Left hand price increase notice, right hand maintenance order: The truth behind the "Hunger Games" in the titanium dioxide industry.
Recently, the titanium dioxide industry is indeed staging an intriguing "double act": on one hand, there are frequent announcements of price increases, while on the other hand, multiple companies are simultaneously suspending production for maintenance. Why, in the context of high prices for titanium concentrate and sulfuric acid, as well as repeated price hikes for titanium dioxide, is the industry choosing to "brake against the trend"?
Behind this seemingly contradictory logic lies the precise weighing of costs, market, and policy pressures by enterprises. The Color Masterbatch Industry Network will take you deep into the analysis, unveiling the truth behind this industry puzzle.
I. Cost Squeeze: The Survival Paradox Amid Rising Prices
The core costs of titanium dioxide production come from titanium concentrate and sulfuric acid. In 2024, sulfuric acid prices are running at high levels, and since the beginning of 2025, titanium concentrate prices have been soaring, directly increasing the production costs of titanium dioxide.
However, despite multiple price increases for titanium dioxide, it is still difficult to cover the rising costs. Taking sulfate process titanium dioxide as an example, the production costs are comprised of over 50% titanium concentrate and sulfuric acid, while the industry average profit margin in 2024 is less than 5%. This "scissors difference" where the cost increase outpaces the selling price forces companies to reduce costs and increase efficiency through non-market means.
Case evidence: A medium-sized titanium dioxide company has calculated that if it operates at full capacity, it will incur a loss of over 200 yuan per ton of titanium dioxide; however, if it reduces production by 30% and optimizes its processes, the loss can be narrowed to within 50 yuan.
Suspending production for maintenance has become a reluctant choice to stem the losses.
On the surface, the titanium dioxide market is in short supply.
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Demand side: The paint and plastics industries are recovering, and the export market is booming.
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Supply side: The operating rate of enterprises is below 75%, and inventory levels are low.
However, the "collective action" of halting production for maintenance reveals another kind of logic.
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Artificially Creating Scarcity: Some companies in the market reduce their operating rates through maintenance, exacerbating the market's "out of stock" expectations and stimulating immediate demand.
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Price increase and price-following strategy: Leading companies (such as Longbai Group) take the lead in raising prices, while small and medium-sized enterprises follow suit under the pretext of maintenance, forming a "maintenance-price increase" cycle.
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Demand for alternatives to chlorination process
With the tightening of environmental protection policies, the sulfate process titanium dioxide faces elimination pressure due to high pollution, while the chloride process technology has become an industry trend due to its environmental advantages.
Leading enterprises such as Longbai Group can enhance the capacity of the chlorination process by carrying out production halts for maintenance and technical upgrades, thereby consolidating their market position.
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Anti-dumping forces transformation
The European Union has imposed anti-dumping duties of up to 39.7% on Chinese titanium dioxide, resulting in a sharp decline in export volume.
The company has adjusted its production line layout during maintenance, shifting some capacity to domestic sales or new energy materials (such as lithium iron phosphate), and utilizing by-product ferrous sulfate to reduce lithium battery costs.
The decision to suspend production and conduct maintenance is underpinned by considerations from the capital market.
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Profit adjustment: Reduce production through maintenance to lessen the impact of losses on financial statements.
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Expectation management: Release the "supply-demand imbalance" signal to drive up stock prices.
The wave of price increases for titanium dioxide, coupled with production halts and maintenance, essentially represents the industry's "dimensional reduction strike" against cost, market, and policy pressures. The underlying logic can be summarized as follows:
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Short-term: Create scarcity through maintenance, drive up prices, and optimize costs.
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Long-term: Complete technical upgrades, production line adjustments, and strategic transformation after maintenance.
This phenomenon reveals a truth about the industry: in cyclical industries, true competition occurs not only at the market front but also in the deep control of the industrial chain and the precise grasp of strategic timing.
The "shutdown philosophy" of titanium dioxide enterprises may be the starting point of the next industrial cycle.
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