Sponge titanium picks up industry development still needs continuous progress
Recently, the price of sponge titanium has exceeded 60,000 yuan/ton, and the highest quotation has been 64,000 yuan/ton. Therefore, the sound of exploring the rebound of the titanium sponge market has risen with the price, as if seeing "profitable" again, and signs of expansion and resumption of production have risen again.
A hot market requires cold analysis, and a cold market requires hot thinking. Since 2008, the price of sponge titanium market began to decline year by year, and since occasionally there was a small rebound, reporters have been tracking the trend of this price fluctuation. When it fell to more than 40,000 yuan per ton from 2015 to 2016, the reporter wrote an article in this newspaper to analyze that this is the bottom of the price of sponge titanium. "Mind Theory", prices below 60,000 tons rebounded, prices above 60,000 tons fell. It is believed that the up and down fluctuations of the 60,000-ton axis are plus or minus 5,000 tons, and that the "13th Five-Year Plan" is an ups and downs of "shuffle" roads. The trend is basically in line with the original forecast.
In the past three to four years, the titanium sponge market basically saw prices fall from October to March and April of the following year, and prices rebounded from May to September. This was the case from 2015 to 2017. In 2017, there was a quotation of 70,000 yuan/ton. But there is no transaction price. This year, the trend of titanium sponge is miraculously similar to that of previous years, but it is a trend that the bottom has increased year by year. Will this year's recovery "repeat yesterday's story"? I believe it should be roughly similar, but there will be a small increase in the bottom of the price, and the difference is becoming more and more obvious:
First, the recent price recovery of sponge titanium has attracted the attention of downstream processing companies. The reporter visited some titanium sponge enterprises, some have already started to expand their production, a discontinued company is raising funds to start, and a discontinued company in Yunnan is collecting information on the recovery of titanium sponge and is ready to start production at any time. Among them, there are also titanium sponge enterprises that expressed concern, believing that the "recovery" should not be excessive, otherwise it will stimulate more companies to expand production, and even stimulate those companies that have already shut down to "risk death" to resume production, which will affect the existing market order. Produce a strong impact, resulting in a waste of resources. If this happens, the recovery may not last long. Judging from the situation in recent years, the second and third quarters of each year are periods of recovery, and then the temperature drops.
Second, this year's recovery of titanium sponge is related to the continued increase in environmental protection efforts. Due to the pressure of environmental protection, titanium tetrachloride has become more difficult to exert capacity and limited output, which has stimulated the price increase of sponge titanium and it is also quite difficult to purchase cash. The price of titanium tetrachloride has exceeded 6,500 yuan/ton, and market analysis believes that there is a possibility of exceeding 7,000 yuan/ton. In addition, the price of magnesium ingots has risen by about 300 yuan per ton. In fact, the price increase of sponge titanium is the same as the previous two years, and there is a rebound in the growth of raw materials. Therefore, the rising price of sponge titanium needs a cold analysis.
Third, the rebound in the price of sponge titanium is not only stimulated by a small increase in market demand, but also stimulated by continuous upstream and downstream destocking. Hot and cold makes it difficult for sponge titanium companies to walk. At the beginning of this year, the fact that a sponge titanium company stopped production potentially tells the market that the price has temporarily reached the end. Because "where there is death, there is life", this is also the natural law of the market. As for the market's small growth stimulus to the rebound in sponge titanium prices, there are recent orders of downstream titanium processing companies that have increased year-on-year and month-on-month. Recently, the reporter interviewed an enterprise specializing in the production of titanium welded pipes. The sales revenue of this company in 2017 was more than 20 million yuan. The sales revenue in the first half of this year was close to the level of 2017. Small growth in the field). It can be seen that the small downstream growth is also one of the factors contributing to the recovery of sponge titanium.
Based on the above factors, the main reasons for the rebound in the price of sponge titanium can be simply summarized: the application areas are gradually expanding and the market has a small growth demand situation; the upstream and downstream continue to destock and the market has a situation of close to zero inventory of sponge titanium; environmental protection pressure is increasing. Titanium tetrachloride has become a raw material bottleneck for sponge titanium enterprises.
Regarding the recovery of titanium sponge this year, we can maintain a cautious and optimistic trend, but we cannot "extreme happiness and sorrow", otherwise the recovery will be short-lived. According to market analysis, the price should have a certain amount of room to rise on the basis of the existing more than 60,000, but don't expect too high, and the price should not rise too much or too fast, otherwise, the recovery will last for a short time. The reasons are as follows:
First, the recovery is too fast and too violent, which will inevitably stimulate the expansion of current production enterprises and stimulate the pace of production resumption of stopped production enterprises, resulting in the rapid explosion of potential sponge titanium production capacity into actual output, which does not match the small growth of the market, triggering the recovery and turning cold.
Second, the import channels of titanium sponge for downstream titanium processing enterprises are maintained well. If the price of domestic titanium sponge becomes too high and the advantage is gradually lost, it will inevitably lead downstream companies to increase the production of imported titanium sponge (domestic channels for imported titanium sponge remain good. As long as the price of sponge titanium continues to rise, titanium processing companies will restart import channels. Moreover, imported sponges Titanium quality also has advantages).
Third, the price of sponge titanium has recovered too fast and is profitable. The national reserves of tens of thousands of tons of sponge titanium and titanium ingots may go to the market (this analysis is unlikely to be realized, but it does not rule out that the reserve will be reserved when the price rises to a certain high. Titanium sponge will go to the market. Because there is a risk of degradation of the quality of titanium sponge reserves, the longer the reserve time, the greater the risk of degradation, and there is a possibility that a suitable price will go to the market). Therefore, it is unrealistic to expect a substantial price increase of sponge titanium, and the national reserve will also play a potential regulatory role.
Fourth, several existing titanium sponge enterprises are preparing to start and improve their own titanium tetrachloride production systems. Once they can produce on their own, the bottleneck problem of titanium tetrachloride will be relieved accordingly. It is reported that the titanium sponge company that stopped production at the beginning of the year is paying attention to the recent recovery of titanium sponge and is about to resume production. Another discontinued titanium sponge enterprise is raising funds and preparing to start.
Fifth, from January to June this year, the profit of state-owned enterprises increased by 21.1%, and the heavy chemical industry became the "leader". It is reported that industries with substantial profit growth are concentrated in petroleum and petrochemicals, steel, coal, and non-ferrous metals, among which chemical industries such as petroleum and petrochemicals have performed well. Everyone knows that titanium accounts for a relatively large application in the chemical sector. Since the chemical industry has turned for the better, it will naturally stimulate the demand for titanium. This is also one of the factors in the reporter's analysis that the recovery of the titanium sponge market this year is different from previous years, and this is also the difference in the market. But in any case, don't expect too much of the titanium market to recover, after all, the current sponge titanium is still in the "shuffle" stage of overcapacity.
Recovery, cooling, and reshuffle are still unavoidable facts of the titanium industry during the "13th Five-Year Plan" period. Over the past 10 years, China's titanium industry has continued to grow in this spiral. The development of the titanium industry has caused a serious overcapacity of titanium sponge. Therefore, the titanium sponge enterprises involved should not regard each recovery as a life-saving straw, but should regard each recovery as a sign of "shuffle". Only in this way will the pressure become the driving force, and the more you wash, the healthier you will be, so that every recovery can become a dazzling light for the technological upgrade, quality upgrade, and quality upgrade of the reserve enterprise.
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