Titanium Dioxide Semi-Annual Report 2019! The market is volatile and profits are tightening, and the future may continue to decline!

Summary: In the first half of 2019, the overall domestic titanium* industry was in a turbulent pattern, with prices rising and falling, market supply and demand remained relatively stable, and overall demand declined slightly.
The supply side may face pressure in the second half of the year.
Figure 1 The daily average price trend of rutile titanium* in East ChinaFrom Figure 1 above, the titanium* market from January to June 2019 experienced a first rise and then a fall: the price fluctuated and consolidated in January, and February 12 after the Spring Festival Lomon Baililian took the lead in raising prices by 500 yuan/ton, and then China Nuclear Titanium Dioxide, Jinpu Titanium Industry and other factories successively increased the ex-factory prices by 500 yuan/ton, and the market transaction price moved up; on March 7, Lomon Baililian Continue to increase the ex-factory price of 500 yuan/ton, and then China Nuclear Titanium Dioxide, Pangang Vanadium Titanium, Jinpu Titanium and other manufacturers have successively increased the ex-factory prices, and the market transactions are chasing high and cautiously.
With no significant changes in the supply and demand side of titanium* in the first half of the year, the downturn in downstream demand caused two price increases to overdraft the market in the first half of the year, and market confidence was insufficient.
Subsequently, titanium* entered a process of volatility and decline.
Figure 2 The production ratio of domestic titanium* enterprises.
Domestic production statistics.
Domestic production statistics.
In2018, China's total titanium* production capacity was 3.
4 million tons (see Figure 2 above for the production capacity), with a total output of 2.
9538 million tons, the output of the top five manufacturers The total is about 1.
4037 million tons, accounting for 47.
52% of the total output.
Among them, the annual output of Lomon Bailey exceeds 600,000 tons, which is the only domestic enterprise that ranks among the world's top 5 manufacturers.
According to statistics, in 2018, there were only 11 domestic titanium* manufacturers with a production of more than 100,000 tons.
Among the 39 full-process large-scale titanium* enterprises that can maintain normal production in the country, 17 of them have low output.
At 30,000 tons, the industry concentration needs to be further improved.
Figure 3 Titanium* production statistics for January-June   2019 As of January-May 2019, the national titanium* output was 1.
2111 million tons, and the output reached 278,900 tons in April.
With the price drop, the output will decline in May.
It is expected The output continued to decline in June.
According to the estimated average operating rate of 80% in June, the estimated volume in June is about 260,000 tons (refer to Figure 3 above).
As of June 2019, the average operating rate was 71%, a decrease of 8% from the first half of 2018.
  According to incomplete statistics, Table 1 below shows the estimated output and market share of several domestic titanium* manufacturers as of the end of June 2019.
Table 1 Production capacity statistics of domestic titanium* manufacturers in the first half of 2019.
Domestic production capacity optimization.
Domestic production capacity optimization.
In   2018, the total output of 39 full-process large-scale titanium* enterprises that can maintain normal production across the country is 2,953,800 tons, and the output of rutile titanium* is 229.
2 10,000 tons, accounting for 77.
61%; anatase titanium* output 507,600 tons, accounting for 17.
18%; non-pigment grade and other titanium* products output 154,000 tons, accounting for 5.
21%.
After years of development, the structure of my country's titanium* products has been continuously optimized, and the output of rutile titanium* products has occupied a leading position in the industry.
  With the continuous increase in environmental protection and the continuous updating of production capacity upgrades, the new capacity of the sulfuric acid process is more stringent.
It is difficult to pass the approval without supporting environmental protection equipment and capacity requirements.
The sulfuric acid process manufacturers are facing increasingly strict environmental protection supervision and waste secondary resources.
With external pressures such as globalization, low or zero emissions, and environmental protection, production costs have further increased, and the rate of phase-out of production capacity below 30,000 tons will be further accelerated with the centralized release of chlorination production capacity.
Compared with the sulfuric acid method, titanium chloride* has the advantages of short process flow, high degree of automation, less environmental pollution, and good product quality.
In 2018, the production capacity of the chlorination method will be 200,000 tons.
The production capacity of the chlorination method will continue to increase in 2019.
Mangbaililian has released 200,000 tons of chlorination capacity per year.
Yibin Tianyuan already has 50,000 tons of chlorination capacity, and will continue to add 50,000 tons of chlorination capacity, plus Jinzhou Titanium Industry’s With a production capacity of 60,000 tons, the production capacity of the chlorination process has doubled in 2019.
