Summary of Titanium Dioxide and Titanium Ore Industry Conference Call Industry Overview - The titanium dioxide (TiO2) market is expected to show a fluctuating trend in 2025, with a projected annual production decline of 4%-5% due to weak real estate demand [1][2][14] - The industry experienced a brief rebound in early 2025, but this was short-lived, ending in mid-March, followed by a downward trend until August [2][3] - In August, prices hit a low point, prompting companies to adjust prices, leading to a new round of price increases, although the market stabilized in September [1][2] Key Points and Arguments - **Inventory Levels**: The average industry inventory was around 45 days in June and July, reduced to about one month after August's destocking [2] - **Cost Pressures**: Rising sulfuric acid prices have not alleviated cost pressures for sulfate-based TiO2 producers, while the price drop of by-product ferrous sulfate exacerbates profitability challenges [1][2] - **Export Challenges**: TiO2 exports are facing significant challenges, with a 5% decline in the first half of 2025 and nearly 7% by July, largely due to unfavorable foreign policies [1][3] - **Capacity Expansion**: Despite the tough market conditions, TiO2 production capacity continues to expand, with new sulfate and chloride production lines being added in Inner Mongolia and Anhui [1][4] Additional Important Insights - **Market Dynamics**: The titanium ore market mirrors the TiO2 market, with prices fluctuating in tandem, although the decline in ore prices is slower due to major mines controlling supply [1][6] - **Profitability**: Large mines maintain profitability with margins around 30%, while smaller operations struggle with profit margins below 100 RMB per ton [10] - **Future Outlook**: The demand for TiO2 is closely tied to macroeconomic conditions, particularly the real estate market. The industry is expected to see a gradual recovery in 2026, particularly in the second half, driven by improved export conditions [14][17] Capacity Developments - **New Projects**: Several new projects are underway, including a 100,000-ton chloride project in Shandong and expansions in Yibin, Sichuan, indicating confidence in future demand [5][6] - **Global Capacity Changes**: Some factories in Taiwan and Japan are closing, while new capacities are being developed in China, reflecting a mixed global capacity landscape [6][18] Market Control and Price Trends - **Market Control**: Major mines have some control over market dynamics, but their ability to manage prices is limited due to the need to balance inventory levels [16] - **Price Predictions**: The price of TiO2 is expected to improve in the latter half of 2026, driven by a low base effect from 2025 and potential export growth [17] Conclusion The titanium dioxide and titanium ore industries are currently facing significant challenges, including declining production, cost pressures, and export difficulties. However, ongoing capacity expansions and potential market recoveries in 2026 provide a cautiously optimistic outlook for the future.