1、 Price trend
| Gamma-PGA (gamma polyglutamic acid) |
The year 2023 has come to a successful end. Looking at the development of the titanium dioxide market this year, according to commodity data monitoring, the overall price of titanium dioxide in 2023 has increased. At the beginning of the year, the average price of domestic titanium dioxide was 15933.33 yuan/ton, and at the end of the year, the average price was 16483.33 yuan/ton. The price increased within the year, with a magnitude of 3.45%.
2、 Market analysis
Product Market
Looking at the market development in 2023, the titanium dioxide market shows an M-shaped trend. In the first quarter, titanium dioxide companies had good market confidence and prices increased. In the second quarter, cost support weakened, demand was average, and prices were lowered. In the third quarter, Longqi issued a letter announcing a rise, indicating a positive market and active investment sentiment, resulting in an increase in prices. In the fourth quarter, the domestic terminal market remained sluggish, with market prices falling.
The first quarter is recovering in January. Cost support was good in February, downstream demand improved, and prices rose. In March, on-site inventory was low, while exports were good, and prices continued to rise. The cumulative increase from January to March was 7.43%. As of the end of March, domestic quotations for rutile type titanium dioxide are mostly between 16500 and 18500 yuan/ton; The quotation for rutile titanium dioxide is around 14500-15000 yuan/ton.
In the second quarter, cost support weakened from April to May, demand was average, and prices were lowered. In June, there was a stalemate between upstream and downstream markets, and the market was cautious in trading. Prices remained stable for the time being. The cumulative decline from April to June was 5.74%. As of the end of June, domestic prices for rutile type titanium dioxide are mostly between 15500 and 17200 yuan/ton; The quotation for rutile titanium dioxide is around 13500-14000 yuan/ton.
In the third quarter, manufacturers had more orders on hand, and on-site supply was slightly tight. In August, Longqi issued a letter announcing an increase, and the focus of new transaction prices shifted upwards. The cumulative increase from 7 to 9 is 7.23%. As of the end of September, domestic prices for rutile type titanium dioxide are mostly between 16700 and 18600 yuan/ton; The quotation for rutile titanium dioxide is around 15500 yuan/ton; The quotation for chlorinated titanium dioxide is 19600 yuan/ton.
In the fourth quarter, the domestic terminal market was sluggish, with poor performance in new orders in October. The titanium dioxide market is about to enter the off-season, and traders are more flexible in their transactions, resulting in an increase in low-priced supply in the market. At the end of November, Longbai Group’s new order price was reduced by 1000 yuan/ton. Prices continue to decline. The cumulative decline from 10 to 12 is 4.72%. As of the end of December, domestic quotations for rutile type titanium dioxide are mostly between 16000-17600 yuan/ton; The quotation for rutile titanium dioxide is around 14500-15000 yuan/ton.
Import and export data
According to customs data, from January to November 2023, China imported approximately 73300 tons of titanium dioxide, a year-on-year decrease of 40.46%, and the import volume decreased by 49800 tons. The decrease in the import volume of titanium dioxide is mainly due to the weak domestic market, limited demand for titanium dioxide, and high cost pressure on enterprises.
According to customs data, the cumulative export of titanium dioxide from China from January to November 2023 was about 1.4983 million tons, a year-on-year increase of 17.14%, and the export volume increased by about 219200 tons. The steady increase in export share is beneficial for the new production capacity of titanium dioxide. In addition, the withdrawal of titanium dioxide production capacity from the international market is more favorable for domestic titanium dioxide exports. In the future, titanium dioxide exports will continue to steadily increase.
Production capacity and output
According to publicly available data, the cumulative production of titanium dioxide in China from January to November 2023 was 3.821 million tons, an increase of 7.16% year-on-year, with an increase of approximately 255200 tons in production. It is expected that the annual production of titanium dioxide will be over 4.2 million tons in 2023.
Downstream terminal
From January to November, the national real estate development investment was 10404.5 billion yuan, a year-on-year decrease of 9.4%, of which residential investment was 7885.2 billion yuan, a decrease of 9.0%.
From January to November, the construction area of housing by real estate development enterprises was 8313.45 million square meters, a year-on-year decrease of 7.2%. Among them, the residential construction area was 58.5309 million square meters, a decrease of 7.6%. The newly constructed area of housing is 87.456 million square meters, a decrease of 21.2%. Among them, the newly constructed residential area was 63.737 million square meters, a decrease of 21.5%. The completed area of houses is 652.37 million square meters, an increase of 17.9%. Among them, the completed residential area was 47.581 million square meters, an increase of 18.5%.
From January to November, the sales area of commercial housing was 1005.09 million square meters, a year-on-year decrease of 8.0%, with residential sales area decreasing by 7.3%. The sales revenue of commercial housing reached 10531.8 billion yuan, a decrease of 5.2%, including a 4.3% decrease in residential sales.
At the end of November, the unsold area of commercial housing was 653.85 million square meters, a year-on-year increase of 18.0%. Among them, the unsold residential area increased by 20.4%.
From January to November, real estate development enterprises received 11704.4 billion yuan in funds, a year-on-year decrease of 13.4%. Among them, domestic loans amounted to 1422.7 billion yuan, a decrease of 9.8%; Utilizing foreign investment of 4.2 billion yuan, a decrease of 35.1%; Self raised funds of 3850.5 billion yuan, a decrease of 20.3%; Deposit and advance payment of 3958.3 billion yuan, a decrease of 10.9%; Personal mortgage loans amounted to 1998.2 billion yuan, a decrease of 8.1%.
In November, the Real Estate Development Prosperity Index (referred to as the “National Housing Prosperity Index”) was 93.42.
Overall, the investment confidence of real estate companies is still weak this year, and the industry’s available funds have not improved. As the central bank frequently voiced support for the reasonable financing needs of real estate enterprises at the end of November. In late December, Beijing and Shanghai will respectively reduce the down payment ratio for home purchases and adjust the standard for ordinary housing. The future market expectation may improve, and the cash flow of real estate companies will improve, providing room for easing the industry’s financial pressure. The growth rate of development investment will reverse and expand the decline.
3、 Future Market Forecast
1. The new housing sales market will still face significant pressure in 2024. If the expectations of the real estate market improve in the future, the cash flow of real estate companies will improve. Coupled with favorable factors such as the renovation of old residential areas and the renovation of urban villages, it will bring certain benefits to the titanium dioxide market, and the sales scale may achieve a slight growth.
2. The Chinese titanium dioxide market has seen an increase in new production capacity. Public data shows that the domestic titanium dioxide production capacity is expected to reach 6 million tons in 2024, with monthly production exceeding 500000 tons. The international market share is steadily increasing, with an expected export volume of 1.63 million tons of titanium dioxide in 2023 and 1.8 million tons in 2024. The steady increase in export share in the future is beneficial for the new production capacity of titanium dioxide. In addition, the withdrawal of titanium dioxide production capacity from the international market is more favorable for domestic titanium dioxide exports. In the future, titanium dioxide exports will continue to steadily increase.
3. The domestic supply of raw material titanium concentrate is still in a tight situation, and the price continues to operate at a high level, providing strong support for titanium dioxide powder in terms of cost.
In summary, titanium dioxide enterprises will still face significant pressure in 2024, as the rate of capacity increase may exceed demand.
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