Insiders doubt the future high titanium slag market amid price rise 05-17-2019

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.

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