Recently, domestic titanium dioxide companies have launched the third wave of "price increases" in 2024. First, the leading company Billion Group announced a domestic price increase of 500 yuan/ton and an overseas price increase of US$100/ton. Hengtong Titanium Industry, Hunan Yutu Titanium Industry, Haifengxin Chemical Industry, Xilong Chemical Industry and other companies followed closely behind. Industry insiders said that although the seemingly sudden price increase notice may appear to be a temporary decision, in fact it is often a collective behavior after negotiation between enterprises. This move undoubtedly caused a new round of impact on the market.
In just three months, prices have risen three times in a row. The price of titanium dioxide in the domestic market has increased by up to 1,900 yuan/ton, while the international market price has also increased by $300/ton. Against the background of weak demand in various domestic industries, the titanium dioxide industry’s three consecutive rises are particularly eye-catching.
Upstream price increases, titanium dioxide companies take the opportunity to raise price
Regarding the current price increase in the titanium dioxide industry, some titanium dioxide manufacturers said that it was mainly due to the increase in raw material costs that titanium dioxide companies were "forced" to increase prices. The main raw material of titanium dioxide is titanium concentrate. Sichuan, the main domestic titanium concentrate production area, has been affected by environmental inspections, and its output has dropped significantly. In late February, the average price of titanium concentrate hit a high in nearly 22 months. Currently, some titanium concentrates Concentrate inventories are average, actual orders are negotiated one by one, and sulfur manufacturers' inventories are mostly maintained at medium to low levels. The rapid rise in energy prices, soaring logistics costs, and increases in comprehensive labor and miscellaneous expenses have also led to a significant increase in the production cost of titanium dioxide, which in turn has driven up its selling price.
China's titanium dioxide production capacity accounts for more than 50% of global production capacity, and it is the world's largest producer of titanium dioxide. Exports basically account for about 1/3 of production. Under the pressure of anti-dumping, some leading companies moved their products to Europe and the United States early to avoid risks and maximize profits, causing domestic supply to decline or even exceed demand in the short term.
In addition, from the end of last year to the first quarter of this year, more than a dozen titanium dioxide companies carried out maintenance, resulting in tight product inventories and pushing up prices. In addition, international manufacturers Tronox, Chemours, and Venator announced that they would raise the sales price of titanium dioxide, which also boosted confidence in the strong price of titanium dioxide in the external market, boosting the market price of this chemical industry segment to incredible heights. situation.
Suspected of monopoly, contracts voided, titanium dioxide companies aggressively increase prices
The price of titanium dioxide continues to rise, and downstream companies are in trouble. Some paint companies have reported that a leading titanium dioxide company has received orders worth hundreds of thousands, and naturally they do not want to lower prices immediately. As early as the end of last year, they had already communicated with their major terminal customers about large purchase orders and revealed their price increase arrangements for this year. If there is no increase, they may not be able to fulfill the "promise" they originally made when they persuaded customers to stock up.
In the rounds of price increases, many coating companies have successively reduced their inventories. Facing urgent purchasing choices, titanium dioxide factories have experienced supply shortages. Currently, titanium dioxide factories are fully booked with orders in March, and some are overflowing into April. Hunan Chuangda Yutu Chemical does not offer quotations for the time being, Jinpu Titanium Industry factory links have tight spot stocks, Guizhou Shengweifuquan Chemicals has tight spots, Pinggui Feidie, Ningbo Xinfu, Titanium Sea Technology negotiate on a per-order basis, Jinan Yuxing, Fumin Longteng, Anhui AnNada negotiated one by one, and agents and dealers were also lining up with the manufacturer, anxiously waiting for the supply of goods.
Titanium dioxide companies have taken advantage of the concentration of production capacity to form an industry monopoly and have very strong market pricing power. For example, when the price increases, if the order before the price increase has not been paid, it will be executed at the new price; or as of the price increase, the unpaid balance of the cooperation order will be invalid, and the agreement will be re-signed and the latest quotation will be executed.
Some paint companies also stated that if they do not agree to the subsequent "supplementary agreement", they will directly stop supplying products. This is undoubtedly a "overlord clause" and poses a great threat to the survival of downstream companies such as paint. If you don't compromise, you will face the difficulty of having no goods available, and it will be more difficult to seize orders from end customers; if you compromise, it will make it difficult to implement the already difficult cost reduction plan, worsen the crisis of the capital chain, and encounter shackles on survival and development. In the end, you still dare to be angry. Dare not speak.
Many coating and chemical companies bluntly stated that the price of titanium dioxide has exceeded the relationship between supply and demand in recent years, and they do not seem to care whether downstream can accept it or whether they are willing to pay. This is due to the special nature of the industry and the high market share of leading companies. characteristics, firmly grasping the initiative. As the second quarter is about to start, whether titanium dioxide factories will combine market characteristics and launch new tricks may become the ultimate nightmare for coating companies to reduce costs and purchase.