Third Quarterly Report Summary | Titanium Dioxide Enterprise Performance Exceeds Expectations, Raw Material High Supports Fourth Quarter Prices

Release date：2021/11/22

Since the beginning of this year, the price of titanium dioxide has been on the rise. Affected by this, the performance of many titanium dioxide companies in the first three quarters of 2021 rose sharply, exceeding expectations.

In this regard, Tian Xiaoyu, an analyst in the information industry of Zhuochuang, told a reporter from the Financial Association that the price of titanium dioxide remained high in the third quarter and the export demand was strong. Especially in September, affected by the double limit of energy consumption, the operating rate of titanium dioxide enterprises nationwide dropped significantly, and the supply was tight. Judging from the current situation, export demand remained unchanged in the fourth quarter, and the main raw material titanium concentrate was operating at a high level, which supported the continued high price of titanium dioxide, thereby supporting the annual performance of titanium dioxide enterprises.

Relevant enterprise persons told reporters from the Financial Associated Press that at present, there are more orders accumulated in the early stage, and production capacity is gradually returning to normal. The company is stepping up production and delivery of orders that were not delivered in time when production was limited before. At current prices, the company’s profits are relatively high, and its annual performance Will continue to maintain an upward trend.

Net profit rose sharply than expected

The third quarterly report showed that China Nuclear Titanium Dioxide (002145 SZ) had a net profit of 1.01 billion yuan, a year-on-year increase of 181.37%. Ananda (002136.SH) net profit was 129 million yuan, a year-on-year increase of 152.55%. Industry leader Long Bai Group (002601.SZ) has a net profit of 3.83 billion yuan, a year-on-year increase of 96.48%. Panzhihua Iron and Steel Vanadium Titanium (000629.SZ) net profit was 788 million yuan, a year-on-year increase of 311.49%. Huiyun Titanium Industry (300891.SZ) has a net profit of 173 million yuan, a year-on-year increase of 168.77%; Jinpu Titanium Industry (000545.SZ) has a net profit of 157 million yuan, a year-on-year increase of 393.83%.

In this regard, relevant business persons told the Cailian News reporter that from the perspective of the three quarterly reports, Longbai Group is still the most profitable company in the industry, even if the profit increase is the smallest, it is already close to 100%. The most important reason for this is that in the third quarter of this year, titanium dioxide companies have repeatedly raised product prices, and their profits have risen by an average of about 5%, up to a maximum of 3,500 yuan per ton. This profit has exceeded expectations.

In addition, Tian Xiaoyu also told a reporter from the Financial Association that in September this year, Panzhihua Iron and Steel's vanadium-titanium natural gas was controlled, and Jinpu Titanium Industry's limited power supply affected the production capacity. At most, the total domestic titanium dioxide production capacity fell below 66%. Product supply Subject to greater restrictions, it has played a role in promoting the price increase of titanium dioxide. Even in October, affected by supply and demand, titanium dioxide companies still issued price increase letters twice. At present, the mainstream price of titanium dioxide is 19,800 yuan-21,000 per ton, which is almost the highest price this year.

High performance in the fourth quarter may continue

The performance of titanium dioxide companies in the first three quarters has grown rapidly, exceeding industry expectations. Relevant business persons told the Cailian News reporter that from the current situation, the price of titanium dioxide in the fourth quarter can still be maintained at a high level, which will also bring benefits to the full-year performance of titanium dioxide-related enterprises.

In terms of production costs, titanium concentrate and sulfuric acid, the main raw materials of titanium dioxide, have stabilized. The price monitoring of Zhuochuang Information shows that the price of 46% titanium concentrate has stabilized at 2,350 yuan/ton in the past more than a month. Although since October, the domestic sulfuric acid market has shown a steady state of falling from the south to the north, the overall raw material prices can support the maintenance of high prices of titanium dioxide.

From the perspective of demand, the current export demand for titanium dioxide remains strong. Judging from the latest customs data, in the first nine months of this year, the cumulative export of titanium dioxide was 930,600 tons, an increase of 5.22% year-on-year. And the export price rose to 3050-3150 US dollars per ton in October, an increase of 300 US dollars per ton compared to September.

From the perspective of the supply side, the supply is still relatively small due to the double limitation of energy consumption. At the end of October, the domestic industry operating rate was 74.61%, of which the East China and Southwest regions increased more, but the current load in Shandong is still low.

In this regard, a related business person told the Cailian News that there were a lot of corporate orders in August, which have basically covered production in December. The current orders have actually been scheduled to the first quarter of next year, so the fourth quarter performance is based on prices and orders. Under the circumstances that all tend to rise, the price of the product can be maintained at a high level.

According to relevant industry data, the domestic titanium dioxide market achieved an industry-wide output of approximately 295,900 tons in October. Although an increase of 11.56% month-on-month, it decreased by 13.71% year-on-year in October 2020, and the inventory of titanium dioxide companies is still low.

At the same time, it is worth mentioning that in 2021, a number of titanium dioxide companies will deploy iron sulfate production capacity. In the fourth quarter of this year, Anada’s 50,000 tons of iron sulfate capacity has been fully put into operation, with a monthly output of 4,000 tons of iron sulfate. At the current price of 25,000 yuan/ton, it can provide at least 100 million yuan in sales revenue per month. Longbai Group's 200,000 tons of iron sulfate production capacity will also be commissioned at the end of this year, and the products are expected to be launched next year. Therefore, with the current situation in which iron sulfate is in short supply, these production capacities will bring growth to the performance of related companies in the future.