On 10 Aug., 2016, China released an initiative to guide the shift towards industrial circular development, and solicited public opinion, planning to build a preliminary national industrial system geared towards environmentally friendly, low-carbon, and circular development by 2020. CCM believes that this will accelerate the elimination of outmoded TiO2 production capacity in China.
China's TiO2 market was in full swing in 2015. CCM listed the 2015 top 10 TiO2 enterprises based on data such as production capacity, output, exports and internet search frequency. Sichuan Lomon topped the list, well ahead of Henan Billions and CNNC TD.
On 20 Aug., 2016, Pangang Vanadium Titanium announced that it will sell its iron ore and titanium sponge businesses to Pangang Group and Ansteel Mining Group. According to analyst CCM, this will play a vital role in preventing Pangang Vanadium Titanium from being delisted due to sustained losses. Without the to-be-sold assets which have been generating long-term losses, Pangang Vanadium Titanium is expected to make a successful turnaround in H2 2016.
On 11 Aug., 2016, Xingmao Titanium's 30,000 t/a chloride grade TiO2 project passed Science & Technology Achievement Appraisal by the MIIT. Since H2 2015, China's chloride grade TiO2 industry has entered a period of rapid growth.
In H1 2016, CNNC TD had a stable revenue but recorded a fall in net profit. In spite of this, CCM believes that the company will have a bright future considering the advantages it holds in terms of production technology, business layout and circular economy.
In H1 2016, China's coating output continued its upward trend and increased by 6.43% YoY, with Northwest China and the central and southern part of China recording the most remarkable growths. CCM believes that it was increasing demand from the recovering real estate and furniture markets in China that boosted the coating output.
China's TiO2 export volume in H1 2016 hits new high
In the first half of 2016 (H1 2016), China's TiO2 market was flourishing. The market price of TiO2 increased by USD377.20/t (RMB2,500/t) after successive price rises. Insiders believed that the growing export market was the main reason behind the increasing price.
According to data from China Customs, in H1 2016, China's export volume of TiO2 increased by 26.25% YoY to 377,043 tonnes, reaching a new high.
In H1 2016, Sichuan Lomon Titanium Co., Ltd. (Sichuan Lomon) topped the list with an export volume of 90,314 tonnes. In addition, its YoY growth rate, as high as 33.49%, also surpassed those of most of the others.
Henan Billions Chemicals Co., Ltd. (Henan Billions) and Shandong Doguide Group Co., Ltd. ranked second and third with an export volume of 55,823 tonnes and 34,379 tonnes respectively. The combined export volume from the top five exporters accounted for 60.72% of China's total.
- Export destinations
In H1 2016, China exported the most, 179,498 tonnes, of TiO2 to the Asia Pacific Region, increasing by 27.78% YoY, accounting for 47.61% of the China's total. The Asia Pacific Region is an extremely important market for China's TiO2 industry.
China's export volume of TiO2 to Europe and the Middle East was 51,577 tonnes and 56,132 tonnes respectively, both grew by over 50% YoY.
China exported 35,042 tonnes of TiO2 to South America, decreasing by 17.66% YoY, the only destination that recorded YoY decrease.
According to analyst CCM, the high TiO2 export volume in H1 2016 can be attributed to the following reasons:
1. The performance-to-cost ratio of TiO2 further improved
In H1 2016, the TiO2 price kept increasing at a surprising speed in the domestic market. However, China's TiO2 export price did not increase but declined instead. Data from China Customs showed that the average export price of TiO2 in H1 2016 dropped by 18.74% YoY to USD1,515/t.
In stark contrast to that, some international enterprises such as DuPont and Huntsman raised their product prices at global scale in Jan. and May respectively this year, with a combined rise of about USD300-400/t.
This has improved the performance-to-cost ratio of Chinese TiO2 products, helping Chinese TiO2 enterprises to seek additional shares in the global market.
2. Continuous depreciation of the Yuan created possibility for low export price
Since H2 2015, the exchange rate of the Yuan against the US dollars has presented an upward trend, providing possibilities for Chinese TiO2 enterprises to explore the overseas market at low export price.
For example, the exchange rate on 1 June 2016 was 6.5889, up by 7.65% compared with 6.1207 on 11 June, 2015. Supposing that Chinese TiO2 export price is USD1,500/t, to reap equal profits, Chinese TiO2 exporters can reduce their export price by USD1,500/t*0.0765*6.5889=RMB756.08/t=USD114.75/t.
3. Chinese TiO2 enterprises attach more importance to export business
Since H2 2015, faced with severe oversupply in the domestic market, Chinese TiO2 enterprises have begun to turn to the overseas market. Many leading enterprises such as Sichuan Lomon and Henan Billions enlarged their export volumes.
Notably, on 15 Jan., 2016, CNNC Hua Yuan Titanium Dioxide Co., Ltd. established a subsidiary named CNNC TD (Hong Kong) Holdings Limited to boost its export business. On 25 April, 2016, Henan Billions provided a financing guarantee for its wholly-owned subsidiary Billions (Hong Kong) Co., Ltd. for USD90.53 million (RMB600 million), which was used to boost the development of the subsidiary's import and export business.
Read the full report: http://www.reportlinker.com/p04124927-summary/view-report.html
ReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need - instantly, in one place.
Contact Clare: email@example.com
Intl: +1 339-368-6001
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/titanium-dioxide-china-monthly-report-1608-300351316.html