After several rounds of price announcements in 2021, the domestic titanium dioxide market has continued its strong trend since 2022. After the overall increase in the industry in March, in mid-May, leading companies once again set off a wave of publicity.

At present, although the domestic mainstream market price of titanium dioxide by sulfuric acid method has reached a high of about 20,000 yuan/ton, industry analysts said that in the context of the recent strong export demand, the high price may still be supported.

1. The leader will rise again during the year

In 2021, the domestic titanium dioxide market has maintained a strong market as a whole, and leading companies have issued price increase letters 11 times during the year. After entering 2022, this strong trend will continue.

On the evening of May 12, Longbai Group (002601), the leader in the titanium dioxide industry, issued a price increase announcement. According to the market demand for titanium dioxide, the rise in raw material prices and the depreciation of the RMB exchange rate, the company's chlorination method titanium dioxide will be released from now on. The sales price is increased by 700 yuan per person/ton on the basis of the original price, and the sales price of R-996, LR-108, LR-972 sulfuric acid titanium dioxide is increased by 500 yuan/ton on the basis of the original price.

Earlier on May 10, Longbai Group also announced that from now on, the price of sponge titanium will be increased by 5,000 yuan / ton, the price of titanium tetrachloride will be increased by 500 yuan / ton, and the price of zirconium sponge will be increased by 10,000 yuan / ton. The price of zirconium was raised by RMB 1,000/ton.

This is the second time that Longbai Group has issued a price increase announcement for titanium dioxide and other products this year. As early as March 9, the company also announced that the sales price of various types of titanium dioxide (including sulfuric acid method titanium dioxide and chloride method titanium dioxide) will be increased by RMB 1,000 per ton on the basis of the original price for domestic customers, and for international customers. Various customers are raised by $150/ton.

At the beginning of the year, driven by leading companies such as Longbai Group, the titanium dioxide industry also experienced a wave of concentrated propaganda. In December 2021, Longbai Group announced that starting from January 1, 2022, the price of various types of titanium dioxide will be increased.

However, after several rounds of propaganda increases, the overall price of titanium dioxide market did not fluctuate much during the year.

According to the statistics of Yan Titanium, by the end of 2021, the mainstream quotations of most domestic sulfuric acid rutile and anatase titanium dioxides will be 19200-21000 yuan/ton and 17800-19000 yuan/ton. The mainstream prices are 23,500-26,000 yuan/ton and 30,500-32,000 yuan/ton (both tax-included cash ex-warehouse prices).

At present, the mainstream quotations of most domestic sulfuric acid rutile and anatase titanium dioxides are at 19800-21500 yuan/ton and 18500-19800 yuan/ton. 26,000 yuan / ton and 30,500-32,000 yuan / ton (the above are all cash out-of-stock prices including tax).

The rise in raw material prices is the main reason in the announcements made by listed companies in the titanium dioxide industry.

It is understood that the mainstream price of titanium concentrate in the Panxi region has remained stable this week. The titanium ore market in Panxi area is relatively stable as a whole. The operating rate of the main downstream titanium dioxide market has increased slightly. The overall demand is stable, but the market is at risk of weakness. Most miners have relatively stable and firm quotations, while a small number of miners have slightly loosened their prices. At 10-30 yuan / ton. At present, the price of 38-grade titanium medium and above in Panxi area is about 1550 yuan/ton, the price of 46-grade 10 titanium concentrate is about 2180-2250 yuan/ton (excluding tax), and the price of 47-grade 20 titanium concentrate is 2450-2550 yuan/ton. Yuan / ton.

2. Performance is under pressure

According to the titanium dioxide industry data of China Coatings Industry Association, in the first quarter of 2022, the cumulative output of titanium dioxide in China was about 1.0373 million tons, an increase of 11% over the same period last year, and the output increased by about 106,700 tons. In March, China's titanium dioxide production reached a record high of 356,500 tons, an increase of 5.07% from February and an increase of 8.54% from the same period last year.

In terms of price, in the first quarter, the price of domestic rutile titanium dioxide at the end of the quarter was 19,500 yuan / ton to 21,000 yuan / ton, a cumulative increase of 800 yuan / ton compared with the price at the beginning of the quarter, an increase of about 4%; The final price was between 17,800 yuan / ton and 19,000 yuan / ton, a cumulative increase of 300 yuan / ton compared with the beginning of the season, an increase of about 2%.

But even so, the large increase in raw material prices still makes it difficult for relevant companies to digest.

