No one can stop the price increase, what’s the trend of coating industry of 2017

There are three reasons for the increase.

1)      Raw materials, artificial rise, business costs increased;

2)      The state introduced the highway "three limit" policy, so the packaging, logistics costs increased;

3)      The government shut down the enterprises that do not meet the environmental protection standard, the upstream supply of household, home appliance supply becomes very tigh. The three factors work together that no one can do anything to stop it.

But look at the three force, some factors will be like the wind blows over, some will become the new norm to improve the industry threshold, while others are terrible unbalance of supply and demand rising trend caused by the price of the most impressive to the number in 2016 rose to double the sponge, rose a new height, up CCTV. Looking back, the sponge can rise so much, there are several main factors superimposed: the first country to start under heavy regulation of chemical pollution enterprises, a large number of substandard sponge upstream chemical enterprises rectification or even closed, plus TDI (mainly sponge chemical raw materials) to reduce the supply of the international market, the total global production capacity of about 2 million 740 thousand tons / year, a net reduction of 22 thousand tons / year, domestic production capacity of 840 thousand tons / year, nearly two years without new capacity. The supply in the face of the building materials industry rose sponge in 2016 won the title of crown. 2017, the price of sponge is still hovering high, the new breed is poised to rise crown. Raw materials rose sharply, world-class giants teamed up to raise prices, environmental pressures, domestic production, supply and demand imbalance...... these are almost always rises a replica of the sponge, the main raw material is titanium dioxide coating on again.

World giant companies raise prices

The latest news, February 21st, Huntsman, Chemours, Koster three titanium dioxide world giants, announced to raise prices of titanium dioxide products sales since March 1st. In addition, a number of domestic manufacturers also raised the price of titanium dioxide about 700 yuan per ton, an increase of $100 per ton of international customers. Domestic titanium dioxide prices from the beginning of 14913 yuan / ton rose to 16940/ tons, rose more than 2000 yuan per ton, or nearly 13.6%. If you count as nearly three months of gains as high as 20%. A reporter for the billions (002601), annada (002136), Gimpo titanium (000545), nuclear titanium dioxide (002145) of four listed companies in the product price adjustment notice after carding found: in 2016 a total of 13 times raised billions of titanium dioxide prices, annada raised 12 times, 8 times increase in nuclear titanium dioxide, Gimpo titanium about 10 times or so.

Zhongyuan Securities believes that the main reason for the price increase of titanium dioxide is like the TDI , which is the raw materials of sponge, is due to the contraction of domestic and foreign titanium dioxide production capacity, and the improvement of the pattern of supply and demand.

The high yield of Titanium dioxide industry before the year of 2010 attracted a large number of manufacturers influx, capacity disorderly expansion, new capacity in 2012 to 2015 after the release, the price of titanium dioxide plummeted, the industry boom continued downward. The past two years, the Government continued to strengthen the supply side of the reform and environmental protection, in this round of adjustment, the domestic output capacity closed to 360,000 tons.

A research report said that in 2017 the annual titanium dioxide market will maintain the situation in the seller's market, titanium dioxide prices are expected to exceed 20 thousand yuan / ton, compared with the beginning of the price will rise by more than 30%. Titanium dioxide downstream industries involving paint, paper, ink, plastic, titanium dioxide prices will also affect the downstream industry products. Due to the use of more paint, this round of titanium dioxide prices increase has begun to lead to price increases of paint industry.

Northeast Securities believes that the high cost of environmental protection continued to continue to produce high pressure, social inventory is low, titanium dioxide prices are still strong driving force, the price adjustment of paint products may occur at any time.

In short, the price increase may not be able to solve the problem immediately, when the imbalance between supply and demand situation is difficult to break, perhaps the whole paint industry chain will rupture.

                                                                                                                     By Betty