Titanium dioxide rose channel officially opened

Titanium dioxide rose channel officially opened. We on July 7 this year, suggesting that titanium dioxide into the third quarter is expected to return to the rising channel, the main logic is the titanium dioxide industry supply and demand tight throughout the year, the seasonal factors and inventory factors will affect the ups and downs, and off-season foreign titanium White powder prices further prices out of space. Recently, the dragon python Bai Li as the representative of a number of titanium dioxide manufacturers raised the price of 500 yuan / ton, indicating that the rise of titanium dioxide channel officially opened, confirms our early judgment. In the current node, the industry supply and demand pattern has been in a tight state, we believe that titanium dioxide market has been officially launched: (1) tight supply and demand throughout the year: titanium dioxide industry in 2017 domestic demand growth of 6%, net exports increased by 7%, and industry (2) from the current point of view, the dealer inventory after the second quarter decline in product prices and digestion, three, Quarterly demand season, as well as environmental protection to boost the price of raw materials titanium concentrate, rising power superimposed. (3) the long term, sulfuric acid method by the new environmental restrictions, chlorination method has yet to be further technological breakthroughs, expansion of the right to speak in the hands of the dragon python Bai Li, supply and demand structure of the continuous improvement and leading the trend of concentration.

Supply side: long-term capacity growth continues to low, short-term environmental protection serious supply. (1) in the long term, capacity growth continued to low, the industry operating rate will remain 75% level. Mainly due to the titanium dioxide industry has experienced four years of the bottom of the industry, some small production companies to achieve rapid start more difficult, since 2014, the industry operating rate has been maintained at 75% from top to bottom. At the same time, due to the existence of industry access standards and environmental trends become more normal, the future new capacity is mainly concentrated in the chlorination method, and only four domestic manufacturers with chlorination production capacity. According to the latest capacity planning, the next few years new capacity is limited. (2) in the short term, a serious compression of environmental supply, resulting in accelerated arrival of titanium dioxide market. China’s 2017 titanium dioxide production capacity of 3.57 million tons, of which 835,000 tons in Sichuan, Shandong 600,000 tons, accounting for 24%, respectively, 19%. Most of our titanium dioxide is sulfuric acid method, the pollution is relatively serious, environmental protection trend, the supply probability will be affected. With the fourth batch of environmental protection inspection team stationed in Shandong and Sichuan provinces, the two provinces most enterprises operating rate of 50%, the majority of small production can be started at zero. Short-term supply of large contraction is expected to accelerate the price of titanium dioxide up.

Demand side: exports to the bright and clear, domestic demand is expected to be poor repair. (1) export to the bright and clear. Overseas demand to pick up, demand for titanium dioxide to the good, while domestic export prices have a competitive advantage, driven by China’s titanium dioxide exports continue to improve. From January to July, net exports grew by 10.4% year-on-year, especially since June, with net exports increasing by 28.9% and 17.5% respectively in June-July. (2) domestic demand is expected to remain stable. At the beginning of the year, the market for titanium dioxide domestic demand is generally more pessimistic. But in the shed reform monetization resettlement, three or four line residents down payment ratio is low, three or four lines of urban monetary orientation and other factors driven, so that China’s three or four line real estate market is currently maintained a high degree of prosperity, – August commercial housing sales area increased by 12.7%. In the three four-tier cities to inventory the overall tone of the premise is not changed, the stack of housing prices due to financing to speed up sales back to the money, even if the second half of the growth rate has come down, but we expect the annual sales of commercial housing to maintain rapid growth. Real estate sales data better performance led to the rapid growth of paint production. According to the National Bureau of Statistics data, from January to June 2017, the cumulative output of enterprises above designated size of the enterprise was 9,641,000 t, an increase of 10.5% over the same period of last year, thus boosting the demand for titanium dioxide.