Taking the titanium dioxide leader Longbai Group as an example, in the first quarter of 2022, the company achieved a revenue of 6.068 billion yuan, a year-on-year increase of 30.63%, and a net profit of 1.064 billion yuan, a slight increase of 0.03%. In the report, the company's operating cost was 3.955 billion yuan, an increase of 33.38 percentage points over the previous year, which was greater than the increase in revenue.

The first-quarter net profit of China Nuclear Titanium Dioxide, the second largest in the industry, only increased by 4.61% year-on-year to 300 million yuan, and the cost increase of 29.06% was higher than the revenue increase of 20.52%.

Subject to the increase in raw material prices, Huiyun Titanium Industry and Lubei Chemical Co., Ltd. fell into the predicament of increasing revenue without increasing profits. In the first quarter, Huiyun Titanium’s revenue was 411 million yuan, an increase of 28.61% year-on-year, and its net profit was 29.0739 million yuan, a year-on-year decrease of 34.8%; Lubei Chemical achieved revenue of 1.354 billion yuan, an increase of 45.96% year-on-year, and a net profit of 53.7558 million yuan. A year-on-year decline of 49.54%.

As the largest application industry of titanium dioxide, the situation of coating companies is even more embarrassing. On March 7, the China Coatings Industry Association issued the "2022 China Coatings Industry Profit Warning", pointing out that although the overall output and main business income of my country's coatings industry in 2021 are in positive growth, the growth rate of total profits has appeared cliff-like since the beginning of the third quarter. Going lower, it entered negative growth at the beginning of the fourth quarter, and the total profit for the year was generally negative. As of early March 2022, due to the rapid rise in upstream raw material prices, most companies in my country's coatings industry have already suffered losses.

3. Layout transformation

In addition to price increases, there is another phenomenon worthy of attention in the titanium dioxide industry.

On April 13, Longbai Group submitted a prospectus to the Hong Kong Stock Exchange. It disclosed in the prospectus that the company is cultivating the second growth curve and laying out new fields such as lithium iron phosphate, graphite anode materials and iron phosphate. Longbai Group plans to invest in the industrialization project of lithium-ion battery materials with an annual output of 200,000 tons, the artificial graphite anode material project with an annual output of 100,000 tons of lithium-ion batteries, and the battery material-grade iron phosphate with an annual output of 200,000 tons.

In addition, according to the announcement of Jinpu Titanium Industry on March 28, the company signed a strategic cooperation framework agreement with the Management Committee of Anhui (Huibei) New Coal Chemical Synthetic Materials Base, and plans to build 200,000 tons/year battery-grade iron phosphate and 200,000 tons/year iron phosphate. Lithium and other new energy battery materials integration projects, with a total investment of about 10 billion yuan.

In fact, early entrants have already enjoyed the development dividends of the new energy track. Ananda handed over a unique quarterly report. During the reporting period, the company achieved revenue of 653 million yuan, a year-on-year increase of 60.55%, and a net profit of 56.5772 million yuan, a year-on-year increase of 85.21%. The company pointed out in the performance forecast that the substantial growth in performance was due to the continuous improvement of the lithium battery industry chain, the strong growth of downstream customers' demand for lithium battery material products, the release of the production capacity of the subsidiary's new iron phosphate plant, the increase in gross profit margin, and the significant year-on-year operating performance. increase. In 2021, Ananda's 50,000-ton/year battery-grade iron phosphate expansion project will be completed and put into production on schedule.

Why do titanium dioxide companies choose to enter the lithium battery field?

From the perspective of the industrial chain, titanium dioxide is in the upstream of iron phosphate, and titanium dioxide enterprises have natural advantages.

Longbai Group stated in its annual report that the company's waste by-products such as ferrous sulfate, excess capacity caustic soda, sulfuric acid, steam, hydrogen, etc. can be directly or indirectly used in the production of positive and negative electrode materials for lithium batteries, which is helpful for reducing production costs. Its prospectus also shows that the company will use titanium dioxide by-products, and combine the company's experience in powder material research and development and production to prepare high value-added iron phosphate materials, and further produce lithium iron phosphate, which will help the company to form a more complete Industrial system, and actively promote the company's integration into the new energy material production and manufacturing supply chain.

Ananda announced that the company took the lead in the industry to use titanium dioxide waste ferrous sulfate and wet-process phosphoric acid as raw materials to achieve high-quality application of waste and auxiliary resources.