China's TiO2 Output Faces Decline Amid Weak Demand, Profit Pressures

TiO2

China's titanium dioxide (TiO2) production is set to decrease during the January-February off-season. This decline stems from reduced demand and shrinking profit margins. Producers are adjusting by cutting or halting output.

Market Pressures and Production Adjustments

TiO2 prices have hit a four-year low, with 93pc rutile grade assessed at Yn13,400-14,700/t ex-works on January 14. This marks a 14pc drop since May 2024. The price decline is attributed to lower downstream demand and increased production following capacity expansions. China's TiO2 capacity reached 6.35mn t/yr in 2024. Producers are now planning maintenance shutdowns ahead of the Lunar New Year holiday. This is in response to weak demand from painting, plastics, paper, and printing ink sectors. Rising concentrate feedstock costs further squeeze profit margins. For example, a Guangxi-based producer will suspend production from January 22 to February 6 for equipment maintenance. This will result in an estimated output loss of 6,000t.

Concentrate Prices and Geopolitical Factors

46pc grade concentrate prices ended a downtrend in early September, rising to Yn1,980-2,000/t ex-works on January 14. This rise is due to reduced medium-grade ore supplies from state-controlled producer Pangang. Small and medium-sized producers face increased losses due to higher concentrate and sulfuric acid costs. Additionally, geopolitical pressures are impacting the market. The European Commission (EC) imposed definitive anti-dumping duties on TiO2 imports from China. These duties range from €0.25/kg to €0.74/kg and will be valid for five years. This has led to a reduction in exports to Europe. A Shandong-based producer has stopped exports to European buyers since July 2024. A Nanjing producer has been operating at a loss since October 2024 due to weak domestic and overseas demand.