On February 15, chemours held the 2022 annual financial statement meeting. Mr. Mark Newman, CEO, said that the company's Titanium Dioxide sales volume in 2023 was expected to be lower than the level in 2022, expressing concern about the downstream demand market for titanium dioxide.
The pessimistic prediction of titanium dioxide in 2023 is also fermenting in China. Although before and after the Spring Festival, most of China's titanium dioxide manufacturers announced price increases, raising the price of products sold in China by 800-1000 yuan/ton, and increasing the price of export products by 150 dollars/ton. However, according to the market transaction status tracked by the Institute of Chemical and Plastic Research, the current prices of anatase, rutile and chlorinated rutile mainstream titanium dioxide have not fluctuated significantly, and the transaction price is stable.
From the perspective of supply side, in 2022, the output of titanium dioxide of 41 full-process enterprises in China's titanium dioxide industry achieved another good performance. The total output of rutile and anatase titanium dioxide and other related products produced by the industry reached 3.861 million tons, an increase of 71000 tons or 1.87% year on year. LB Group is the main enterprise with a large increase in titanium dioxide output, with an increase of 11%. The output of CNNC titanium dioxide and Pangang increased by 2%. This year's new production enterprises CITIC Titanium, Tianyuan, Shengwei Fuquan and Xianghai have increased significantly compared with last year's output. The output of more than 20 small and medium-sized enterprises in the market has decreased by different degrees compared with last year.
The average industry operating rate in 2022 was 73%, 7 percentage points lower than that in 2021. The operating rate in January 2023 was only 68%, lower than that in 2022 and the same period in 2021.
This year, Yunnan, Hunan, Gansu, Guizhou, Liaoning, Hubei, Inner Mongolia and other regions will have new titanium dioxide production capacity. It is estimated that about 600000 tons of new production capacity will be released throughout the year. According to the capacity planning, it is estimated that after 2024, there will be about 600000 tons of expansion and new projects. In the 2023-2024 cycle, the supply and demand balance of titanium dioxide in China will be broken, and the oversupply situation will become more obvious in the next two years.
On the demand side, as the raw material of architectural coatings, the demand for titanium dioxide in the second half of 2022 is directly related to the downturn of the real estate industry. Industry data shows that in 2022, the new construction area of real estate has been in a negative state. The construction area was affected by the repeated epidemic in April and May. The construction area was significantly reduced in the off-season of the traditional industry in July and August. The peak season in September was not prosperous, and the demand recovery was less than expected. The downstream coating industry was affected by the downturn of the real estate industry. In addition, the paint industry data shows that the composite growth rate of the architectural paint industry from 2020 to 2022 is -1.68%, which is in a shrinking state. Since November 2022, the state has issued relevant real estate policies, and the credit, debt financing and equity financing of real estate enterprises have been relaxed.
Although the demand for plastic Color Masterbatch, ink and cosmetics has increased to some extent, the demand share is relatively low and will not have a decisive impact on the newly released capacity.
In terms of import and export, China's titanium dioxide exports totaled 4105900 tons from January to December 2022, up 7.17% year on year. Facing the stage of oversupply, titanium dioxide enterprises will continue to accelerate the pace of export in this cycle. It is expected that China's titanium dioxide exports will maintain a stable growth trend in 2023.
