In the November 2016 which is coming to an end, the prices of China titanium dioxide have rocketed mainly in the anatase TiO2 sector. A few producers raised prices of anatase TiO2 by ￥2000/tonne in the beginning, middle, and end of the month continuously, because of the tight spot supply. On the other hand, rutile TiO2 has the same condition. Why is this happening? Where are the spot products?
- The capacity of producers can not be released. With the pressure of environmental inspection and other factors, the capacity is severely limited which leads to the low production amount and low inventory levels. In the East, Southeast, and South districts of China which are concentrated by TiO2 producers, one line operation is a common phenomenon.
- Advantages of exportation. The total export volume of TiO2 during Jan. to Sep. in 2016 was 540,000 tonnes which has exceeded the total export volume of the entire year 2015 within 3 quarters. In the past years, rutile TiO2 accounts for the big part in the export volume, but the export volume of anatase TiO2 bounced in the fourth quarter. Although the prices of exportation are lower than domestic trading, producers prefer exportation.
- Traders and downstream buyers preparing the cargoes and move the inventory. Traders and downstream buyers have been familiar with the frequently raised prices of TiO2. They think producers were bluffing, however, when the prices go up they intend to prepare the inventory. As the Chinese New Year is coming, it is obvious that buyers are preparing the inventory for the price increase.
The spot supply of TiO2 is so tight that the prices rocketed with some other factors. Prices of raw material ilmenite (46 Grade 10 Ilmenite from West Panzhihua) have raised to more than ￥1000/tonne (tax excluded); cost of truck transportation raised; positive news from major producers and consensus in the Guangxi district. These factors lead to a complicated and hot environment in the domestic titanium dioxide market in the Q4 of 2016.
Currently the prices of sulphate rutile TiO2 in domestic market is ￥13500-14800/tonne ($2071-2270), and ￥11200-12200/tonne ($1718-1871) (all tax included) for anatase TiO2.
Coming into the middle of Q4, 2016, it is almost certain that the prices of TiO2 in domestic market will rise in the whole year. Although the increased cost of raw materials and transportation reduced part of the profit, the overall condition of the market is good and producers get profits. In such circumstances, further movements should be taken care of, it is not always good that prices increase too fast. In this period, the price gap between anatase TiO2 and rutile TiO2 is decreasing, which is a critical point for both anatase and sulphate rutile titanium dioxide. It is predicted that the prices of TiO2 in domestic market will stand firm in November and price initials with different reasons shall show up continuously.
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