China's titanium dioxide industry is highly dependent on the export market, under the influence of anti-dumping, it is expected that in the short term there will be a competitive situation in which supply exceeds demand, but in the long term, it is expected to maintain its competitiveness in the international market by virtue of its technological and cost advantages.

1. The global titanium dioxide industry has a high degree of concentration, the head of the enterprise has a strong voice

By the end of 2023, the total global titanium dioxide production capacity was about 9.4 million tons/year, with a relatively concentrated distribution, of which, China's production capacity was 5.2 million tons/year, accounting for 55% of the world's capacity; the U.S. titanium dioxide production capacity of 1.36 million tons/year ranked the second, and the production capacity of other countries and regions was relatively small. Global titanium dioxide leading enterprise Connoisseur expects that the industry is unlikely to have further large-scale capacity increase, and in the foreseeable future, Europe or North America is unlikely to build new titanium dioxide plants.

In terms of the competitive landscape of enterprises, the global titanium dioxide industry has a high degree of concentration, with the CR5 (the share of production capacity of the top five enterprises) at approximately 50%. The head enterprises have strong control over the global supply of titanium dioxide and are able to exert significant influence on product prices and market trends. In recent years, affected by factors such as aging equipment, high costs and environmental protection, the production capacity of some overseas head enterprises has been withdrawn, such as Panento gave up rebuilding its production capacity after the fire at its Pori plant in Poland in 2017, and announced the permanent shutdown of its Scarlino plant in Italy and its Duisburg plant in Germany (with a combined sulphuric acid-method titanium dioxide production capacity of 130,000 tons/year) in March 2023, and the In October 2023, the company announced bankruptcy and reorganization; Connoisseur closed 35,000 tons/year sulfate method titanium dioxide production line located in Leverkusen plant in Germany in 2021; and Como in the United States closed 150,000 tons/year chloride method titanium dioxide plant in Taiwan, China in July 2023.

In terms of demand, the titanium dioxide market is affected by a variety of factors, including macroeconomic conditions, demand from downstream industries, raw material costs and international trade policies, etc. Its market demand is closely related to the GDP and general economic conditions of markets in various regions around the world. In the long term, the market demand for titanium dioxide will grow at a rate of 2.5% per year, with a global demand of approximately 6.8 million tons in 2023, of which approximately 60% is for high performance pigments. Global demand is expected to increase slightly in 2024 compared to 2023.

2. China's titanium dioxide market concentration is high, there are still more new production capacity plans in the future

China's titanium dioxide production capacity has been growing at a high speed in recent years. In 2023, there are 42 full-flow type producers with normal production conditions in the national titanium dioxide industry, with a total production capacity of 5.2 million tons/year, and a total output of 4.16 million tons, of which 3.6 million tons are rutile-type products, 420,000 tons are anatase-type products, and 140,000 tons are nonpigment-grade and other products, with an average capacity utilization rate of 80% in the industry. From the process point of view, there are 2 pure chlorination process, 3 with both sulfuric acid process and chlorination process, and the remaining 37 are pure sulfuric acid process.

There are still more new production capacity plans in the future, according to the existing planning project statistics, it is expected that in the next 2-3 years, China's total titanium dioxide production capacity increased to at least 7 million tons / year or so, accounting for 2/3 of the total global production capacity.

With the completion of production expansion projects around the production, the number of Chinese titanium dioxide producers continue to increase. However, most of the current enterprise product quality is similar, low-end surplus, high-end insufficient. In this case, the state intensively introduced a series of industrial policies. 2023 July, the Development and Reform Commission and other five ministries issued “key industrial areas of energy efficiency benchmark level and benchmark level (2023 version)”, in which titanium dioxide is included in the strict control of the industry, the elimination of backward production capacity needs to be completed by the end of 2026, do not meet the standards on the elimination of exit. 2023 December, the Development and Reform Commission announced “industrial structure adjustment Guidance Catalog (2024 this year)”, the chlorination method of titanium dioxide from the encouragement category removed.

From the consumption point of view, titanium dioxide is mainly used in coatings, plastics, paper, ink and daily chemicals, etc. China's apparent consumption of titanium dioxide in 2023 was about 2.5 million tons, basically the same as in 2022. Per capita consumption is 1.86 kilograms, about 55% of the per capita level in developed countries. At present, China's economy has entered a period of medium and low-speed development, and the effect of relying on domestic demand to boost the titanium dioxide market in the short term is very limited. In recent years, the international market is one of the pillar markets of China's titanium dioxide, and the annual export volume basically accounts for more than 1/3 of the production. It is expected that in 2024, the new housing sales market will still face downward pressure, the domestic titanium dioxide market will run under pressure, and the EU anti-dumping will have certain pressure on China's titanium dioxide industry.

