeable future, domestic supply of rutile will remain low, while strong downstream demand will continue. Although it is unclear how many times this is the price increase this year, there is no doubt that the price of rutile will continue to be in an upward trend in the future.

The continuous increase in the price of rutile will also affect other products, such as high titanium slag, titanium tetrachloride, sponge titanium, chlorinated titanium dioxide, reduced titanium, and so on. Among them, titanium tetrachloride, sponge titanium, and chlorinated titanium dioxide belong to downstream products, and rutile is one of the raw materials for their production. As the price of rutile continues to reach new highs, the production costs of these products will also rise accordingly. If downstream enterprises feel that the cost increase is too high, raising the product price will be one of their choices. High titanium slag and reduced titanium are substitutes for rutile, and high titanium slag can be used as another raw material for the chlorination process to replace rutile; Reduced titanium can replace rutile in certain welding material products. As the price of rutile increases, some downstream enterprises may choose to use more high titanium slag or reduced titanium to reduce costs. This will also make it possible for the demand and price of high titanium slag and reduced titanium to increase in the future.

The first 5 months of this year

The import volume of titanium ore has sharply decreased by nearly 30%

According to customs data, in May 2019, China imported approximately 171800 tons of titanium ore, a year-on-year decrease of 38.39% and a month on month increase of 40.73%; From January to May, the cumulative import volume was 959900 tons, a decrease of approximately 360000 tons or 27.54% compared to the same period last year.

Although the demand for domestic titanium ore decreased in the first six months of this year and the quantity of domestic titanium ore increased, the supply of imported titanium ore decreased by 360000 tons, resulting in a general balance between domestic titanium ore supply and demand. Of course, some high-quality titanium ores mainly rely on imports and are relatively scarce. The overall market is still showing a relatively stable situation. If the quantity of imported titanium ore this year remains at the same level as the previous two years, the market pressure will be different, and domestic titanium ore prices will not only adjust slightly.

In the short term, the overall demand for titanium ore in the downstream market will remain relatively low in the future, while domestic titanium ore production will continue to maintain a high level. In the coming months, the quantity of imported titanium ore will continue to be lower than the average of previous years, which will result in a relative balance between supply and demand in China's titanium ore market, which is conducive to maintaining market stability.