2014 is approaching,
but the domestic TiO2 market is likely to remain in poor condition. The
domestic rutile TiO2 price has declined by about 23% since July 2012 and most
domestic producers have suffered a loss in 2013. Factors for the poor condition
include the oversupply in domestic TiO2 market, the slowdown of China's economy
which has caused the domestic TiO2 demand to decline, and the fragile economic
recovery in Europe and the U.S that has resulted in soft TiO2 exports,
according to Titanium
China Monthly Report issued by
CCM in
December.
However, some domestic producers have
increased their production capacity without regard for the current sluggish
condition. This may be a wise strategy if the demand for TiO2 picks up in the
future, but is full of risks.
Panzhihua Dongfang Titanium Industry Co.,
Ltd. (Dongfang Titanium), a subsidiary of Pangang Group, is reported to be
planning to launch the pilot production for its second phase rutile TiO2
project with an additional production capacity of 60,000t/a in Dec. 2013. The
first phase project, with a production capacity of 40,000t/a, was put into operation
in 2009. The construction of the second phase project began in 2012, and still
needs another investment of USD105.86 million (RMB650 million). The second
phase production line is expected to be put into operation in June 2014 and
will lift up Pangang Group's TiO2 production capacity to more than 120,000t/a.
CNNC Hua Yuan Titanium Dioxide Co., Ltd.
(CNNC Titanium) also announced that it will raise about USD35.94 million
(RMB220.70 million) for the technical reform project of Jinxing Titanium's
existing 100,000t/a TiO2 after-treatment production plant and USD23.57
(RMB144.70 million) for the technical project of Wuxi Haopu's existing
50,000t/a rutile TiO2 fine-finishing production plant. CNNC Titanium was
reverse merged by Jinxing Titanium in Jan. 2013. After the backdoor listing,
CNNC Titanium's TiO2 production capacity has reached 100,000t/a. At the same
time, CNNC Titanium claimed that Jinxing Titanium's after-treatment capacity
will reach 200,000t/a and Wuxi Haopu's fine-finishing production capacity will
reach 100,000t/a after the technical reform.
In late Nov. 2013, another listed
company—Jilin GPRO Titanium Industry Co., Ltd. (GPRO Titanium) also plans to
raise about USD142.38 million (RMB874.21 million) to construct its 80,000t/a
TiO2 project. GPRO Titanium succeeded in its backdoor listing on July 26, 2013,
and currently has a TiO2 production capacity of 45,000t/a in operation (please
refer to GPRO Titanium succeeds in backdoor listing and starts trading since
July 26, 2013 in Titanium Dioxide China Monthly Report 1308 for more details).
The construction of the 80,000t/a TiO2 project began in Dec. 2012 and is
projected to be completed in H2 2015. The plant will operate at 80% capacity
after one year of operation.
Whether increasing the production capacity is
wise still remains uncertain. However, listed companies can easily raise
capital from the stock market to support an increase in production capacity.
Under the existing stock market rules, most private investors who subscribe to
non-public offering shares can easily profit by selling the shares to public
stock market investors at a much higher price.
This phenomenon leads private investors to
flock to listed companies' non-public offering shares, ignoring the
fund-raising projects' profitability and any concerns about raising capital
regardless of the market. As a result, listed companies have more opportunities
to expand their production capacity than non-public companies when the market
is declining. Therefore, listed
companies can attempt to expand and gain a greater market share with a
mitigated risk of incurring a potential loss, while private investors can
access the company and attempt to profit through the stock market.
TiO2 import price declined slightly while the
export price enjoyed a rare increase in Oct.
Titanium feedstock imports returned to normal
while domestic production increased significantly
Domestic TiO2 price declined massively from
mid-Nov. to mid-Dec.
TiO2 companies expand despite the market
downturn
Domestic TiO2 price likely to keep steady in
2014
Luohe Xingmao starts the bidding on its
second phase of chloride process TiO2 project
Tianyuan Group to enter the titanium industry
for new growth point
Capchem plans to acquire Supe Chemical's
56.92% equities
Domestic automobile output is expected to
reach 22 million units in 2013
Zhejiang Transfar to acquire Transfar
Coating's 100% equity
Titanium
Dioxide China Monthly Report,
issued by CCM on 25th, is mainly
comprised of five columns of news and reports related to TiO2 market, including
“Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price
Update”. You can find out more business opportunities through the latest and
helpful information provided in the report.
CCM is
dedicated to market research in China, Asia-Pacific Rim and
global market. With a staff of more than 150
dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters,
Buyer-Trader Information, Import/Export Analysis, and Consultancy
Service.
Guangzhou CCM Information Science
& Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
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