In April
2019, Lomon Billions raised the price of high titanium slag to 6,800 RMB per
ton. Although this action did boost the present market to a certain extent, industrial
insiders held a negative attitude towards the recovery of the future market.
With the enterprises
in Jinzhou releasing a coming invitation for bid of high titanium slag in May,
a possibility of substantial increase of price is not expected. An insider in
the industry considered that in spite of a fierce competition in the high
titanium slag market a serious excess of production has been witnessed, which
was likely to bring the market to an extent without a huge growth of price. It
would not be better if the price of high titanium slag in May should be stable
or experience a slight increase.
Sharp increase of price in high titanium slag
market may represent hype
According
to the invitation for bid in Jinzhou in April, 90% of high titanium slag reached
the price of 5,700 RMB per ton. Along with the tax reform the bidding price for
high titanium slag experienced an increase by 40 – 50 RMB per ton. Besides,
some large factories also announced a rise of price of high titanium at the
same time.
However,
some insider considered this movement as a hype, who held an opinion that the
increasing price of high titanium slag in April had no indication for
improvement in the market quotation. The price of ore quoted by many
enterprises in the high titanium slag industry previously was very high, which
pushed down profits to a great degree. In addition, there was an increase of
production for high titanium slag in that month. Hence, there was no doubt to
witness a situation of oversupply in the market.
As for the
announcement of a rising price from some large factories, the insider thought
that it was actually a normal reaction regarding the different index and price
of the titanium ore they used as well as the low price of calcium magnesium. In
fact, he considered it as a hype of the market.
The cutthroat competition between enterprises
is affecting the development of high titanium slag market badly
The
existence of cutthroat competition between enterprises has a bad effect on the
high titanium slag market. Given that the number of high titanium slag
enterprises is of restriction, a relevant adjustment of yield should be made
between enterprises. Instead, in order to excel themselves and make a better
living in the industry, some factories would rather increase the yield and push
down the profit, which not only affected the market price of high titanium slag
but also lead to the situation of oversupply.
The unstable situation of high titanium slag
market affects downstream enterprises
However, the
instability of high titanium slag market could have a chain effect on titanium
tetrachloride market and titanium dioxide market. First of all, there is a
restriction of titanium tetrachloride enterprises and high titanium slag is a
main element for the creation of titanium tetrachloride. Even with a good run
of the market, titanium tetrachloride enterprises still have great dependence
on high titanium slag market. Furthermore, the increase enterprises of titanium
dioxide using chloridization may bring a high demand of high titanium slag.
However, it may take a long time for the chloridization technology of titanium
dioxide to get mature. Hence, the high titanium slag market probably has to
wait for a long time to get more demand.
For more
information about China’s chemicals market, please have a look at our Titanium Dioxide China Monthly Report.