  With the further improvement of the market acceptance of chloride-process titanium*, the future chloride-process production capacity will further squeeze sulfuric acid-process titanium*, accelerating the elimination of outdated production capacity.
From the perspective of global production capacity, 60% of the production capacity is produced by the chlorination process.
There is still a lot of room for the development of the domestic chlorination process.
The future production is mainly based on the chlorination process.
Industry profit analysis Industry profit analysis   analyzes the financial statements of 5 listed companies that are mainly engaged in titanium*.
In 2018, the gross profit rate of the 5 companies was 43.
64% of Lomon Baililian and 30.
27% of China Nuclear Titanium Dioxide.
Panzhihua Iron and Steel Vanadium Titanium 25.
3%, Jinpu Titanium Industry 17.
7%, Anada 15.
29%, see Table 2 below for details.
Table 2 Statistical table of financial data for the increase in titanium* in 2018.
  Except that the gross profit margin of Panzhihua Iron and Steel Vanadium and Ferro-Vanadium increased by 5.
4% year-on-year in 2017, the other four companies all declined year-on-year, mainly due to the year-on-year increase in operating costs: including raw material prices The increase in labor costs, the increase in labor costs, the investment in high-tech research, and the investment in environmental protection.
Statistics of the profit in the first quarter of 2019 found that Anada's profit in the first quarter decreased by 72.
92% compared with the same period in 2018, China Nuclear Titanium Dioxide increased by 42.
87% year-on-year, Jinpu Titanium Industry decreased by 25.
97% year-on-year, and Lomon Bailey increased by 1.
6% year-on-year.
The reason for the decrease in profit during the same period was due to a year-on-year decrease in the price of titanium** and an increase in environmental operating costs.
The substantial increase in net profit of China Nuclear Titanium Dioxide was mainly due to the increase in production, and the increase in * volume led to an increase in gross profit margin.
  It can be seen from the profit changes of several listed companies that the average profit of the titanium* industry can reach more than 20%, and the profit rate of some leading companies can even reach more than 30%.
However, in recent years, the overall profit rate of the titanium* industry has declined.
As operating costs increase in the later period, profits may be further compressed.
In addition, for 41 domestic titanium* companies, due to the uneven distribution of industry profits, in the process of homogeneous competition, large companies may further squeeze the market, leading to further reduction in profits, accelerating the reshuffle of the titanium* industry and eliminating small companies.
Figure 4 Titanium* import and export volume statistics chart Import and export analysis Import and export analysis   According to statistics released by the General Administration of Customs, the total imported titanium* totaled 59,400 tons from January to May 2019, a year-on-year decrease of 28.
56%; January to May 2019 Cumulative exports of titanium* were 398,000 tons, a year-on-year decrease of 2.
85% (refer to Figure 4).
The main exporting countries are India, South Korea, Brazil, etc.
It can be seen from the import and export volume that international demand has also declined, and domestic demand has also been sluggish.
The overall titanium* price in the first half of the year was in a volatile and weak pattern.
The average price of imported titanium* in my country is US$3,000/ton, and the unit price of export is US$2,540/ton.
The data shows that the quality of titanium* exported by my country is low, and domestic high-end titanium* needs to be supplemented by imports.
Upstream analysis Upstream analysis   In the first half of 2019, the domestic sulphuric acid market was basically stable, and the price remained volatile in the first quarter.
After mid-March, due to the overall weakness of the chemical market, the downstream was light, and the price was slightly lowered by 40-60 yuan/ton, and the price remained basically volatile in the second quarter.
, The price of 98% sulfuric acid in East China is maintained at 300-350 yuan/ton.
  my country's titanium ore reserves are about 220 million tons, accounting for 26.
4% of the world's total reserves, ranking first in the world.
Titanium concentrates in titanium ore are mainly distributed in Wuding County, Yunnan, Panzhihua, Sichuan, and Hainan.
The reserves of titanium concentrate resources in Panzhihua-Xichang, Sichuan account for about 90% of the country's total reserves.
In 2018, my country's titanium concentrate production capacity was about 3.
8 million In 2018, the apparent demand for titanium concentrate reached 6.
8 million tons, of which about 3 million tons were dependent on imports, accounting for 44%, which was 2 percentage points lower than the 46% in 2017.
In 2018, my country's total production capacity of titanium slag was 470,000 tons.
As of June 2019, the consumption of titanium concentrate was 3.
4 million tons, which was basically the same as in 2018.
