Core view
1. Recently, several leading titanium dioxide enterprises in China raised the price of titanium dioxide products. Among them, the titanium dioxide of Tianyuan Group in the Chinese market is increased by 500 yuan / ton, and the products in the international market are increased by 100 dollars / ton Lb Group Co.Ltd(002601) chlorination titanium dioxide is increased by 700 yuan / ton, and sulfuric acid titanium dioxide is increased by 500 yuan / ton Cnnc Hua Yuan Titanium Dioxide Co.Ltd(002145) the titanium dioxide of various models in the Chinese market will be increased by 500 yuan / ton. Since 2021, the price of titanium dioxide has risen sharply and is still at an all-time high. As of May 20, 2022, the average market price of titanium dioxide in China was 19117 yuan / ton, an increase of 18% over the beginning of 2021. In terms of supply, the titanium dioxide industry is facing transformation and upgrading, with limited new production capacity in the short term in the future. The new production line of titanium chloride will be encouraged to exceed the production capacity limit of 30000 tons of titanium dioxide in 2019, which will be issued by the national development and Reform Commission. In 2021, the total production capacity of titanium dioxide in China was 4.511 million tons, with a year-on-year increase of 3.84%, significantly slower than the growth rate of 17.4% in 2019. In terms of demand, the demand for titanium dioxide in China has increased steadily, and the export volume has increased rapidly. From 2017 to 2021, China's apparent consumption of titanium dioxide increased from 2.259 million tons in 2017 to 2.555 million tons in 2021, with a compound annual growth rate of 3.1%. China's titanium dioxide exports increased from 831000 tons in 2017 to 1312000 tons in 2021, with an average annual compound growth rate of 12.1%. Secondly, the rising price of raw materials has played a supporting role in the high price of titanium dioxide. In terms of titanium ore, as of May 20, 2022, the average price of China's titanium ore market was reported as 2092 yuan / ton, an increase of 262 yuan / ton or 14.3% over the beginning of 2021. In terms of sulfur, as of May 20, 2022, the average price of China's sulfur market was reported to be 4085 yuan / ton, an increase of 3135 yuan / ton or 330% compared with the beginning of 2021. In addition, the current inventory is at a high level, but it has decreased by 21.7% compared with the beginning of April. As the epidemic situation in China eases and the demand for economic recovery increases, the inventory of titanium dioxide is expected to decline further. Overall, with the stimulation of China's real estate policy and the recovery of downstream economy, the demand for titanium dioxide increases, and the price is expected to rise further. At the same time, the new capacity on the supply side is limited, and the price of raw materials rises, which plays a supporting role in maintaining the high price of titanium dioxide.
2. As of May 20, 2022, China's chemical price index reported 5986 points, down 0.2% on a weekly basis. Chemical products were mixed, with monoammonium phosphate up 4.7% and ethylene down 5.7%. In terms of monoammonium phosphate, the reason for the price rise is that the overall output decreased slightly during the week, superimposed with strong downstream demand, which promoted the price rise of monoammonium phosphate. In terms of ethylene, the main reason for the price decline is that the off-season of the agricultural film industry is coming and the downstream demand is declining, resulting in the downward pressure on the price of ethylene.
3. Natural gas prices have risen sharply in the past week. As of May 20, 2022, the closing price of NYMEX natural gas continuous futures in the United States was reported at US $8.058/million BTU, up 5.7% this week. The main reasons for the sharp rise in natural gas prices are: the sanctions on Russian natural gas exports, the tight international natural gas supply, and the rise in temperature in the southern United States, which promote the rise in natural gas prices.
4. Market review. Last week, all 33 CITIC level III chemical sub industries rose or remained flat. Among them, fluorine chemical industry sector increased the most, with an increase of 12.1%; Soda ash increased by 11.8%; Rubber additives increased by 10.6%; Carbon fiber rose 10.1%. In terms of individual stocks, the top three weekly gains were Daqing Huake Company Limited(000985) , Guangdong Dazhi Environmental Protection Technology Incorporated Company(300530) , Jiangxi Black Cat Carbon Black Inc.Ltd(002068) , with weekly gains of 28.7%, 24% and 22.7% respectively; The top three weekly declines were Jiangsu Jingxue Insulation Technology Co.Ltd(301010) , Chengzhi Co.Ltd(000990) , Nanjing Red Sun Co.Ltd(000525) , with weekly declines of 21.8%, 9.2% and 7.4% respectively.
Investment advice
The price of titanium dioxide increases, the industry is expected to prosper, and relevant production enterprises may benefit, such as Lb Group Co.Ltd(002601) , Cnnc Hua Yuan Titanium Dioxide Co.Ltd(002145) , Tianyuan Group, etc.
Risk tips
The real estate demand is lower than expected, the safety and environmental protection policy is upgraded, and the epidemic situation in China is repeated.
