Recently, a number of Titanium Dioxide manufacturers said that global titanium dioxide demand is strong, supply is tight, market prices may continue to rise. The main producers Chemours, Venator, Tronox and Kronos reported positive results in the first quarter, and are expected to continue to grow for the rest of the year.
Sales increase and inventory decrease
"Chemours' sales increased by 2% in the first quarter compared with the fourth quarter of last year. Demand for coatings, plastics and laminates continued to rise in the second quarter of the company's titanium technology business. " "In the first half of this year, new housing and renovation in various countries are driving the rapid growth of demand for architectural coatings, and the demand for DIY products has maintained a strong momentum since 2020," said Mark Nuo, President and chief executive officer of Chemours in the financial report conference call on May 4
John Romano, chief executive of Tronox, said that titanium dioxide sales in the first quarter increased by 15% compared with the fourth quarter of last year, with strong demand in various regions, but the biggest growth was in Europe and the Asia Pacific region. Simon Turner, chief executive of Venator, also said that market demand had grown surprisingly strongly. All industries and regions have strong demand for functional titanium dioxide. Demand for special titanium dioxide products showed a good recovery momentum, mainly in the textile and automotive industries. Venator's titanium dioxide sales increased by 14% in a row. Compared with the fourth quarter of 2020, the utilization rate of the plant has increased, and the inventory is still tight in the whole first quarter.
Demand back on track
The overall demand for titanium dioxide has basically recovered to the level before the epidemic. Kronos report shows that the sales volume in the first quarter of this year was 141000 tons, an increase of 4% compared with 136000 tons in the same period of last year, and an increase of 14% compared with 124000 tons in the second quarter of 2020. The total sales volume in the third quarter of last year was 136000 tons, compared with 135000 tons in the fourth quarter. Other manufacturers did not report sales, but their year-on-year sales growth showed the same trend. Chemour's titanium dioxide sales in the first quarter of this year increased by 16% year-on-year, while that in the first quarter of 2020 increased by 19% year-on-year, and that in the second quarter of 2020 decreased by 9% year-on-year. The sales volume of Tronox increased by 16% in the first quarter of this year, 6% in the first quarter of last year and 27% in the second quarter. Venator's titanium dioxide sales in the first quarter of this year fell by 1% year-on-year, while in the second quarter of 2020, they fell by 21% year-on-year.
"The recovery in demand for titanium dioxide started when DIY products were launched in the second quarter of last year," said Mark Newman, COO. Architectural coatings accounted for the majority of the company's titanium dioxide business, and the rest was laminate and plastic business, followed by the demand of the construction industry, especially the demand for new housing. Based on the current development trend, it is expected that the sales volume will rise in the next three quarters. "
Supply is becoming tight
After the collapse of demand in the second quarter of last year, titanium dioxide manufacturers all over the world reduced production significantly, and then production recovered slowly, resulting in a tight supply situation. "Judging from the operation of our plant in March and April, our output in the second quarter will be higher than that in the first quarter," Mr Newman said. In addition, in terms of the supply situation of each factory, there are restrictions on the supply of raw materials, but these are only temporary effects. " Venator also expressed a similar view.
In the first quarter of this year, although the price of titanium dioxide is rising, it has not fully recovered. At the same time, production costs are increasing. Hassan Ahmed, an analyst at alembic global advisors, a US investment research firm, expects titanium dioxide prices to continue to push higher this year. In a recent research report, he pointed out: "at present, the price of titanium dioxide is only slightly higher than the average level of 16 years and the crisis level of 2008-2009, so the upward potential is large." Titanium ore prices continue to rise, which may further push up the price of titanium dioxide.
Turner pointed out that China's exports remained stable in the first quarter of this year, and the main export markets were other Asian countries and emerging markets. "Due to China's strong demand for titanium dioxide and transportation restrictions, China's exports to Europe and North America will decline, which will make customers hope that we can provide reliable supply," he said Due to the rising costs of raw materials and transportation, Chinese titanium dioxide manufacturers are also increasing their sales prices, thus continuing to narrow the arbitrage space.
According to IHS Markit data, Chemours, Venator, Tronox and Kronos together account for 40% of the global titanium dioxide production capacity, with a total global production capacity of 8.4 million tons / year in 2020. Chemours has the largest production capacity, about 1.2 million tons / year; The second is Tronox's production capacity of 1 million tons / year; Both Venator and Kronos are 500000 tons / year. In the past 10 years, China's titanium dioxide production capacity has surged from 2.1 million tons / year in 2011 to 3.7 million tons / year in 2020, accounting for 44% of the world's total production capacity. Over the same period, China's annual net exports increased from 41000 tons to 69000 tons.
