TiO2 market analysis weekly updates, 3rd May 2021

Keyword: Unpredictable

If we say the first half of 2021 tio2 market was certain to surge, then now it is getting unclear and hard to predict.
There were many reasons for the certainty of price increasing in the first half, eg.:

• After pandemic recovery
• Annually peak season
• Centralized release of demand
• Reduced logistics efficiency
  …Why now it is becoming unpredictable?When it came to the certainty in the past months, there were almost no challenging aspects to the uptrends.
  Now, when we say it is unpredictable, for sure there are challenging aspects, and they are growing.
  What are they?

• After the fifth round of price increase, now the made in China TiO2 almost lost all price allure in the market when competing with western brands.
  And the SP price is too much close to the CP grade, which makes distributors and endusers standing by and watch instead of taking immediately action.
• All participators is running out of stocks. Now, the manufactures are finishing the orders placed in March, April, even in Feb. Looks like they are
  truely busy, and running in full load. But the reality is, after the Fourth round of price in crease in late April and the fifth in Early May, the new
  orders are dropping. Especially after the fifth round, and if more buyers choose to wait, it will hard for the manufactues to continuing working in a full load.

So why don’t they decrease the price?

1. The pressure from the shrinking needs is burable. The last straw is not yet to come.
2. From the objective reality aspect. The cost is still increasing.

The increasing is based on a solid ground.

• Raw materials price increasing. From the ilmenite to sulphate, the price is still going up. According to informed sources, the LM is going to raise the price os ilmenite
  in last week. If it works out, then the 6th round of price increasing of TiO2 will be a high probability event.
• Environmental inspection. Now it is again a hot topic in chemical industry of China, the central government sent groups of inspectors to local for the purpose of Environmental inspection.
  And they report only to the central government, which makes the local entrepreneurs in high pressure, and from time to time halt the production to avoid the possibility of being figured.
• The potential of new demands releasing. The domestic market of China is cooling down gradually, and most of the big demands were fed up in April. But to June, it is another two months, and most
  of the endusers stock for less than 3 months. Which means, they are gettting hungry again.
• The logistics is still not fully recovered which makes the whole supply chain looks like a dripping water pipe, instead flushing as in old days. This is a reason of the shortages the market felt,
  instead of huge demands. The gloabl economical growth in 2020 and 2021 can not nursing great demands as we all know. The demands is not changing, the capacity is not changing, but if the pipe is getting
  smaller, then you will feel huge gap between demands and supply.

What is the suggestion?

Be cautious.

Original text: TiO2 market analysis weekly updates, 3rd May 2021