Summary: Titanium
dioxide and epoxy resin companies hiked prices due to EU anti-dumping tariffs
and raw material inflation, impacting 23 firms. Higher tariffs increased export
costs, hurt profits, and competitiveness, speeding industry shake-ups but
fostering integration, transformation, and upgrading.
It is a well-established pattern that titanium dioxide
(TiO2) prices rise at the beginning of each year, but this year’s increase
stands out from previous ones. Several leading manufacturers have announced
product price hikes, signaling the arrival of a new wave of price inflation in
2025. Amid multiple factors, this “price surge” can be seen as both a routine
annual increase for the TiO2 industry and a proactive response by Chinese TiO2
enterprises to the anti-dumping duties imposed by the European Union (EU).
Anti-Dumping Event Recap:
On January 9, the European Commission
issued a notice imposing definitive anti-dumping duties ranging from 0.25 to
0.74 euros per kilogram on TiO2 originating in China.
Following this, Chinese TiO2 suppliers
generally increased their product prices in January and February, particularly
for exports to Europe, Africa, and the Middle East.
On January 17, Venator, a global TiO2 giant, announced a
price increase of 300 euros per ton for all TiO2 sold in Europe, Africa, and
the Middle East, effective February 1, 2025, due to the European energy crisis.
Prior to the Chinese New Year, leading Chinese TiO2
companies such as Lomon Billions, Zhonghe Titanium, and Huiyun Titanium quickly
raised their TiO2 prices by USD50-100 per ton internationally. After the
holiday, Hengtong Titanium, CITIC Titanium, and Jinpu Titanium also issued
price increase notices with similar hikes.
As is widely known, the TiO2 industry typically
experiences collective price hikes, with most firms following the lead of the
industry leaders. Currently, numerous TiO2 enterprises have seized the pricing
window and raised their TiO2 prices accordingly. Statistics show that 23
companies have implemented price hikes, with international increases ranging
from USD50-100/t.
However, the USD50-100/t increase in Chinese TiO2 export
prices pales in comparison to the EU’s anti-dumping duties of 250-750 euros per
ton. The EU’s imposition of anti-dumping duties on Chinese TiO2 will also
impact the prices for consumers in the EU and the United States.
Rising Costs and
Demand Recovery. Raw Material Optimism Grows.
Another product experiencing a price
surge after the Chinese New Year is epoxy resin. Around the holiday, due to the
continuous rise in raw material epichlorohydrin prices, the cost support for
epoxy resin strengthened, prompting epoxy resin enterprises to increase their
quotes. Liquid epoxy resin prices rose to RMB 13,900-14,200/t
(approximately USD 1959/t), while solid epoxy resin prices in
Huangshan reached RMB12,900-13,300/t(approximately
USD 1822/t).
After the Chinese New Year, epichlorohydrin prices saw a
significant increase. By February 12, epichlorohydrin market prices stood at
RMB 9,300/t (approximately USD 1274/t),
up RMB 600/t (approximately USD 82/t) from before the holiday. Currently, downstream enterprises are gradually
resuming stable production, and demand is recovering, potentially increasing
procurement needs for epichlorohydrin. Given the recent high cost prices, the
market may experience further price hikes.
Overall, the epoxy resin market is expected to see a
slight recovery next week as downstream enterprises gradually resume full
operation and purchase epoxy resin based on production schedules. In the short
term, epoxy resin market prices are expected to rise slightly, with liquid epoxy
resin prices ranging from RMB 14,000 to 14,300/t (approximately USD 1959/t) and
solid epoxy resin prices from 13,000 to 13,300/t(
approximately USD 1822/t). Market participants should continue to monitor
upstream and downstream trends.
Additionally, it is noteworthy that the EU recently
announced temporary anti-dumping duty rates on Chinese epoxy resin, with the
highest rate exceeding 40%. For exporting enterprises, this translates to
higher export costs and reduced profits.
How Will
Anti-Dumping Measures Impact the Chinese Chemical Market?
The EU’s imposition of anti-dumping duties on Chinese
TiO2 and epoxy resin is a microcosm of intensifying international trade
frictions and will have significant impacts on relevant Chinese industries and
enterprises. Let’s analyze this using TiO2 and epoxy resin as examples:
▶▶Rising Export
Costs and Limited Market Share
Anti-dumping duties directly increase export costs,
weakening price competitiveness. For instance, TiO2’s price advantage in the
European market diminishes, potentially leading to a decline in exports. The EU
is the second-largest export market for Chinese TiO2, and anti-dumping duties
could significantly reduce Chinese enterprises’ market share in the EU.
▶▶Pressure Transmission to Downstream Sectors
Epoxy resin and TiO2 serve as crucial raw materials for
chemicals, coatings, plastics, and construction materials.
Increased raw material costs due to anti-dumping duties may cascade down to
downstream industries, affecting the competitiveness of coatings,
automotive, and home appliance sectors.
▶▶Heightened Operational Pressures for Enterprises
High tariffs compress profit margins for some enterprises,
particularly small and medium-sized enterprises facing existential crises. This
may manifest as production cuts or suspensions. Export obstacles could intensify
domestic market competition, prompting enterprises to adopt low-price
strategies to capture market share, further eroding profits.
▶▶Accelerated Industry Consolidation
Anti-dumping duties expedite industry consolidation, potentially
eliminating less competitive enterprises. Meanwhile, enterprises with
technological advantages and economies of scale can enhance their
competitiveness through innovation and product upgrades. For example, some TiO2
enterprises are responding to EU market restrictions by developing high-end
products and expanding into emerging markets like Southeast Asia.
In
summary, the imposition of anti-dumping duties poses short-term challenges such
as increased export costs and reduced market share for enterprises. However, it
also catalyzes industry integration and transformation. In the long run,
enterprises adopting strategies like technological innovation and market
diversification are poised to secure more favorable positions in global
competition. Additionally, this policy underscores the importance of
compliance, risk prevention, and diversified market layouts in international
trade.
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