China’s Titanium Sponge Exports Surge While Imports Decline in 2023

Titanium Sponge

China’s Titanium sponge exports saw a significant increase during January-September 2023, driven by heightened demand from countries like the United States, Japan, and South Korea amid the ongoing Russia-Ukraine conflict. However, imports into China decreased due to ample domestic availability and declining local prices, which remained highly competitive compared to international markets.

Export Trends: Rising Demand from the U.S. and Japan

During the first nine months of 2023, China exported 4,362 tons of Titanium sponge, reflecting a 24% increase compared to the 3,516 tons shipped during the same period in 2022, according to customs data. This surge was largely fueled by reduced global spot supplies following the start of the Russia-Ukraine conflict in February 2022. Russia and Ukraine are significant producers of Titanium sponge, alongside other nations such as Kazakhstan, Saudi Arabia, and Japan.

In September 2023, exports totaled 567 tons, a 38% rise from the 411 tons shipped in September 2022. However, this was a 24% decline from the 744 tons exported in August. Key export destinations included Japan (224 tons), the United States (100 tons), and Sweden (60 tons). A notable contract by a Yunnan-based producer to supply 1,000 tons of 99.7% sponge to a U.S. buyer, with shipments scheduled for May 2025, highlights China’s growing footprint in the global Titanium sponge market.

Import Decline: Sufficient Domestic Supply and Competitive Pricing

China’s Titanium sponge imports fell by 25%, with only 100.4 tons brought in during January-September 2023, compared to 133.7 tons in the same period in 2022. The decline is attributed to adequate domestic availability and weaker prices in the local market. The average price for 99.7% grade Titanium sponge in China during the period was ¥50,712 per ton (approximately $7.10 per kg), significantly lower than the European average of $11.45 per kg.

Domestic Market Stability Amid Thinner Margins

Despite rising exports, China’s domestic Titanium sponge market remains stable, though profit margins have thinned, with some producers operating at a loss. Prices for 99.7% grade sponge as of early November were assessed at ¥43,000-44,000 per ton ex-works, the lowest levels since February 2016. Similarly, 99.6% grade sponge was priced at ¥42,000-43,000 per ton ex-works.

Producers in regions such as Panzhihua have also shifted focus to export markets, including India and Europe, to compensate for declining domestic profitability. Notably, the continued suspension of production by Ukraine’s Zaporozhe Titanium and Magnesium (ZTMC) since February 2022 has further solidified China’s position as a key supplier to international markets.

Outlook: Competitive Advantage Amid Global Supply Constraints

China’s robust export growth underscores its critical role in the global Titanium sponge market, especially in light of supply disruptions caused by geopolitical factors. Competitive pricing and stable domestic production ensure that China remains a leading supplier, even as other producers face challenges in meeting global demand.