Panzhihua Titanium Sea Technology has issued a price adjustment letter, which is the thirteenth titanium dioxide enterprise in the eighth wave of price increases for titanium dioxide; It has been nearly two weeks since Guangdong Huiyun Titanium Industry announced a price increase on July 5th. From being eager to take action to consolidating the price increase trend and approaching the end, after this price adjustment, the average price of rutile titanium dioxide has reached nearly 13000 yuan/ton. At present, the thirteen companies that have raised their prices have captured large, medium and small enterprises in the industry, including leading Sichuan Longmang, as well as small enterprises in Panzhihua and Guangxi regions. The production capacity of the companies that have raised their prices is nearly 1.4 million tons, accounting for nearly 40% of the national production capacity. In the future, more and more companies are expected to raise their prices.

The strong driving force behind the price increase of titanium dioxide in 2016 cannot be separated from the main theme of "reducing production capacity". In the darkest days of titanium dioxide, voluntary and involuntary capacity reduction was a prerequisite for the significant price increase in 2016. Voluntary capacity reduction came from the operational pressure of enterprises, while involuntary capacity reduction mainly arose from environmental protection, overcapacity, and other issues. In response to this, national policies also intend to guide enterprises. During the 13th Five Year Plan period, the titanium dioxide industry will implement the "three reductions, one reduction, and one supplement" policy, reducing production capacity, inventory, leverage, reducing costs, and making up for shortcomings, dealing with "zombie enterprises", and promoting the resolution of overcapacity. It can be foreseen that low-end backward production capacity will be completely withdrawn. If we continue to maintain this main tone, the price of titanium dioxide will become more stable.

At present, the operating rate of the domestic titanium dioxide market is around 70%, an increase of 1.58% compared to last week. Among them, the construction of enterprises in Shandong and South China has increased compared to the previous period, by 6.06% and 4.18% respectively, while the construction in other regions is relatively stable. The company also stated that inventory pressure is not high, but the problem of limited downstream demand is still difficult to solve, mainly due to limited new orders. Due to significant price increases, dealers are under considerable pressure, and the new prices are often difficult for downstream customers to accept. Traders still face difficulties in implementing the new prices. At the same time, the price increase has also boosted the pattern of upstream and downstream markets. The downstream titanium dioxide market continues to rise, and titanium ore merchants are eager for a price increase. The inquiry atmosphere has become slightly more active, and the titanium ore market has a prominent mentality of raising prices. The cost side has also supported the price increase of titanium dioxide.

The macro economy is still in a stable state. In June, the manufacturing PMI was 50.0%, a slight decrease of 0.1 percentage points from the previous month, at a critical point, with the construction industry closely related to titanium dioxide maintaining rapid growth. The business activity index and new order index were 62.0% and 58.8%, respectively, up 2.6 and 6.7 percentage points from last month, both reaching new highs this year. Among them, the business activity index and new order index of the housing construction industry and civil engineering construction industry are both in a relatively prosperous range, with increased market demand in the construction industry, further active production and operation activities, and enhanced expansion momentum. According to existing economic data, the titanium dioxide industry still has confidence in price increases.

The price of titanium dioxide is still within a reasonable range under the current policies and market environment. Due to the fact that there will not be significant fluctuations in future supply and demand changes, the driving force for market price increases may come from the willingness of enterprises and the dividends of policies. It remains to be seen how much space there is for titanium dioxide after 13000 yuan/ton.