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Price of China’s tio2 and the underlying problem it faces up.

Price of China’s tio2 is in cyclical upturn since mid-Aug and about to step up a gear in Oct. as some leading manufacturers may announce price hike soonest after the holiday of National Day. Consecutive price hikes and low-level warehouse stock at factory site are proof of robust demands at home market,  and depreciation of CNY is favorable to steady growth of export. Figures of China’s customs statistics show an export of 657,600t of titanium dioxide from Jan. through Aug. this year, an increase of 2.91% over the same period last year.  

In the meantime, rising prices of feedstock like ilmenite, titanium slag and rutile underpin the momentum of tio2 price. Yet what counts is the rate of feedstock is lifted by tio2 market trend and is far from a driving force. 

Generally speaking, Sep. and Oct. are the traditional high season in China as a popular saying goes “golden Sep. and silver Oct.”. That is to say the demands will ebb in the following months after Oct. as winter is forthcoming and new year is approaching.  A cyclical “wax and wane” then welcomes curtain fall. But, 2019 might be an exception because the nation is celebrating its 70th anniversary of National Day, industrial production and logistics service are restrained and suspended in and around some important cities/regions . This would barricade production and in turn prolong lead time. As result, market likely remains vibrant in Nov.

Now the worryingly vague is about export as we all see that two phases (first in Mar., Apr., May and second Aug., Sep.) of price hike in China are scarcely echoed in overseas market this year. A relatively quiet overseas market offers much less room to raise export price than it is in home market.  Thus manufacturers have to adjust price asymmetrically on export (cheap) and domectic (expensive) sales, in consequence the dual-pricing has become a common practice among those who heavily rely on export. Take into consideration the volume of nearly 1,000,000mt/a as export which is growing year by year,  It should be noted that the larger the disparity, the greater the likelihood of conflict with trade protectionism. 

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