Higher cost, demand to boost China TiO2 dioxide prices

Market participants expect Chinese titanium dioxide prices to extend their gains in the short term in view of higher concentrate feedstock costs and firm demand from international consumers.

Prices of 46pc grade titanium concentrate feedstock yesterday rose to 2,060-2,150 yuan/t ($319-333/t) ex-works with 13pc value-added tax unpaid, the highest level compared with Yn1,550-1,700/t ex-works on 6 September 2012 when Argus launched this assessment.

Domestic offer prices from over 12 major dioxide producers on 1 March moved up by Yn800-1,000/t, with export offer prices rising by $150-240/t fob after major global dioxide producers Chemours, Tronox and Venator on 24 February raised their offer prices for supplies to the Asia-Pacific region by $200/t, effective from 1 April.

Japanese dioxide producer Ishihara Sangyo Kaisha on 1 March increased its offer prices by $200/t, effective from 1 April, for the Asia-Pacific region.

Most Chinese producers have been raising their output since April last year after the country's Covid-19 outbreak eased and buying interest from international consumers rose. Domestic titanium dioxide output rose to 308,800t in January 2021, an increase of 44,200t or 16.69pc from 264,600t a year earlier.

China produced 351.2mn t of titanium dioxide in 2020, up by 10.39pc or 330,000t from 2019. Around 2.86mn t was produced from rutile, accounting for 81.31pc of the total, while 538,000t was produced from anatase, accounting for 15.33pc, according to the titanium dioxide section of the China national chemicals information centre.

Argus last assessed the range for 98pc anatase grade dioxide at Yn14,500-15,000/t ex-works and Yn18,000-19,000/t ex-works for 93pc rutile grade dioxide yesterday, the highest level since 16 October 2018 when Argus launched this assessment.

Major producers have signed some contracts for March delivery at Yn185,000-190,000/t for rutile grade dioxide after their price increases on 1 March. Small and medium-sized suppliers did not sell below Yn180,000/t paid by cash in the past couple of days because of the higher concentrate feedstock costs and renewed buying interest from consumers in and outside of China.

Export prices rose to $2,800-2,900/t fob yesterday, the highest level since 16 October 2018, from $2,750-2,850/t fob on 25 February driven by the rise in domestic prices and firmer demand from international buyers. China's dioxide exports rose by 211,300t or 21.1pc from 2019 to 1.21mn t in 2020, accounting for 34.6pc of its total output.

Export orders have been increasing since last April following production cuts at international producers Chemours, Tronox and Kronos during the sustained Covid-19 pandemic. International buyers have raised their imports from China since last April because of the country's stable supplies.

China's largest titanium dioxide producer Lomon Billions on 1 March raised its export offer prices for titanium dioxide produced by the chlorination process to $3,050/t fob from $2,900/t fob in February in response to the higher feedstock costs and strong demand from international consumers.

Citic Titanium has suspended quoting prices for dioxide produced by the chlorination process since the middle of December because of limited stocks, fulfilling existing orders signed with consumers since last April.