The Chinese TiO2
manufacturer Anhui Annada Titanium published a great financial success in 2017
regarding revenue and net profit. This result is mostly based on the general
prosper industry of TiO2 in China, according to CCM’s analysts, which is likely
to continue in 2018.
The
biggest manufacturer of titanium dioxide of Anhui Province, China, shows a big
improvement in its financial performance last year. On March 27, 2018, Anhui
Annada Titanium published its 2017 financial report. According to market
intelligence firm CCM, the sales value was able to increase by 39.51% compared
to 2016. But the net profit was skyrocketing in 2017. According to the report,
the company was able to increase the net profit by 285.24%.
In
the financial statement, Anhui Annada Titanium attributed its soared net profit
from the TiO2 business to the sustained prosperity of the Chinese market,
characterised by a rise in both TiO2 prices and export volumes. Furthermore,
the central government continues to promote sustainable urban-rural development
and the supply-side structural reform in 2018, maintain a steady growth of the
real estate industry, and strengthen environmental protection law enforcement.
Therefore, the TiO2 industry is likely to remain prosperous in the short term.
What’s
more, Anhui Annada is also optimistic about the future of the iron phosphate market
due to the boom in the alternative energy vehicle industry in China and
worldwide. Despite the reduced subsidies, this emerging industry is highly
valued by the state as a standard for financial support specified and technical
benchmarks renewed. Upstream iron phosphate manufacturers are expected to
significantly benefit as more alternative energy vehicle enterprises with high
innovative abilities and other superiorities mushroom in the well-organised
market.
Due
to the fact, that Anhui Annada is only a medium-sized player in the Chinese
TiO2 business, facing competitors like Henan Billions and CNNC Hua Yuan
Titanium Dioxide, the company already invests a large amount in the new energy
industry. According to CCM, the investment into the booming Li-ion battery
industry in China is a wise move, because it is unlikely that the company can
compete successfully in the TiO2 market in the long run.
Furthermore,
the focus on the iron phosphate industry has another benefit for Anhui Annada,
because the company already produces the needed raw material ferrous sulfate in
the TiO2 manufacturing process, which can be used for the iron phosphate
industry.
TiO2 development in
China 2017
Both
capacity utilisation rate and product quality of China's TiO2 industry
significantly improved in 2017.
Regulated
and controlled by both government policies and market economy, the effective
capacity of China's TiO2 industry decreased by 3.20 million t/a in 2017, while
the total output increased to 2.70 million tonnes, which indicated an improved
capacity utilisation rate.
As
statistics show, the gap between TiO2 prices of China and overseas is
consistently shrinking, a result of quality upgrading of domestic products.
Previously, most of China's manufacturers, restrained by backward production
technology, were only able to produce sulphate process TiO2 and a small range
of special TiO2 such as enamel grade ones or TiO2 for welding rod. Therefore,
export prices of Chinese TiO2 remained low for a long time.
In
2017, sulphate process remained to be the major production approach of China's
TiO2, as chloride process TiO2 capacity only accounted for 7.5% of the national
total. The overall domestic TiO2 capacity is expected to increase in 2018, 70%
of which will be of chloride process TiO2. However, China's production
technology of chloride process TiO2 is underdeveloped and need a long time for
advancement before achieving smooth operation. Even if chloride process TiO2
production lines to be built in 2018 are put into operation, the combined
capacity would only account for 20% of the national total, far from the
international level (66%).
About the article
The
information for this article comes from CCM, China’s leading market
intelligence provider for the fields of agriculture, chemicals, food and feed.
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