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Titanium dioxide is closely related to economic development A white pigment cannot be replaced

2015.11.23   09:42

Titanium dioxide is a kind of crystal powder with high refractive index, so far, titanium dioxide is one of the strongest tinting strength in white pigment irreplaceable white pigment, it has good covering power and color fastness, suitable for opaque white products. Especially suitable for outdoor use rutile type of plastic, architectural coatings and other products, can give good light stability. Sharp titanium type is mainly used for indoor use products. Titanium dioxide is widely used in paint, paper, rubber, plastic, enamel, glass, cosmetics, paint, printing ink, watercolor and paints can also be used for metallurgy, radio, electrode, etc. Ubiquitous application, means that global demand trend of the titanium dioxide is closely related to the world's economic production.

Because of the characteristics of titanium dioxide and irreplaceability, China in a few short years from a major net importer titanium dioxide into exporter. Rapid development in the world economy, the shortage of titanium white led to a price surge and the excess profit, and titanium dioxide in 2012 caused huge amounts of inventory and prices and profits both collapse. The global financial crisis and China's explosive growth and aggravate the titanium pigment production capacity, industry's rise and fall, today's titanium dioxide industry entered the era of meager profit.

According to the IMF estimates, the global economic growth will increase from 3% in 2013 to 3.6%, without any major destructive events, is expected to maintain steady development.

Recently, the north American market continues to recover, the main powder coatings manufacturers, such as PPG, sherwin-williams and akzo Nobel report sales growth. The United States remains the world's most dynamic economies, which embodied in it has become a pioneer in the field of shale gas, can realize low energy cost, the restructuring of the auto industry and has the world's most widely distributed civilian high-tech industries.

China's economy has been for exports and investment driven, occupy a high proportion in household wealth of real estate, the overall price adjustment to make markets return to normal state, relying on domestic consumption of economic structure is gradually formed.

According to the bureau of statistics latest data show: September CPI rose 1.6%, or return to 1 times. China September CPI 1.6% year-on-year, 1.8%, 2.0% before. China September PPI-5.9% over the previous year, 43 consecutive months of decline, expected to 5.9%, 5.9% before. From the year-on-year CPI in September than last month fell 0.4% year-on-year, the main reason is the high base of comparison.

At present, the global value chain market is not out of the cycle. Chain, continue to lower prices, capacity utilization still remain low, in the second quarter of 2015, huntsman, pigments and additives business department adjusted interest tax, depreciation and amortisation (Ebitda) fell 56% year on year, his company's titanium dioxide business profits fell 71% year-on-year, for company's titanium technology business profits fell 55% year on year.

As things stand, the big three in the third quarter's performance is still optimistic. Huntsman statement released in November already warning: titanium dioxide prices fall, fall is bigger, especially North America led to the company's performance in the third quarter fell. The company is also clear to shareholders at the same time, will spin off before the end of 2016 pigments and additives business. And the same time, the company will be in the fourth quarter bonuses slashed to 3 cents per share, than in the third quarter plunged nearly 95% of share out bonus of 55 cents per share.

China titanium dioxide to grow, to expand the capacity of the first two years of making titanium pigment prices for nearly three years is restrained, especially this year decline in demand in the domestic market environment, the economic downward pressure on severe situation, is now facing losses to more than ten years since the lowest price, the industry analysis: should be the bottom of the stabilization time.

China titanium dioxide since in recent years, quickly recognised by the world market, mainly the price advantage to Chinese suppliers, such akzo Nobel and Nippon, PPG, etc have stable raw material supply source of super large enterprises, has increased the titanium pigment in China procurement share, as part of the strategy of diversifying. The export of Chinese titanium dioxide is replacing the traditional sources of supply, in mature markets and win the largest share in emerging markets.

Under the condition of the world economic recovery is weak, although the U.S. economy to benefit the world currency, the recovery is good, but the chemicals market lower, with most chemical products price weakness, from the point of monitoring data, market demand is not prosperous, weak chemical products prices, most of them still in the adjustment process of the bottom. Because of the weak market in recent years, huntsman at the end of 2014 announced plans to cut 900 jobs in titanium dioxide pigments and additives business department, this is part of the restructuring plan, the company aims to save $175 million a year before mid 2016. Including plans for major job cuts in duisburg, Germany, the factory cut 360 jobs, to Germany dingen factory cut 160 jobs, to add to factory to cut 160 jobs in France. French Calais factories are shut down, will cut titanium white production capacity of 100000 tons/year.

After the market adjustment, the supply of global value chain or more stable, this will probably lead to the moderate increase in prices. Despite the positive factors of market recovery, but the peak of China's growth and the eurozone crisis, will increase the uncertainty of the industry development.

However, titanium dioxide global demand trend is closely related to the world's economic production union, which cannot be ignored is the importance of his company's chairman and CEO Thomas k in the company's second-quarter results said on a conference call, titanium dioxide prices fell by 5% in the second quarter, the market supply continues to outpace demand, the current sales price has not been paid off. However, he still optimistic about the prospects for titanium pigment market. He said: "in 2015, is the years of the transition of titanium dioxide business, in the second quarter we continue to face challenges, these challenges in the third quarter is expected to continue to exist. However, the industry's response to this dilemma speed is faster than in the past a lot, to adapt to the weak demand dilemma caused by China's economy is cooling."

According to the research report released HassanAhmed titanium dioxide currently downstream customers of the stock may have fallen to below the normal level, the global value chain of the inventory is quickly close to normal. According to industry analysis, inventory is high titanium pigment production enterprises in China, and the downstream unreasonable "zero" inventory and social inventory slants small, under the global climate adjustment, our inventory restocking moment will coming soon.

By Nicole

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