Since the beginning of this year, the price of sponge titanium has increased by nearly 40%
2021-04-29
As a titanium alloy raw material, titanium sponge, which is urgently needed in high-end chemical, aerospace, shipbuilding and power industries, prices have continued to rise after the Spring Festival this year. The domestic mainstream No. 1 titanium sponge quotation is at 68,000 yuan, which is nearly 40% higher than the lowest point in July last year.
Regarding the current price increase of sponge titanium, industry analysts said that the current price of 68,000 yuan/ton of sponge titanium is a high this year, but compared with the highest price of 90,000 yuan during the epidemic last year, there is still room for subsequent price increases. some. For sponge titanium, the biggest factor causing product price fluctuations is the relationship between product supply and demand. From the current point of view, due to the surge in downstream demand, especially military demand, there is a possibility that sponge titanium may continue to increase in price.
However, some people in the production of titanium sponge said that domestic titanium sponge enterprises have a high degree of monopoly concentration. The production bases are mainly concentrated in Panzhihua, Henan and Guizhou, etc., and enterprises have strong bargaining power for products, which is also the reason why the price of sponge titanium continues to be strong. . However, with the gradual increase in domestic production capacity of sponge titanium, some demand pressure may be relieved.
With the continuous and rapid development of my country's economy and the continuous improvement of national consumption capacity, there is huge room for the development of titanium alloys in the civilian market. It is estimated that in the next 20 years, the amount of titanium used in the Chinese civil market will reach more than 300,000 tons, and the market economic value will reach 60 billion yuan. With regard to military titanium materials, industry insiders believe that in the next 3 to 5 years, China's military industry will enter a boom cycle, and military titanium materials will continue to usher in a period of development opportunities in the future, which also provides a broad market space for sponge titanium.
According to industry-related data, the demand for titanium sponge in China in 2020 is 114,200 tons, an increase of 26.7% year-on-year; while the output of titanium sponge in China in 2020 is 110,000 tons, and there are still some gaps in product supply.
In this regard, Zhao Lili told a reporter from the Financial Associated Press that during the epidemic last year, due to the existence of downstream demand, sponge titanium enterprises were under-operating, and product prices rose a lot at one time. Subsequently, downstream industries were severely affected by the epidemic, and after sponge titanium companies gradually resumed supply, product prices fell all the way, with a minimum of RMB 48,000 to RMB 50,000. After November last year, the downstream industry gradually returned to normal, and the price of sponge titanium rebounded again.
The above-mentioned business people also told reporters from the Cailian News that prices have risen sharply after the Spring Festival this year. The reason is that downstream orders are sufficient, but insufficient capacity supply has pushed up prices.
It is worth mentioning that since last year, the price of titanium concentrate has continued to rise, and the market is worried that it will bring cost pressures on sponge titanium. According to industry analysts, the main raw material of titanium sponge is ilmenite ore, which is processed into titanium tetrachloride, and then reduced to produce titanium sponge. There is a difference in quality between ilmenite ore and titanium concentrate that produces titanium dioxide. Therefore, the price increase is limited. It will not bring huge cost pressures like the price increase of ilmenite concentrate to sulfuric acid titanium dioxide enterprises, so there is no need to worry too much.
In the face of rising demand for titanium sponge, the domestic production capacity of titanium sponge is also expanding.
According to industry data, in 2020, Xinjiang Xiangsheng and Yunnan Xinli will resume production and expand sponge titanium production lines, which will increase the production capacity of sponge titanium. Sichuan Shengfeng Titanium Industry Co., Ltd. expanded the production of titanium sponge to 15,000 tons, which will be put into operation in October 2021.
The first batch of titanium sponge products of Gansu Guotai Company, a joint venture between Lomon Baili and Jinchuan Group, the industry leader, was successfully released on January 17, 2021. A related person from Lomon Baili said that the company's cooperation with Jinchuan Group is to make sponge titanium and strengthen the company's overall industrial chain. In addition, the 30,000-ton/year rotor-grade titanium sponge project jointly developed by Lomon Baili and Jinchuan Group is currently under active construction, with a total investment of 1.8 billion yuan. It will be constructed in two phases. Production of 15,000 tons of rotor-grade titanium sponge technology upgrading project; the second phase investment of 800 million yuan, and a new project with an annual output of 15,000 tons of rotor-grade titanium sponge. It is planned to form an annual production capacity of 30,000 tons of rotor-grade sponge titanium by 2023.
In this regard, industry analysts said that capacity expansion may relieve the pressure on the supply of titanium sponge, but due to technical conditions, the peak operating rate of domestic titanium sponge enterprises has never exceeded 60%, so the total output is still relatively limited. At the same time as capacity expansion, industry enterprises also need to strengthen the production capacity of high-quality titanium sponge.
It is understood that there are three main production processes for sponge titanium in China, namely chlorination process, molten salt chlorination method, and Mg reduction method. Due to the long-term slow development of titanium sponge production, insufficient investment, and almost no technical reserves, except for the reduction distillation process which can compete with foreign technology in the capacity of a single furnace, other processes are lagging behind foreign countries, resulting in low production of high-quality titanium sponge. .
According to industry insiders, the price trend of titanium sponge will be dominated by high-end demand in the future. With the upgrading of Chinese military products, the demand for downstream high-end titanium materials is growing rapidly, and high-end titanium sponge will become the mainstream of the market, which will force the production capacity upgrade of sponge titanium companies. Technology upgrade.
Benefiting from the titanium sponge market, the performance and stock prices of related companies in the first quarter of this year have risen significantly.
The vanadium and titanium output of Panzhihua Iron and Steel, the leading enterprise in titanium sponge, accounts for more than 20% of the country's total output. On the evening of April 6, Panzhihua Vanadium and Titanium disclosed its performance forecast for the first quarter of 2021. The company expects to achieve a net profit of 140 million to 160 million yuan attributable to shareholders of the listed company in the first quarter, a year-on-year increase of 98.59%-126.96%. The company stated that the main reason for the substantial year-on-year increase in performance in the first quarter of this year was the recovery of the vanadium and titanium industry, and the market price of titanium products rose sharply year-on-year.
In addition, the first-quarter performance forecast issued by Baoti Co., Ltd. shows that the net profit attributable to shareholders of listed companies is expected to be about 92 million yuan in the first quarter of 2021, a year-on-year increase of about 122.59%. Anning`s first-quarter performance forecast shows that the net profit attributable to shareholders of listed companies in the first quarter of 2021 is expected to be 340 million to 370 million yuan, a year-on-year increase of 77.74% to 93.43%.
In this regard, the above-mentioned business people said that price increases will promote the performance of related listed companies. According to current estimates, prices will continue to rise, so it will also be beneficial to the performance of the related listed companies involved in the semi-annual report.
From the market point of view, Panzhihua Iron and Steel Vanadium and Titanium has increased significantly since February 9 this year. On April 7, after the announcement of the first quarterly report, Panzhihua Iron and Steel Vanadium and Titanium rose 4.11%, and as of the closing price of 2.28 yuan, it has risen by more than 20% from the lowest point on February 9. Oriental Tantalum (000962.SZ) also began to rise sharply on February 9 this year, and closed at 8.12 yuan as of April 7, an increase of more than 20%.
