Higher costs, demand to boost China TiO2 prices

Higher concentrate feedstock costs and firmer demand from international consumers are expected by market participants to prompt Chinese titanium dioxide prices to rise further in the short term.

Prices for 46pc grade titanium concentrate feedstock yesterday rose to 2,280-2,320 yuan/t ($349-355/t) ex-works with 13pc value-added tax unpaid, the highest level since Argus launched this assessment on 6 September 2012 at Yn1,550-1,700/t ex-works.

Concentrate prices have risen steadily since the end of the mid-February lunar new year holiday, in response to a shortage of medium-grade titanium ore feedstock supplies and renewed demand from dioxide producers. Tighter spot availability and higher demand from the titanium dioxide industry may lift titanium concentrate prices in the coming days.

Domestic offer prices from 12 key dioxide producers have moved up by Yn1,000/t, with export offer prices rising by $150/t fob in recent days after global dioxide producer Chemours on 31 March raised its offer prices for supplies to Asia-Pacific by $200/t, effective from 1 May.

These producers included Anhui Annada Titanium Industry, CNNC Huayuan Titanium Dioxide, Citic Titanium industry, Jiangsu Zhentai Chemical, Shandong Dawn Titanium, CNMC (Guangxi) Pgma, Kunming Donghao, Tianyuan Group, Panzhihua Hengtong, Guizhou Shengweihua, Ningbo Xinfu and Shunfeng Titanium Industry.

China's largest titanium dioxide producer Lomon Billions is expected to lift its domestic and export prices again on 9 April after its increase on 1 March in response to the higher feedstock costs and firmer demand from international consumers.

Most producers today have stopped signing contracts for April delivery below Yn19,500/t for 93pc rutile grade dioxide and Yn17,000/t for 98pc anatase grade dioxide because of low spot inventories and renewed buying interest from international consumers.

Argus yesterday assessed the range for 98pc anatase grade dioxide at Yn16,500-17,000/t ex-works and Yn18,800-19,500/t ex-works for 93pc rutile grade dioxide, the highest level since 16 October 2018 when Argus launched this assessment.

Export rutile prices were assessed at $3,000-3,100/t fob yesterday, the highest level since 16 October 2018, following a rise from $2,900-3,000/t fob on 23 March 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 the country's total output. January-February dioxide exports rose by 27,000t or 15.5pc from a year earlier to 201,100t in 2021, according to customs data.

Domestic exporters today are inclined to sell dioxide to international buyers at $3,100-3,150/t fob China for the dioxide produced by the sulphuric acid process because of tighter spot availability and expectations of firmer demand in the coming months.

Titanium dioxide producer Citic Titanium is likely to offer prices for dioxide produced by the chlorination process at $3,250-3,300/t fob today after a rise in export offer prices from 1 April, in response to higher production costs and buying interest from international consumers. The firm is unwilling to sign orders with international consumers in the coming weeks because of limited spot inventories and is focusing on fulfilling existing orders signed last month.

Pangang Vanadium & Titanium Resource sold small volumes of titanium dioxide at $3,000/t fob two weeks ago and plans not to sign contracts below $3,100/t fob in the coming days.