Panzhihua environmental events continue to ferment the domestic titanium dioxide industry chain supply shocks

In December 2nd, environmental pollution caused by the Panzhihua high tech Zone companies waste vanadium titanium industrial wastewater, to Jinsha River, is CCTV financial channel “economic half-hour” column exposure. In December 3rd by the party members of the provincial Environmental Protection Office LED inspection teams went to Panzhihua to urge the rectification. In December 4th, a joint investigation team (the provincial Environmental Protection Office of Panzhihua municipal government and the enterprises in the park) one by one, to date, has been discontinued rectification enterprise 28, filing 30, issued the penalty decision 16, 5 cases

transferred to public security organs, administrative detention of 2 people. Inspection teams also asked, Panzhihua City, a comprehensive sort of environmental issues, to carry out a large investigation, major renovation, the development of practical solutions and clear time limit, a deadline for rectification. We believe that this environmental events on the supply side of titanium concentrate titanium dioxide industry chain caused great impact, in the current round of titanium dioxide in the background, the industry supply and demand pattern is expected to be further improved.

Panzhihua area is the domestic titanium concentrate – titanium dioxide industry chain production center: Panzhihua area has a capacity of 4 million 140 thousand tons of titanium concentrate, titanium dioxide production capacity of 590 thousand tons and 582 thousand tons of titanium slag production accounted for 57.52% of the proportion of the national capacity, 15% and 29%. April vanadium titanium dioxide production capacity of High-tech Zone environmental impact of this event are production of 30 thousand tons, taking into account the domestic monthly output of 10-20 million tons, accounting for more than 15%, short-term supply shocks larger. Currently under the information is expected to stop the grassroots research will be maintained for more than a month, taking into account the Spring Festival, we believe that this pattern is expected to continue to supply and demand in the first quarter of next year. Taking into account the beginning of the Spring Festival, the traditional peak season, the downstream demand is expected to be further supported.

Overseas demand recovery capacity is the main reason for shutting down the superposition of domestic exports significantly improved: American and European real estate industry brought great recovery of titanium dioxide overseas demand improved, and high cost of overseas titanium dioxide production capacity shut down also caused some of the supply gap, the overseas giant titanium dioxide since last year has repeatedly raised the price and quarter operating rate enhance have confirmed this demand improvement. More than two factors also led to a substantial increase in domestic exports, 2016 1-10 month titanium dioxide close to 600 thousand tons, the annual rate of about more than 700 thousand tons, a record high of nearly a few years.

After a period of driving real estate industry continues to improve demand off-season: in 2016 the domestic real estate industry in the first half year to improve greatly, as the real estate cycle after the standard benefit of the industry, titanium dioxide showed marginal improvement in the second half of the domestic demand, it also brings the off-season. Taking into account the real estate industry and the lag phase of titanium dioxide demand, the domestic demand for titanium dioxide next year is expected to maintain rigid growth.