Titanium dioxide industry: short-term or narrow price increases, long-term industries will welcome reshuffle

Since the beginning of the year, the titanium dioxide industry has ushered in five rounds of price increases: [Table_Summary] Entering 2021, under the macroeconomic situation of continuous and rapid rise in commodity prices, and under the background of the industry with low inventory of manufacturers, strong rigid demand, and high costs, Titanium dioxide manufacturers frequently send letters to increase prices, and the industry has already carried out the fifth increase in the year.
As of May 28, the domestic market price of rutile titanium dioxide was 20,578 yuan/ton, breaking through the historical high point in the past 10 years.
The increase was 25.
8%.
Under the premise of low inventory and high cost, titanium dioxide will usher in the sixth narrow increase in this year
.


The titanium raw material industry has high concentration, unstable start-up, and slow release of new ore sources: domestic titanium resources are difficult to extract, the grade of titanium ore is low, CR5 on the supply side reaches 75%, and the import dependence of titanium raw materials is around 40%
.
In 2020, the output of H2 overseas giants' titanium raw materials will decline to varying degrees.
The new domestic titanium dioxide production capacity has pushed up the demand, and the price of titanium ore continues to rise; in 2021, the cumulative import of titanium ore from January to April is +37.
5% year-on-year, affected by environmental supervision The unstable operation of domestic manufacturers, foreign dragon enterprises are affected by the new crown epidemic to varying degrees, and there is currently no new domestic ore sources released.
The price of ore has increased by 500 yuan/ton since the beginning of the year, which will provide strong support for the high price of titanium dioxide
.


The demand for titanium dioxide is growing steadily, and the supply side will usher in technological innovation, monopoly of leading enterprises, and accelerated reshuffle under policy tightening: the main downstream application areas of titanium dioxide are coatings and plastics, and demand has a greater correlation with the macro economy, and will continue in the future Steady growth, and the evolution of the industry structure lies in the supply-side transformation: after Tenor’s acquisition of Koster, the CR4 of overseas companies continues to increase, the industry presents a monopolistic situation, and there will be no new capacity release in the future, and the giants fully control the right to speak; According to the standards, the concentration of major domestic titanium dioxide manufacturers needs to be improved urgently.
CR4 is only 45.
8%, and the total production capacity of enterprises with an annual production capacity of less than 100,000 tons accounted for 35.
6%
.
At present, the sulfuric acid process in foreign countries has gradually withdrawn, and the giants are mainly chlorination products.
The process adopts continuous production technology, the three wastes are low and the product purity is high; my country's titanium dioxide technology is mainly sulfuric acid, and sulfuric acid The method can not achieve continuous production, the process is complicated and the environmental protection cost is high.
In 2020, the proportion of chlorination process manufacturers is only 11.
7%.

.
We believe that the chlorination process will gradually become the mainstream process in China’s titanium dioxide industry.
The mid-range chlorination process will gradually replace the market share of some small and medium-sized sulfuric acid titanium dioxide companies.
The high-end chlorination process will be marketed by CITIC Titanium.
, Lomon Baili, Panzhihua Iron and Steel Vanadium Titanium and other leading companies fully monopolize; the recent large-scale deployment of sulfuric acid process with China Nuclear Titanium Dioxide proves that the future sulfuric acid process titanium dioxide will show a strong situation
.


Investment strategy: It is recommended to pay attention to Lomon Bailey, which has an annual production capacity of 1.
05 million tons of titanium dioxide, and China Nuclear Titanium Dioxide, which has an annual production capacity of 330,000 tons
.