On May 16, CNNC Titanium Dioxide (002145.SZ) issued an announcement. According to the recent market demand for titanium dioxide, the company's price committee decided to comprehensively increase the sales price of various types of titanium dioxide from May 15, 2022. The sales price for customers was increased by RMB 500/ton.
This is the second time this year that the company has raised the sales price of various types of titanium dioxide.
According to the data, starting from March 9, 2022, CNNC Titanium Dioxide will comprehensively increase the sales price of all types of titanium dioxide in the company. Among them: the sales price of domestic customers is increased by 1,000 yuan / ton, and the sales price of international customers is increased by 150 US dollars / ton.
China Nuclear Titanium Dioxide said that the company will closely track the trend of titanium dioxide prices and changes in supply and demand, and timely adjust the price of titanium dioxide products. The overall increase in the sales price of the company's main products will help to further enhance the company's sustainable profitability, help improve the company's market position and influence, and is expected to have a positive impact on the company's operating results.
Previously, on May 10th and 12th, the domestic titanium dioxide leader Longbai Group (002601.SZ) also sent two letters of price increase in succession, and the company's chlorination method titanium dioxide sales price was raised on the basis of the original price by 700 yuan / ton, R -996, LR-108, LR-972 models of sulfuric acid titanium dioxide sales price on the basis of the original price increased by 500 yuan / ton.
Titanium dioxide prices rise
According to the data, titanium dioxide is an important inorganic chemical pigment. The main component is titanium dioxide. Its production process includes two process routes: sulfuric acid method and chlorination method. The downstream is mainly used in coatings, chemical fibers, ceramics and other industries.
The raw materials for making titanium dioxide mainly include titanium concentrate, rutile, chlorine, petroleum coke and sulfuric acid. Titanium tetrafluoride is obtained by the chlorination method to further obtain titanium dioxide, and titanium dioxide is directly obtained by the sulfuric acid method. Most titanium dioxide enterprises in China use sulfuric acid. Law predominates.
Why is the price of titanium dioxide rising? On the one hand, it is to transmit cost pressure; on the other hand, it is driven by downstream demand.
In the upstream of the industry chain, due to the shortage of titanium ore resources and the low inventory, the price of titanium concentrate will continue to run at a high level in 2021. The highest increase was once more than 1.6 times, and the downstream cost pressure intensified.
On the demand side, in recent years, both domestic exports and consumption have shown growth. Exports rose from 831,000 tons in 2017 to 1.312 million tons in 2021, an increase of 57.9%. Domestic demand also maintained a good overall trend, with consumption increasing from 2.259 million tons in 2017 to 2.470 million tons in 2021. In particular, the rapid development of environmental protection, new energy, new and old infrastructure and other fields is expected to further increase the demand for titanium dioxide.
The industry is booming. In 2021, the price of titanium dioxide will rise from 17,000 yuan/ton in January to 21,600 yuan/ton in June. Then, with the continuous efforts of domestic price stabilization and supply, the price began to stabilize. As of December, the price slightly adjusted to 20,700 yuan / ton, an increase of 21.8% during the year.
Profitable last year
The high price of titanium dioxide has also greatly increased the net profit of listed companies related to titanium dioxide.
In 2021, the industry's "big brother" Longbai Group's revenue and net profit both hit the highest level since its listing in 2011.
The data shows that in 2021, Longbai Group will produce 902,200 tons of titanium dioxide, a year-on-year increase of 10.41%, and sell 877,800 tons of titanium dioxide, a year-on-year increase of 5.46%. In the same period, the revenue was 20.566 billion yuan, a year-on-year increase of 45.77%; the net profit was 46.76 100 million yuan, a year-on-year increase of 104.33%.
Ananda, a veteran company, will achieve revenue of 2.047 billion yuan in 2021, a year-on-year increase of 82.49%; net profit will be 185 million yuan, a year-on-year increase of 184.57%, ranking first in the list of net profit growth.
In addition to Longbai Group and Ananda, the net profits of CNNC Titanium Dioxide, Jinpu Titanium Industry, Huiyun Titanium Industry and other companies will double year-on-year in 2021, basically because the market demand for titanium dioxide is strong and the price continues to rise.
Entering 2022, the price of titanium dioxide is still running at a high level, and the industry is still booming.
In terms of performance, in the first quarter of 2022, Longbai Group’s revenue was 6.06 billion yuan, a year-on-year increase of 30%, and its net profit was basically the same as the same period last year; Ananda’s net profit increased by 85.21% year-on-year; CNNC’s titanium dioxide net profit appeared rose slightly.
"Nuggets" new energy
In the secondary market, the stock price performance of titanium dioxide listed companies deviates from the performance growth.
The stock prices of listed companies in the titanium dioxide category have fallen sharply since September 2021. So far in 2022, Longbai Group and Huiyun Titanium have both fallen by more than 30%; CNNC Titanium Dioxide and Anada have experienced larger corrections.
It is worth mentioning that under the dual-carbon goal, the sales of new energy vehicles continue to hit new highs. The current growth rate of lithium iron phosphate batteries is much faster than that of ternary batteries, and it is becoming the mainstream of the power battery market.
In this context, titanium dioxide companies have entered the field of lithium battery materials, producing iron phosphate and lithium iron phosphate, and strive to cultivate the second growth curve.
In fact, the cross-border new energy of titanium dioxide enterprises has a unique competitive advantage. It can take advantage of the processing technology of phosphorus chemical products to prepare ferrous sulfate, a by-product of titanium dioxide, into iron phosphate and lithium iron phosphate, which greatly reduces production costs; at the same time, sitting on the upstream phosphate rock resources also guarantees the raw material end of the lithium iron phosphate project to a certain extent. Self-sufficient.
According to Longbai Group, the company has an annual output of 200,000 tons of battery material-grade iron phosphate project (the first phase of 50,000 tons of iron phosphate) and an annual output of 200,000 tons of lithium-ion battery material industrialization projects (the first phase of 50,000 tons of lithium iron phosphate). . The project of artificial graphite anode material for lithium-ion batteries with an annual output of 100,000 tons (the first phase of 50,000 tons of graphite anode) has entered the trial production stage.
At present, Longbai Group's lithium battery business has received orders. The announcement shows that BAK Battery will purchase lithium battery positive and negative materials from the company from 2022 to 2024, and the purchase quantities will not be less than 5,000 tons, 8,000 tons, and 10,000 tons.
Ananda is even more successful in the new energy business. In August 2021, the 50,000-ton/year battery-grade iron phosphate expansion project will be completed and put into operation on schedule; after the expansion project is completed, the iron phosphate production capacity will increase to 100,000 tons/year. In 2021, Anada's iron phosphate production and sales will increase by 163.17% and 139.29% year-on-year.
In March this year, Jinpu Titanium announced that it plans to spend 10 billion yuan to build 200,000 tons/year battery-grade iron phosphate, 200,000 tons/year lithium iron phosphate and other new energy battery materials integration projects.
Many institutions believe that according to the current tight supply and demand of lithium iron phosphate, there will be opportunities for layout in the upstream and downstream of the industrial chain in the past two years.
Huaan Securities said that the core of the changes in the valuation system of titanium dioxide companies lies in the future development direction of the company. As titanium dioxide enterprises accelerate their deployment in the field of lithium iron phosphate, the titanium dioxide industry chain is expected to usher in a revaluation of value.