In the first half of 2019, the price of titanium concentrate basically remained in the range of 1150-1300 yuan/ton, but due to the sharp increase in iron ore prices in 2019 The rise will provide certain support to the price of titanium concentrate, and there is corresponding support on the cost side of titanium*.
Downstream application field analysis: Downstream application field analysis:   Titanium* is used in coatings, plastics, papermaking, printing inks, chemical fiber, rubber, cosmetics, ceramics, enamel, electronics, food and medicine industries.
Paint coating   titanium * first major user, accounting for 60% of the amount of coating.
In particular, rutile titanium* is mostly consumed by the coating industry.
Architectural coatings account for 40% of coating usage in coating products that consume the most titanium*.
Secondly, it is used in the automotive industry.
The automotive industry paints account for 20% of the paint usage.
With the development of China's automobile industry and construction industry, the coating industry not only needs more titanium* in quantity, but also has higher requirements for variety and quality.
The paint made of titanium* has bright colors, high hiding power, strong tinting power, low dosage, and many varieties.
It can protect the physical stability of the medium, and can enhance the mechanical strength and adhesion of the paint film to prevent cracks.
, Prevent the penetration of ultraviolet rays and moisture, and extend the life of the paint film.
In the first quarter of 2019, the paint* volume was 3.
911 million tons, a cumulative decrease of 0.
6% year-on-year, and the paint production and sales rate reached 102%.
Real estate industry statistics   The consumption of architectural coatings directly affects the demand for titanium*, and the consumption of architectural coatings is very closely related to the real estate industry.
According to relevant statistics, the impact of the real estate industry on the architectural coatings market lags for about one year, and the development of the real estate industry can be used as a leading indicator of titanium* demand.
Figure 5 2018-2019 real estate data   referring to Figure 5, we can see that in the second half of 2018, the area of ​​real estate completed fell by 7.
8%, and there was a certain lag from completion to renovation, which was reflected in the demand for titanium* in the first half of this year.
Demand is sluggish.
As of May 2019, the completed real estate area has dropped by 12.
4%, indicating that the demand for titanium* in the architectural coatings industry will further shrink from the second half of 2019 to 2020.
Automobile industry statistics Automobile industry statisticsFigure 6 The cumulative value of automobile production in 2018-2019 (10,000 units)   Figure 6 shows that automobile production in May 2019 fell by 21.
5% year-on-year.
As of May 2019, automobile production has fallen by 14.
1%, and monthly automobile production has been declining.
It can be seen in 7 that there is still room for further decline in subsequent automobile production.
The domestic automobile market demand will further decline, and the demand for automotive industrial paint will also decrease, which will also have a certain impact on the demand for titanium*.
Figure 7: Automobile production trend graph Plastic plastic   is the second largest user of titanium*.
Among the more than 500 titanium* grades in the world, more than 50 grades are exclusively used for plastics.
The application of titanium* in plastic products, in addition to its high hiding power, high color reducing power and other pigment properties, it can also improve the heat resistance, light resistance, and weather resistance of plastic products, and protect plastic products from UV light.
Invasion, improve the mechanical and electrical properties of plastic products.
Since the coating film of plastic products is much thicker than that of paints and inks, it does not require too high pigment volume concentration.
In addition, it has high hiding power and strong coloring power.
The general dosage is only 3% to 5%.
It is used in almost all thermosetting and thermoplastic plastics, such as polyolefins (mainly low-density polyethylene), polystyrene, ABS, polyvinyl chloride, etc.
It can be mixed with dry resin powder or mixed with The liquid phase of the plasticizer is mixed, and some of the titanium* is processed into masterbatch before use.
  From January to December 2018, my country's cumulative output of plastic products was 60.
421 million tons, an increase of 1.
1% year-on-year.
The cumulative output of plastic products from January to May 2019 was 28.
865 million tons, a cumulative year-on-year decrease of 1.
2%.
Plastic products exported 5.
49 million tons from January to May in 2019, an increase of 11.
6% year-on-year.
The overall export performance this year is good, but the output growth rate has declined slightly, indicating that the current demand is generally normal, but domestic demand has declined.
In the second half of the year, due to autumn inspections in the third quarter and the month-on-month shrinking of imports, inventory pressure is not large.
With the launch of new production capacity in the fourth quarter, inventory pressure may become prominent again.
As the newly started construction area of ​​the real estate industry began to decline in May, it is expected that the demand for PVC will decline further in the later period.
Paper industry paper industry   paper industry is the third largest user of titanium *.
