Titanium dioxide "de-capacity" has become an inevitable trend

Titanium dioxide "de-capacity" becomes an inevitable trend

In 2015, the global titanium dioxide market has weak overall market demand and overcapacity. Even foreign companies with scale and technological advantages have been in trouble for the past few years. As a global leader, Chemours continues to decline in profitability and has declined in 2015. Breakeven point, while Tronox and Kronos are in serious losses and Tronox has been losing money for three consecutive years.

In the face of this phenomenon, many major international manufacturers have made some measures to deal with it. For example, Huntsman shut down the 100,000 tons of sulfuric acid titanium dioxide plant in France; Teno shut down the titanium dioxide factory in Hamilton, USA. A production line and a production line of the Australian pigment factory have reduced its titanium dioxide production line by 15%. According to statistics, since 2015, the foreign titanium dioxide giant has closed down 320,000 tons.

China's titanium dioxide industry implements supply-side reform

According to the "2017-2022 China Titanium Industry Development Prospects and Investment Strategy Planning Report" data, China's titanium dioxide industry has achieved rapid development during the "Twelfth Five-Year Plan" period. China has become a global producer and consumer of titanium dioxide, especially In the past ten years, the process and technology based on the sulfuric acid method have been improved day by day. The single-line production capacity has been greatly improved, and the production capacity has increased rapidly. The compound growth rate has reached 15% in the past 8 years. In 2015, China's titanium dioxide production capacity was 3.524 million tons, the output was 2.323 million tons, and the apparent consumption was 1.989 million tons.

However, due to the disorderly investment leading to low-end overcapacity, China's titanium dioxide industry is very competitive, the profit level is declining, and because China mainly uses sulfuric acid method, the relative pollution is relatively large. In this context, China's Ministry of Environmental Protection accelerates titanium dioxide. In the prevention and control of industrial pollutants, nearly 400,000 tons of the existing production capacity has been shut down or closed in 2016, mainly concentrated in the fifth echelon small enterprises with a capacity of less than 30,000 tons, plus the newly put into production capacity, as of 2016 China's titanium dioxide production capacity totaled 3.59 million tons, and the growth control is better.

The “13th Five-Year Plan” of titanium dioxide proposes to further promote the supply-side structural reform of the titanium dioxide industry. In the future, the titanium dioxide industry should implement “three to one and one subsidy” to reduce capacity, de-stock, de-leverage and reduce costs. Shorten the board, dispose of “zombie companies” and promote the elimination of excess capacity. In addition, according to the forecast of the “13th Five-Year” development plan of China's coatings industry, coating production will maintain a growth rate of 7% in the next five years, and the growth rate of titanium dioxide production in the next five years is estimated to be around 4%-5%. According to this estimate, the output of titanium dioxide in 2020 is about 300-3.3 million tons, and the current capacity of 3.59 million tons basically meets the requirements.

Titanium dioxide production is still at a new high under the “de-capacity” policy

According to the statistics of the Titanium Dioxide Industry Association, the capacity of China's titanium dioxide in 2016 was 3.591 million tons, and the statistics in 2014 were 925,000 tons. The proposed capacity was 12.3 million tons. In fact, some of the capacity under construction has been suspended during 2015; It was 2.957 million tons, an increase of 11.8% compared with 232.3 tons in 2015, a record high.

Industry analysis In the context of “de-capacity”, the main reason for the increase in national titanium dioxide production is that after the international titanium dioxide giant stripped and integrated its titanium dioxide business, the export volume of titanium dioxide rose to 720,500 tons (in 2015). 539,300 tons), and prices continued to soar in 2016, and the demand from the downstream market led to the continued expansion of upstream production.

After the market price increase in 2016, the titanium dioxide market will enter a reasonable price range, and the supply-side reform in 2017 will remain the key. In the long run, benefiting from supply-side reforms and environmental protection thresholds, the future growth rate of titanium dioxide capacity will be only about 3%, and the downstream demand growth rate will be about 6%. The supply and demand pattern of titanium dioxide industry will continue to improve, and the price of titanium dioxide is expected to continue to rise.