On June 14, the European Commission announced the latest progress of the anti-dumping investigation carried out against my country's titanium dioxide companies last year. It showed that the five largest listed companies were Longbai Group, CNNC Titanium Dioxide, Nanjing Titanium Dioxide, Annada and Huiyun Titanium owned by Gimpo Titanium. All titanium companies are on the list. Among them, Longbai Group and its subsidiaries will be levied an additional 39.7% tariff, CNNC Titanium Dioxide will be levied an additional 14.4% tariff, and other companies will be levied an additional 39.7% tariff.
Affected by this, the share price of Longbai Group fell sharply by more than 8% that day.
Overseas anti-dumping investigations are coming one after another. As early as August last year, the Eurasian Economic Union took the lead in launching an anti-dumping investigation of titanium dioxide against China. In mid-November 2023, the European Union announced an anti-dumping investigation into Chinese titanium dioxide products. On March 28, 2024, the Indian Ministry of Commerce and Industry announced the launch of an anti-dumping investigation into titanium dioxide originating in or imported from China.
The European titanium dioxide industry organization said that due to the dumping behavior of Chinese exporters in the EU market, titanium dioxide imports from China have continued to increase sharply in the past three years and have gained significant market share. The organization estimates that the dumping margin of Chinese titanium dioxide exporters is 45%-65%. The dumping margin refers to the extent by which the export price of a product is lower than its normal value. European titanium dioxide industry organizations mentioned that due to pressure from China to dump titanium dioxide, several factories in the EU had to stop titanium dioxide production.
Data show that titanium dioxide, also known as titanium dioxide, is an important inorganic chemical pigment. The main downstream industries of titanium dioxide are coatings, papermaking, inks, plastics, rubber and chemical fibers. Among them, the coating field accounts for 61%, the plastic field accounts for 18%, the papermaking field accounts for 10%, and the other application fields account for less than 5%. Titanium dioxide used in plastic products can improve the heat resistance and light resistance of plastic products, protect plastic products from ultraviolet rays, and improve the mechanical and electrical properties of plastic products.
China's titanium dioxide production capacity ranks first in the world, with a high degree of concentration. In 2023, China will dominate the global market with a titanium dioxide production capacity of 5.5 million tons, accounting for 56%. Longbai Group leads the way with an annual production capacity of 1.51 million tons, accounting for 16% of the global market share.
In China, more than 20 mainstream titanium dioxide manufacturers have collectively raised prices frequently, and have been questioned for being suspected of monopoly and price manipulation. Some companies have even called for a boycott of this tacit collective price increase. However, overseas markets, especially the Eurasian Economic Union and the European Union, believe that titanium dioxide produced in China is too cheap and requires anti-dumping investigations.
At the beginning of this year, the domestic titanium dioxide industry had launched three rounds of price increases, and entered a period of weakness in May. Enterprise inventory pressure has increased, and enterprises such as CNNC Titanium Dioxide, Dongjia, Gimpo, and Titanium Ocean have successively lowered the ex-factory price of titanium dioxide.
However, due to high demand, the performance of industry leader Longbai Group surged in the first quarter of 2024. During the reporting period, the company achieved total operating income of 7.294 billion yuan, a year-on-year increase of 4.54%; net profit attributable to the parent company was 951 million yuan, a year-on-year increase of 64.15%; non-net profit after deduction was 925 million yuan, a year-on-year increase of 67.21%.
Lubei Chemical achieved operating income of 1.538 billion yuan in the first quarter of 2024, a year-on-year increase of 39.08%; net profit attributable to the parent company was 50.54 million yuan, a year-on-year increase of 3131.39%; non-net profit after deduction was 48.54 million yuan, a year-on-year increase of 4515.99%.
The EU plans to impose temporary tariffs on titanium dioxide originating in China, which will undoubtedly be a heavy blow to the Chinese titanium dioxide industry, far exceeding previous market expectations of 10-20%. Industry insiders are worried that this move may cause the performance of titanium dioxide companies to decline. China Paper Information Network believes that in addition to anti-dumping pressure, domestic titanium dioxide companies are also facing pressure from stricter environmental protection policies. Companies with low competitiveness will face elimination, and cost and technology will become the core competitiveness in the future. In the long term, the gap between supply and demand in the titanium dioxide industry is expected to be 401,500 tons in 2025. The overall supply exceeds demand, and the industry's backward production capacity faces pressure to clear out, which may be a benefit to the paper industry in reducing costs.