Titanium* is used as a paper filler, mainly used in high-grade paper and thin paper.
Adding titanium* to the paper can make the paper have better whiteness, good gloss, high strength, thin and smooth, no penetration during printing, and light weight.
Titanium* for papermaking generally uses anatase titanium* that has not been surface-treated, which can act as a fluorescent whitening agent and increase the whiteness of paper.
However, laminated paper requires the use of surface-treated rutile titanium* to meet the requirements of light resistance and heat resistance.
  In 2018, there were 6,704 paper-making companies and 1,045 loss-making companies, an increase of 23.
5% year-on-year, with a loss of 15.
6%, which was an increase from 2017.
At the same time, the scale of paper-making enterprises' losses has also expanded.
In 2018, paper-making enterprises lost 8 billion yuan, a year-on-year increase of 58.
3%.
In 2018, the main business revenue of Chinese paper companies was relatively objective.
The main business revenue was 137.
279 billion yuan, an increase of 8.
3% over 2017.
Although many paper companies went bankrupt due to environmental protection, the concentration of Chinese paper companies has increased, and the main business revenue of large paper companies has increased, which has driven the entire industry's main business revenue to rise.
  As of May 2019, the output of machine-made paper and paperboard (except for outsourced base paper processing) had accumulated 48.
65 million tons, a cumulative increase of 0.
3%; the cumulative output of newsprint was 498,000 tons, a cumulative decrease of 23.
5%.
In the first half of 2019, the paper industry's output declined, inventories were low, and downstream demand was generally weak.
With the continuous improvement of environmental protection requirements in 2019, measures such as environmental protection inspections and pollution discharge permit systems have shown the industry development trend of stricter environmental protection, and the industry's environmental protection costs have increased significantly.
The pressure on the cost side has forced some small and medium-sized enterprises to withdraw from the market and further improve Industry concentration.
Textile and chemical fiber textile and chemical fiber   textile and chemical fiber industry is another important application field of titanium*.
Titanium* for chemical fiber is mainly used as a matting agent.
Since the anatase type is softer than the rutile type, the anatase type is generally used.
Titanium* for chemical fiber generally does not require surface treatment, but in order to reduce the photochemical effect of titanium dioxide and prevent the fiber from degrading under the action of titanium dioxide photocatalysis, surface treatment is required for some special varieties.
  In 2018, the production of chemical fiber was 50.
111 million tons, an increase of 9.
1% year-on-year.
As of May 2019, the output of chemical fiber was 22.
443 million tons, an increase of 10.
1% year-on-year.
In the first half of the year, the overall polyester load was around 88.
3%, a significant drop from the 91% higher level in the same period in 2018.
However, the production base has increased significantly compared with the same period last year, making the comprehensive polyester production still relatively high, reaching about 24.
13 million tons.
An increase of 1.
96 million tons, a growth rate of close to 8.
8%.
In 2019, especially in the second half of the year, the production capacity of the polyester industry and the polyester raw material industry is still concentrated, but the overall demand has not changed significantly.
It is still necessary to continue to pay attention to the progress of Sino-US trade and exchange rate trends.
The large external uncertainties have not yet been eliminated.
, There is still a risk of decline in demand; the polyester and even chemical fiber industries will face more severe tests in the future.
Forecast for the second half of the year.
Forecast for the second half of the year.
  At present, China is already the world's largest producer and consumer of titanium*.
However, there are still more small and medium-sized enterprises in China's titanium* production enterprises.
The industrial concentration is not high enough, and the pressure on safety and environmental protection is relatively high.
Problems such as low French output limit the further development and growth of China's titanium* industry.
Under national regulation and the operation of market mechanisms, it is expected that industry mergers and reorganizations will be further accelerated, and the number of production companies will be reduced step by step.
Eventually, several influential titanium* manufacturing companies will participate in international market competition, enabling my country to produce from titanium*.
, A major consumer country has transformed into a powerful country in the manufacture and consumption of titanium*.
  For titanium* companies, the future will still rely on technological innovation and management innovation to improve product quality.
Based on energy saving, emission reduction, safety and environmental protection management and control, we will strengthen research on new products, actively explore foreign markets, and continuously optimize customer structure.
  Judging from the market performance of Titanium* in the first half of the year, the price remained stable, with an average operating rate of 71%.
Short-term supply and demand remained basically balanced.
The contradiction between the industry chain and the industry is not large.
However, with the overall downturn in downstream demand, inventory may continue to increase in the later period.
, Titanium* prices may continue to fall.