China’s TiO2 Market: The Pot Is Simmering, Would Boil Over Soon?

28 Jun., 2020, China’s tio2 manufacturer Panzhihua Taihai Technology announced price hike of its series antase and rutile grade tio2, with an increase of CNY500/mt and USD80/mt. They are second to Ishihara to raise price amid the world’s struggling to recover from Covid-19, in company with demand rebound.

The notice signaled a rally follows three-month consecutive slump in price, and an upswing in market confidence. Frankly, it should not in any case be marked as unanticipated because market in China was rife with discussions since mid of Jun. on when and from whom the notice would come up. And in fact price of June’s contracts was the second record low in the 21 century posing the worst recession since December of 2015. Yet in depression market woke up to realize that hard landing of price is happening from a sign as more than 90% of Chinese tio2 manufacturers were operating at loss, with its back against the corner there was no room for them to recede, would prefer to call off production if the trend continues sliding downward.  Many reckon it is not until now did the market wade though minefield and set foot in a zone where purchase to be relatively safe, such a sentiment manifested itself in speculative snapping up inventories at factories whose price was extremely low.  It is indeed the case that was happening in the past weeks in China ironically a handful of factories said their inventories were swept away overnight. With buying orders rushing franticly around from factory to factory the destocking motion was escalated and expediated.

People who are suspicious with effectiveness of these notices may argue that by now the 12 manufacturers who announced price hikes are medium to small sized enterprises,  while leading ones are ambiguous about their next step.  Destocking at factories of their scale takes longer time but what they are most concerned about should be orders of August and beyond. So, it is not a question on yes or no, “time” instead. Market is permeated with a hearsay that industry leader may take action on 10 Jul. or thereabout.

Another factor sparked market flareup is soaring export orders as in June the overseas market is thirsty for replenishing supply, which is deterred by the pandemic burst in late Mar. worldwide then the massive lockdown, overseas market has to live off  stockpiles, which was at pinnacle in Mar/Apr and now exhausted. We are looking to a rather large number of export volume of June.   It should be noted this is the third time this year that exports ramping up concurrently with price hikes in Jan. (103.4kt), Mar.(157.2kt), and June. (unknown yet). Meanwhile, China exported 71.2kt in Feb. and 66.5kt in May. This illustrates that export sale is gradually synchronizing with home sale in market volatility, a phenomenon should be attributed to rapid growth of China’s tio2 export,  transparency and immediacy of information sharing established by means of email, various chat app like WeChat, WhatsApp and social media app, e.g., Twitter, Facebook, Linkedin.

In early July, a great number of Chinese tio2 producers have sold out their output of the month. Those who announced price increase are negotiating orders of Aug but without a strong wave of price inflation it will be impractical. Firewood has been piled up and the market is waiting for a real ignition.

Panzhihua Haifengxin has developed a range of tio2 pigment which is client-oriented and aiming to address customer needs in the fields of coating, ink, plastic, paper, and so on.

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