Titanium dioxide ushered in a new round of price increases

Release date：2021/09/16

Affected by the news of price increases, on September 15, the concept of titanium dioxide rose across the board, and the entire sector soared by 5.68%. Among them, Tianyuan shares, Jinpu Titanium and other companies reported closing daily limit; Longbai Group, Ananda, China Nuclear Titanium and other stocks rose more than 5%.

Since the beginning of this year, the prosperity of the titanium dioxide industry has risen, and the price of titanium dioxide has continued to rise. The performance of related companies in the first half of the year has increased, and the stock prices have also risen correspondingly. The stock prices of many listed companies have doubled during the year.

Tian Xiaoyu, a titanium dioxide industry analyst at Zhuo Chuang Information, told a reporter from the Securities Daily: "September was originally the peak season for titanium dioxide sales. The rise in the price of raw materials such as sulfuric acid also provided support for the price of titanium dioxide, superimposing the impact of tight spot supply from manufacturers. Driven by the leading price increases in the titanium dioxide industry, other manufacturers have also begun to follow suit."

Raw material prices are rising, and spot supplies are tight

Judging from the current price increase letters issued by various companies, the domestic price of this round of titanium dioxide has increased in the range of 700 yuan/ton to 1,000 yuan/ton, and the foreign price increase is in the range of US$100/ton to US$150/ton.

Take China Nuclear Titanium Dioxide as an example. In this round of price increases, its domestic customer sales price will be raised by 1,000 yuan/ton, and its international customer’s export price will be raised by 150 US dollars/ton. Up to now, China Nuclear Titanium Dioxide has raised its product prices seven times during the year, of which the domestic price has increased by 6,500 yuan/ton, and the foreign price has increased by 1,080 US dollars/ton.

In addition to China Nuclear Titanium Dioxide, Huiyun Titanium also raised product prices 7 times during the year. In addition, Longbai Group has raised 8 times during the year, and Jinpu Titanium has raised 6 times during the year.

Director Chen Wenming, founder of Zhejiang Xiaode Law Firm, told reporters: "The main reason for the increase in the price of titanium dioxide is the increase in the price of raw materials such as sulfuric acid, which has led to a substantial increase in the production cost of titanium dioxide."

The price of sulphuric acid has continued to rise since July 2020, and it has accelerated even more since July this year. Among them, the average price of smelted sulfuric acid market in East China has risen from the lowest level of about 100 yuan/ton in 2020 to 800 yuan/ton, an increase of 700%, and the current price has reached the highest level this year.

In addition to the continuous rise in the price of sulfuric acid, the price of titanium concentrate (excluding tax) is also running at a high level. At present, the price of titanium medium ore with 38 grades and above in Panxi is operating in the range of 1650 yuan/ton -1700 yuan/ton, the price of 46 grade 10 titanium concentrate is operating in the range of 2400 yuan/ton to 2470 yuan/ton, and the price of 47 grade 20 titanium The price of concentrate is running at a high level in the range of 2500 yuan/ton to 2550 yuan/ton.

Yang Xun, an analyst of Yantai Titanium industry, believes that in the short term, the supply of titanium concentrates in the spot market is still limited, and it is expected that the price of titanium concentrates in Panxi region may continue to run at a high level.

The performance of many companies soared, the stock price soared

Thanks to the continuous rise in the price of titanium dioxide, the performance of related manufacturers in the first half of this year generally increased substantially. According to data from Eastern Fortune Choice, 7 listed companies in the titanium dioxide industry including Longbai Group, China Nuclear Titanium Dioxide, Panzhihua Vanadium and Titanium, Tianyuan, Jinpu Titanium, Huiyun Titanium, Anadar and other listed companies in the titanium dioxide industry achieved a total of business in the first half of this year. Revenue was 31.351 billion yuan, achieving positive growth over the same period last year. Among them, five companies' revenues in the first half of the year increased by more than 50% year-on-year.

In terms of net profit, the above-mentioned seven companies all achieved profits in the first half of this year, with a total net profit of 4.216 billion yuan attributable to their parent, and there were six listed companies with a year-on-year increase of more than 100%. Among them, Longbai Group achieved a net profit of 2.435 billion yuan in the first half of this year, far exceeding the other six companies. It is worth noting that the net profit of these seven listed companies in the first half of this year has exceeded the net profit of the whole year of last year.

Regarding the substantial increase in net profit, many listed companies said that in the first half of this year, the company’s main product rutile titanium dioxide market was in a strong business cycle, and the product was in short supply. The sales price continued to rise since the second half of last year, which promoted a large year-on-year increase in net profit. .

Benefiting from the boom in the industry, the stock prices of some listed companies have also risen sharply under the stimulus of the continuous rise in product prices and the substantial increase in operating performance. As of the close of September 15th, China Nuclear Titanium Dioxide's share price rose 252.99% during the year, ranking first in the titanium dioxide sector; the share prices of Anada and Tianyuan shares rose by 194.46% and 193.4% respectively, followed closely by them.

Industry chain will usher in value revaluation

Since the beginning of this year, a number of titanium dioxide companies have begun to enter the field of new energy, producing iron phosphate or lithium iron phosphate, realizing the coupling of the titanium industry chain and the new energy industry chain. 

At the beginning of this year, China Nuclear Titanium Dioxide announced that it plans to invest more than 13 billion yuan to build a number of projects including an annual output of 500,000 tons of lithium iron phosphate projects, to create a green recycling production system, based on the main business, and expand the development of lithium iron phosphate products. .

Longbai Group plans to establish a joint venture with Hubei Wanrun New Energy to build an iron phosphate project with an annual output of 100,000 tons. At the same time, it also plans an annual output of 200,000 tons of battery material grade iron phosphate projects and an annual output of 200,000 tons of lithium ion battery materials. Industrialization projects and projects with an annual output of 100,000 tons of artificial graphite anode materials for lithium-ion batteries.

In addition, the second phase of the Anadar 50kt/a battery-grade nano-iron phosphate expansion project was completed and put into production recently, and the iron phosphate production capacity of its holding subsidiary Tongling Nayuan will increase to 50,000 tons/year.

Huaan Securities analyst Liu Wanpeng believes that the core of the changes in the valuation system of titanium dioxide companies lies in the direction of the company's future development. Titanium dioxide companies are expected to use waste acid and ferrous sulfate in the by-products as raw materials for the production of iron phosphate, greatly reducing production costs and entering the new energy iron phosphate industry. As titanium dioxide companies accelerate their deployment in the field of new energy cathode materials, the titanium dioxide industry chain is expected to usher in a value revaluation.

At the policy level, the Ministry of Industry and Information Technology recently stated in a letter regarding the response to Proposal No. 1341 of the Fourth Session of the 13th National Committee of the Chinese People's Political Consultative Conference that the relevant departments are preparing the "14th Five-Year" National Reserve Development Plan and will give full consideration to the use of titanium dioxide. Include the recommendations of the national strategic resource reserve; relevant departments will actively promote the comprehensive utilization of titanium ore resources, and the Ministry of Science and Technology will set up a key special project for the development and utilization of strategic mineral resources to promote the development and application of high-value titanium ore resources; To support the green and healthy development of the titanium dioxide industry, relevant departments will also actively build a standard system for the titanium dioxide industry.