The development and competition of titanium dioxide in China tend to be "white hot"

Since the end of the 1990s, China's titanium dioxide has entered a period of rapid development. The output of titanium dioxide has increased at an average rate of 20% every year. By 2011, China's total capacity of titanium dioxide (including those under construction) had reached 2.5 million t/a, and the actual annual output was 1.755 million t, of which rutile products accounted for 67.0%, exports 398000 t, and imports 229000 t. In 2011, China became a net exporter of titanium dioxide for the first time.

These ten years have also been the fastest period of development in China's reform and opening up. In the past 10 years, China has joined the WTO and China's urbanization has entered a period of rapid development. These macro factors strongly support the rapid development of titanium dioxide in China.

However, since the second half of last year, the price of titanium dioxide in China has been going down all the way. Now many enterprises are operating at a loss, but if they do not produce, they may be eliminated by the market. The market pressure is very great. Moreover, the environmental pressure faced by China's titanium dioxide industry is also increasing.

The commercial production of titanium dioxide in China almost all uses sulfuric acid process. The sulfuric acid production process has a long route, produces a lot of by-products and waste, and causes significant environmental pollution. Today, the domestic ecological environment has reached the point where it has to be treated, and the environmental laws and regulations have also been tightened. The domestic titanium dioxide enterprises are now facing the dual pressure of market and environment, and their survival is extremely difficult.

The titanium dioxide industry in China is different from other industries. Due to similarities in production processes, there is no significant difference in product quality, and price has become a competitive advantage in the market. Whoever has an advantage in price can win in the market. In the case of weak downstream demand, the price of titanium dioxide is determined by the cost price. In other words, whoever has low cost will win the market.

As early as June 14, Li Jianfeng, Chairman and General Manager of CNNC Titanium Dioxide (8.08, -0.01, -0.12%), pointed out that due to the overall downturn of the macroeconomic situation, the sales price of titanium dioxide continued to decline and has bottomed out. As of the press date, the domestic price of titanium dioxide remained at the low level in June. The "white heat" competition that has lasted for over a month has also caused some manufacturers to complain repeatedly. In early July, some titanium dioxide manufacturers announced price increases, which were even ignored by the market.