Although some titanium dioxide varieties have fallen below the cost line, the global giant titanium dioxide has decided to raise prices. This also caused the stock price of titanium-related listed companies in A shares to continue to rise recently.
According to information from the Business Club, global titanium dioxide giants Huntsman and Tronox announced on December 22 that they will increase the price of titanium dioxide. From January 1, 2016, the price of titanium dioxide will increase by 150 US dollars per ton. US$160 range. On December 17, not long ago, another giant titanium dioxide company (former DuPont) had previously announced that the price of titanium dioxide was increased by US$150/ton, which was about 5% of the current price.
Zhuo Ying, an analyst at Zhuo Chuang, told reporters that for the titanium dioxide industry, the giant's price increase is undoubtedly a long-awaited benefit. Domestic titanium dioxide is expected to bottom out in the end of the first quarter of 2016. However, some analysts believe that in the fourth quarter of 2015, the profitability of titanium dioxide will continue to deteriorate, the loss situation will continue, and the reshuffle of the industry will be unstoppable.
Titanium Dioxide trap global loss model
In 2015, due to the global economic downturn, titanium dioxide has entered a global loss model. The reporter noticed that as early as September, Huntsman had issued an early warning in the announcement: the price of titanium dioxide fell, especially in North America, resulting in a decline in company performance in the third quarter. Since then, Kemu company said that in the third quarter, titanium technology division sales of 616 million US dollars, compared with the same period last year decreased by 18%.
In Guo Ying’s opinion, the specific costs may vary among enterprises, but the contradiction between supply and demand is constantly depressing prices. This has caused domestic and foreign companies to continue to touch the cost line, and the real profitability is worrying. Data from the Steel House shows that, as for mainstream companies, as of November, the loss of titanium dioxide was approximately RMB 1,000/ton. In the fourth quarter of 2015, the profit of titanium dioxide will continue to deteriorate, and the loss situation will continue.
Since 2011, the domestic price of titanium dioxide has been affected by the expansion of production capacity and the overall trend has been downward. The statistics of the business community's large list show that the overall average price of titanium dioxide declined last week (December 14 to December 18), down from 0.1915 yuan/ton at the beginning of the week to 10,900 yuan/ton at the weekend, a decrease of 0.14%. Zhuo Chuang information data shows that on the morning of December 23, the mainstream manufacturer of rutile titanium dioxide in Shandong was quoted at 9300-10,000 yuan/ton.
The sluggish market made titanium dioxide companies start to cut prices and promotions, which also affected their performance. Taking China Nuclear Titanium Dioxide as an example, the company's operating income in the third quarter of 2015 was 312 million yuan, a year-on-year decrease of 21.60% and a net loss of 34.299 million yuan, a decrease of 236.22% compared with the same period last year.
According to the Minsheng Securities Research Report, the effective capacity utilization rate of domestic titanium dioxide in 2014 was 79%, and the utilization rate of the industry leader Lililian in the first half of 2014 and 2015 was almost 100%.
Industry consolidation is unstoppable
The analysis of the industry website Steel House believes that “in the fourth quarter of 2015, the profit of titanium dioxide will continue to deteriorate, and the loss situation will continue.†Ping An Securities research report shows that the global titanium dioxide production capacity is about 6.5 million tons, including The five companies, Huntsman, Teno, Cristal, and Kronos, accounted for 58% of global production capacity, with a high degree of industry concentration.
It is not easy for foreign companies with high concentration of production capacity to be difficult, and it is even more difficult for the domestic titanium dioxide industry to appear “small, scattered, and chaoticâ€. Statistics show that there are about 100 titanium dioxide production plants in the world, of which nearly 70 are in China. Although the number of Chinese enterprises accounts for about 70% of the world, the output only accounts for about 30% of the world's total. According to the Ping An Securities Research Report, as of the end of 2014, there are still a considerable number of enterprises in the country whose production scale is still under 30,000 tons, and the only ones with production capacity exceeding 100,000 tons are Longyi, Wulilian, CNI Titanium Dioxide and Dongjia. Several.
The analysis of China's titanium dioxide network believes that the homogeneity of low-end products is very serious and has become a major obstacle to the sustainable development of the industry. Structural adjustment will be the focus of titanium dioxide industry work in the coming period of time. Guo Ying said that under the demonstration effect of international giants raising prices, titanium dioxide industry regulations and industrial pollution prevention and control technology policies will be introduced within the year, and the industry will accelerate integration. The profitability of titanium dioxide is expected to continue to improve.
Titanium dioxide, a chemical product with excess capacity, is currently accelerating its integration. In June of this year, Lili Lien plans to spend RMB 9 billion to acquire Sichuan Long Yao, the industry leader, and kick off the industry consolidation. GF Securities said: In the past year, the domestic titanium dioxide industry's acquisitions and mergers and acquisitions began to increase, international mergers and acquisitions increased, domestic mergers and acquisitions also intensified. With the advancement of merger and integration, the concentration of titanium dioxide industry will be improved, which will play a role in pushing the industry out of the bottom.
In the A-share market, the titanium dioxide concept stocks include Fluoride, China Nuclear Titanium Dioxide, and Annada.
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