Lomon Billions Group Co. Ltd. just revised its first quarter report and announced that the estimated net profit will be 5.5 to 6 billion yuan, which is 3227.87% to 3530.40% year-on-year growth. This figure is 1 billion yuan higher that the previous broadcast because the titanium dioxide (TiO2) market is unexpectedly booming in the first quarter.
The continuous increasing TiO2 prices contribute to higher margin per tonne. Since the beginning of 2017, Lomon Billions, as one of the biggest and leading Chinese TiO2 supplier, has increased the prices four times. All grades of TiO2 accumulated increase is 3,200 yuan per tonne, export price is 400 US dollars higher per tonne. Billions’ net profit reaches 3,500 yuan per tonne, while Lomon is over 4,200 yuan per tonne; the corporation annual net profit is around 2.8-3.0 billion yuan. The TiO2 market is booming and the Q2 revenue is looking even better than Q1.
Export is increasing at a high volume. According to the latest customs report, TiO2 year-on-year export quantity saw a 15% increase in January and February. The recovery of real estate in the U.S. and Europe greatly creates demand of TiO2. India is a new market with great demand potential in near future. These markets encouraged the prosperous TiO2 industry in China.
TiO2 supply and demand structure is improving: the export quantity is increasing; local demand is stable; supply is tightened because of environmental regulations and knocking-out of weaker manufacturers; international leading manufacturers have shut down high-cost plants since 2015.
The local and international markets pushed the titanium concentrate price higher and big companies benefit from the greater price gaps. Chinese titanium concentrate prices stay high after environmental incident in Panzhihua last year. The price cooling down is probably not possible as the stable demand growth. This supports the high prices of TiO2.