Titanium Dioxide China Monthly Report 1510 (12 issues per year)

Date: 2015-11

“In Aug. 2015, the international TiO2 market slumped rapidly and demand for TiO2 from downstream industries was insufficient. Both of imports and exports of TiO2 recorded MoM drops in China.
In Aug. 2015 in China, import price of ilmenite continued to climb up and the import volume dropped significantly, mainly because that the domestic TiO2 market was still depressed and most of the ilmenite imported from Africa was not declared at the customs in this month. Besides, domestic output of ilmenite remained its downward trend due to the sliding output of titanium concentrate from Sichuan Province.
In Oct. 2015, Chinese traditional peak season, market conditions for TiO2 were not improved, but the decline of TiO2 price did slow down and maintain stable at the end of the month. That’s mainly because TiO2 price fell sharply before and a further decline will be unacceptable for TiO2 manufacturers. Influenced by this, market prices of titanium products such as titanium slag and ilmenite also stopped falling and ilmenite price even presented slight increase.
On 15 Oct., 2015, CNNC TD revised its performance forecast for the first three quarters of 2015, showing that it may suffer losses instead of making profits. Entering Q3 2015, Chinese TiO2 market tumbled sharply and unexpectedly and CNNC TD has to revise its former forecast. Considering the unusual situation that Chinese TiO2 price dropped instead of increasing during the traditional peak season in Sept. and Oct., CCM holds a pessimistic attitude towards Chinese TiO2 companies’ profitability in Q3 201 5 and in the near future.
On 10 Oct., 2015, CNNC TD released an announcement, showing that it would deposit its idle raised funds of USD14.17 million (RMB90 million) into banks for three months. This reflects that CNNC TD bears little pressure from capital supply chain even though it is suffering from losses according to its latest Q1-Q3 2015 performance forecast. CCM believes that if CNNC TD maintains large amount of investment, it will be able to carry out its TiO2 production technology upgrading project smoothly by plan.
On 28 Sept., 2015, after about four months of stock suspension, Jilin GPRO announced its stock resumption and disclosed its private placement plan. It is raising USD629.87 million to march into the financial market. Currently in China, the TiO2 market is depressed and most of the TiO2 companies are suffering losses for a long time. Under such circumstances, Jilin GPRO gained profits by investing into the financial market. CCM believes that Jilin GPRO’s new private placement plan may attract more TiO2 companies to enter the financial market.
On 21 October, 2015, Pangang Vanadium Titanium announced to terminate the equity transaction of its subsidiary KML due to disagreement on assets valuation. After bringing in huge losses to Pangang Vanadium Titanium in 2014, KML will still encumber Pangang Vanadium Titanium’s performance in 2015. KML under construction has become a heavy burden for Pangan Vanadium Titanium, which is difficult to detach from.
In H2 2015, Chinese TiO2 market tumbled and so did its upstream industry, the titanium slag industry. Impacted by problems such as severe overcapacity, dispersed capacity distribution and backward production techniques, China’s titanium slag industry has already fallen to its bottom.
Since Jan. 2015, China’s depressed titanium sponge market has been rebounding, with both market price and operating rate increasing continuously. However, the demand-supply relationship of titanium sponge in the domestic market lost its balance again in Sept. and Oct., because output was increasing while demand from downstream markets and export markets kept sluggish. Afterwards, market price of titanium sponge fell too.
On 15 Oct., 2015, PPG, an international coating tycoon, released its Q3 2015 report, showing that its net income from continuing operations in the quarter has established a new third quarter record for the company, mainly thanks to continued benefit of their acquisitions, including consistently strong performance of Comex. Besides, PPG held a positive attitude towards its Q4 performance.”


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