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Chinese New Year approaching Titanium dioxide production at full capacity
The Spring Festival is China's most traditional and important holiday, and the holiday is also the longest. Because the overall economy is sluggish, some downstream manufacturers even have a holiday from January 5, and the month 10 to 20 is a release if the peak, the return time to work is basically scheduled for February 10 to 20 about. This also means that the entire titanium dioxide downstream customer group will be discontinued for up to a full month, and related downstream manufacturers that can continue to produce can basically be described by a handful of users.
In contrast, the titanium dioxide factory changed its status of maintenance and repair during the Spring Festival period in early 16th. Basically, every titanium dioxide plant in the country was fully loaded during the Spring Festival. In addition, this is a better improvement for titanium dioxide plants that have been in low inventory and have no inventory. Titanium dioxide production plants can have sufficient time to deploy the titanium dioxide produced this month, and there is no longer a situation similar to that of November.
In terms of logistics, the Northern Logistics Company stopped working from around January 10. Although slightly later in the south, it was basically stopped around the 20th. Therefore, the entire China will have a logistics outage for more than 3 weeks, which is also an important factor affecting titanium dioxide from mid-January to mid-February.
Unfinished orders
From October to early December, the titanium dioxide market in China experienced the most mad rush to grab goods in recent years. Many downstream customers have been sent home with a lot of psychology that has been rising again, and there has even been a need to purchase a few months. The consequence is that the purchase orders are much larger than the actual production capacity of titanium dioxide production enterprises, so that the demand is superimposed so that the manufacturers can only deliver a fraction of the contract order, and the average weight of the various orderers is slowed down.
Based on the current actual production capacity and the quantity of orders received, the coastal titanium dioxide production plants can almost complete the orders owed for 16 years from the end of February to the beginning of March. In the inland titanium dioxide plant, all current orders can basically be completed around mid-February, and individual plants can be fully delivered around the beginning of March.
Therefore, the entire order quantity is determined by the first quarter of titanium dioxide rose or fell, if the downstream New Year's early February plant to resume production, production capacity, and because the Tuen too much no new orders for the titanium dioxide plant or new orders are insufficient, then the titanium The white powder factory has little impact. After all, there are still a large number of old orders that have not been executed. If the situation continues until early March, the titanium dioxide plant has not received sufficient quantities to maintain production for the entire month of March. It will finally come when the price of titanium dioxide is tested.
Overall economic situation in China
China has been the engine of the world economy for some time. As one of the engine's most important driving forces, real estate has also entered a slow period. The largest downstream customer of titanium dioxide, the paint industry, is the most affected. At present, the inflection point of China's real estate policy has been established, and the entire real estate cycle has entered a downward phase. While the growth rate of investment in real estate development in China reached the highest peak in 2010, there have been two rounds of recovery of the real estate cycle, but in this small round of real estate, the rate of increase in real estate investment and new start-up area rebounded gradually. Decrease the trend. When the current real estate is in the process of decline, real estate investment is naturally in decline, and this range will only increase. Only 2015 real estate development investment and new start-up area growth rate has dropped from 33.6% and 40.7% in 2010 to 1% and -14%. In 2016, real estate met Xiaoyangchun at the beginning of the year, so the data was better than 2015. From January to November 2016, the national investment in real estate development was 9,338.7 billion yuan, a nominal increase of 6.5% year-on-year, and the growth rate was down 0.1 percentage point from January to October. Among them, residential investment was 6,258.8 billion yuan, an increase of 6.0%, and the growth rate was increased by 0.1%. Residential investment accounted for 67.0% of real estate development investment. In the 17th year of the real estate market, there was no such thing as Xiao Yangchun. It is currently unknown.
In terms of investment, downward pressure on investment in real estate development in 2017 will be greater, and investment in manufacturing will remain low. As a result of the slowdown in fiscal revenue and pressure from local governments on debt repayment, many reasons lead to many infrastructure constructions and overall investment in fixed assets. The growth rate will continue to slow down.