3.Multi-region anti-dumping investigation launched against Chinese titanium dioxide products

China's total titanium dioxide exports increased from 1 million tons in 2019 to 1.64 million tons in 2023, with an average annual growth rate of 13%. Among them, the share of Asia generally remains at about 55%, and the share of Europe and South America is about 20% and 10% respectively.

From the titanium dioxide export countries, emerging and developing countries play an important role in driving China's titanium dioxide exports continue to grow, India, Brazil, Turkey, the United Arab Emirates and other countries with a compound annual growth rate higher than the average level, Vietnam, Indonesia, Malaysia and other countries growing faster.

With the elevation of China's titanium dioxide industry in the global market, many places overseas began to use anti-dumping measures to raise trade barriers.2023, Europe launched an anti-dumping investigation into Chinese titanium dioxide products, aiming to protect EU titanium dioxide producers. The European Commission announced the launch of the investigation on November 13, 2023, which covered the period from October 2022 to September 2023, with a backdating to 2020 for damage assessment. The investigation claimed that China's titanium dioxide entered the European market with a dumping margin of 45% to 65%, leading to serious challenges for local producers and even production stoppages, thus increasing the EU's dependence on external sources of key raw materials.2024 On July 11, 2024, the European Commission issued a public notice of its preliminary anti-dumping decision on titanium dioxide originating from China, and proposed to make a preliminary anti-dumping decision on Lonbest Group, China Nuclear Titanium White, and China Nuclear Titanium White, respectively. and China Nuclear Titanium White proposed to impose provisional anti-dumping duties of 39.7% and 14.4%, respectively, and provisional anti-dumping duties of 35% to 39.7% on other companies (including Jinan Yuxing, Guangxi Dahua, etc.).

In addition to the EU, India and Brazil have also recently launched anti-dumping investigations into Chinese titanium dioxide. on March 28, 2024, India's Ministry of Commerce and Industry issued a notice stating that, in response to an application filed by three major manufacturers of titanium dioxide in India, it had launched an anti-dumping investigation into titanium dioxide originating from or imported into China. on April 30, 2024, Brazil issued its Notice No. 15 of 2024 stating that, in response to the application filed by one of its major domestic manufacturers, the Ministry of Commerce and Industry had launched an anti-dumping investigation into titanium dioxide originating from or imported into China. application filed by a major producer of titanium dioxide, an anti-dumping investigation was initiated against rutile titanium dioxide originating in China, the product in question being rutile titanium dioxide pigments.

Anti-dumping simply combines the price and profitability of a product, singularly targeting the product's foreign competitors, and interfering by means of tough tariff policies to stop the inflow of non-local products. The EU imposed tariffs ostensibly to protect the profits of local titanium dioxide manufacturers, but in fact, the deterioration of the local economic environment has weakened the competitiveness of local products in the international market, the real cause of the high cost of titanium dioxide in the European region is the high price of energy, the continuous rise in prices, the ever-increasing labor costs, shipping costs and exchange rate fluctuations in a number of areas.

4. Point of view

China's titanium dioxide industry by the impact of anti-dumping measures can not be ignored, the follow-up if the anti-dumping events can not be reversed, the competitiveness of domestic titanium dioxide enterprises in Europe and other international markets will be weakened. However, it is expected that the domestic leading titanium dioxide enterprises will not tighten production capacity but choose to develop other overseas markets, the competition will be more intense.

For chlorinated titanium dioxide producers, if they master the technology of smelting high titanium slag from low-grade mines, they can avoid the use of higher-priced synthetic rutile raw materials in the chlorination process. Whether the product can meet the quality requirements of high-priced applications is also key.

Overall, for China's titanium dioxide manufacturers, they need to actively respond to litigation to defend their interests, but also need to increase the development of other markets. More importantly, it should accelerate technological innovation, improve product quality, and enhance competitiveness in the international market with hard power. In the short term, the EU's anti-dumping duties directly affect the export of Chinese titanium dioxide, but in the long term, with technological innovation and cost control capabilities, domestic enterprises will remain competitive in the international market. At the same time, China's titanium dioxide industry is accelerating the elimination of backward production capacity within the industry, to encourage the merger and reorganization of advanced production capacity, to control the trend of rapid growth in production capacity, and to enhance the international competitiveness of the industry as a whole.