Titanium dioxide international giant price increase companies expect prices to stop falling

Kronos recently announced that from March 1, 2013, all Kronos titanium dioxide products will increase in prices outside North America and Europe, increasing more than 10%. The market generally believes that the Connor's price increase has a limited impact on domestic titanium dioxide prices. With the arrival of the traditional peak season in March, the price of titanium dioxide is expected to stop falling.

With limited domestic influence on the 25th, Connors announced that it will increase the prices of all titanium dioxide products sold outside of North America and Europe. The price adjustment plan is specifically as follows: Starting from March 1, 2013, all Conoz titanium dioxide products will be increased by US$250/ton outside North America and Europe, or determined according to the contract requirements. It is understood that this time the price increase rate of more than 10%, some analysts believe that Connor's intention to raise prices is to prevent the decline in the price of titanium dioxide.

"The domestic titanium dioxide price does not have the right to speak, generally with the international prices rise and fall." An employee of the sales department of Ananda told the China Securities News reporter, "But from this price increase, the domestic titanium dioxide The price has not had much impact."

The above-mentioned staff members told the reporter that at present domestic titanium dioxide production enterprises are still waiting to see whether large international companies will follow up the price increase and whether the market can accept price increases.

For the price of the Conoxus price increase, Yang Xishen, an analyst of titanium dioxide in the branch of the branch of the Business Society, believes that the price increase will have a relatively small impact on domestic titanium dioxide production enterprises. “First, Connors’ market share in China is very small, and the impact of price increases is not very large; second, the current downstream demand in the domestic market is still cold, and the real estate market has not yet recovered.” Yang Xun told the China Securities Journal reporter.

According to business statistics, the operating rate of titanium dioxide production enterprises after the Spring Festival is only 5-6 percent, far below the level of the same period in previous years. “The main reason is that downstream demand is still weak. Before the Spring Festival, some downstream production enterprises are afraid of rising raw material prices after the holiday, so they are mostly stocked. After the Spring Festival, the industry as a whole is in the consumer inventories stage,” said Yang Xun.

The low price of domestic prices Since its record high in 2011, the price of titanium dioxide has been falling sharply. Although domestic titanium dioxide prices have slightly rebounded in 2012, titanium dioxide prices have been in the downward channel since March 2012. By the end of last year, the supply of titanium dioxide in the global market had been surplus, and the price had fallen by more than 20% from the beginning of the year.

According to the statistics of the business community, on February 27, 2013, the domestic price of titanium dioxide was RMB 16,626.67 per ton, which was the low point of the price in the past two years.

The downward price directly drags down corporate profits. In 2012, titanium dioxide production enterprises experienced a general decline in performance. Anandada Express reported that in 2012, the company’s operating income dropped by 4.66%, and the net profit attributable to shareholders declined by 61.31% year-on-year.

Annada pointed out in the letter that during the reporting period, due to changes in the market of titanium dioxide, the company's operating performance was high and low before the end of the first half of the company's operating performance is stable; from the second half, by the main raw material titanium concentrate, high titanium slag With the dual effects of price increase and continuous decline in product prices, operating profit decreased by 64.59% from the previous year.

Yan Lilian (002601) Performance Express reported that operating revenue in 2012 decreased by 5.37% year-on-year, and net profit attributable to shareholders declined by 48.68% year-on-year. The performance forecast of Baotie Co., Ltd. (600456) also showed that the net profit attributable to the parent company from January to December 2012 will fall by more than 80% from the same period of last year.

Looking forward to the sales season entering January this year, the price of titanium dioxide remained within the price range of 1600-1700 yuan per ton. "The current price of titanium dioxide is close to the cost price, and the space for further price reduction is very limited." The above staff told reporters.

For the future trend of titanium dioxide prices, the market is still in a wait-and-see attitude. “If the international giant’s price increase can cause the price of international titanium dioxide to stop falling, the domestic price of titanium dioxide will gradually stabilize. In the short term, in March of last year, the traditional sales season of titanium dioxide, we are also looking forward to seeing titanium dioxide. What kind of level can the price be restored?” said the above-mentioned staff.

Yang Xun basically agreed with this judgment. He told the China Securities Journal reporter that the demand season that followed will be a critical period. “As the weather improves, the operating rate of downstream companies will gradually increase, demand is expected to turn stronger, and the sales of titanium powder will pick up. However, in the long run, the international giants DuPont and Tener will increase their distribution in China this year. Channels, market competition pressure will be greater."