In terms of domestic consumption, the possibility of a slight fall in consumption growth in 2017 is more likely. First, the growth of residents’ income continued to slow. In the first three quarters of 2016, the per capita disposable income of the country’s residents increased by 6.3% year-on-year, which was lower than the growth rate of GDP, and fell by 1.4 percentage points from the same period of last year. Second, the automobile purchase tax preferential policies that began in the second half of 2015 will expire at the end of 2016. The overdraft demand for car purchases formed through stimulus policies may cause the car sales volume to decline in 2017. Third, the decline in real estate sales will affect the sales of home appliances, furniture and other products.
In addition, a stronger U.S. dollar will create resistance to rising domestic commodity prices, and it is particularly noteworthy that the slump in China's real estate will further weaken demand for industrial products, and titanium dioxide is one of them.
World economic situation
The current growth rate of the world economy continues to decline. Except for a few countries such as the United States and China, the economic downturn is already a common phenomenon. Therefore, there is no particularly large growth in the economy, so the growth in demand for titanium dioxide should be consistent with the amount of economic growth. In 2016, the growth rate of the world economy was even slightly lower than expected by 0.5%, so all sectors of the world are not expecting much of the growth rate of the world economy in 2017.
In terms of exports, the current global trade volume has been reduced from 19 trillion US dollars in 2014 to about 16 trillion US dollars. With the shrinking of global trade and the rise of trade protection, China's export growth rate is still limited, and it is difficult to form a strong driving force for the economy. Titanium dioxide exports have no positive news that 2016 foreign titanium dioxide giants initiatively cut production, so the export of titanium dioxide in foreign trade in 2017 is a bigger test.
Environmental pressure
In 2016, the country made heavy fists to carry out long-term environmental inspections and remediation of chemical companies. A considerable number of heavily polluting enterprises were permanently shut down, and some responsible persons were arrested and punished. As a member of the chemical industry, the domestic titanium dioxide plant has been severely tested, but due to the implementation of the policy, it has basically passed smoothly.
In 2017, China's environmental protection law enforcement will only strengthen and will not weaken. At the end of 2016, environmental protection law enforcement has started to conduct environmental protection enforcement inspections on a large number of downstream companies such as paints. At present, there are as many as 5,000 medium-sized paint companies in China, but it is also rare to become bigger and stronger. Therefore, shutting down integrated downstream coating companies is also There is no delay. Affected by this, the downstream coating companies will inevitably shut down a considerable number of weak and small enterprises in the next few years. This will have a certain impact on the short-term sales of titanium dioxide, but in the long run it will have no harm to the development of the Chinese coatings industry. .
Increased domestic production capacity
At the end of 2016, the Panzhihua Iron and Steel Titanium Plant was successfully put into operation. The production of rutile titanium dioxide at the new plant reached a level of 100,000 tons, and it is expected that the entire line will be produced smoothly in March 2017. Yunnan Zechang resumed production with “Kunming Dongsheng Titanium Industry Co., Ltd.â€. On January 17th, R-251 products continued to be successfully released. After testing, all indicators have basically returned to their original levels. Zechang's total production capacity is 60,000 tons a year. Ruikang Titanium in Xichang is preparing to resume production after the Spring Festival, and its annual output will reach around 60,000 tons. In this way, in 2017, China's titanium dioxide industry will increase the production capacity of nearly 200,000 tons of rutile titanium dioxide, which will greatly ease the shortage of supply in 2016.
to sum up
In the first quarter of 2017, the industry will be relatively stable. After the middle of the Spring Festival in mid-February, it will be possible to see what the status of the entire market will be, with the opening production of downstream manufacturers.
With the advent of 2017, the soaring titanium dioxide in 2016 finally began to wheezing. After a further round of rise in early December, it is temporarily calm. The factors affecting the rise and fall of titanium dioxide in the first quarter are as follows: The Spring Festival, 16 years of uncompleted orders, the overall economic trend, the pressure of environmental protection, as well as foreign demand and domestic production of titanium dioxide increased in these major areas.