HYYCHEM: The logic of continuous rise in sulfuric acid pushes titanium dioxide prices to remain firm.

Mid-March has passed, and the mainstream price market of titanium dioxide is still in a period of stability. However, due to the continuous strong price increase of the main raw materials sulfur and sulfuric acid, and there is still room for upward movement, titanium dioxide manufacturers are more willing to increase prices, and this time the cost boost is stronger. According to common sense, the price fluctuation of titanium dioxide mainly depends on the supply and demand relationship, with the focus on demand, but this time the mood of expecting price increase has reached its limit, and it is difficult to take into account demand, and the supply side can no longer support it unilaterally.

There are three aspects to the strong price increase of sulfuric acid this time (supply contraction + demand increase + cost support), a total of four factors:

1. Supply contraction: After the Chinese New Year, the inventory of sulfuric acid producers in the trading market is generally low. In addition, due to the shortage of raw materials in many regions across the country and the maintenance of some small and medium-sized sulfuric acid producers, the industry's operating rate and capacity utilization rate in the range have both declined, and the supply gap has gradually emerged;

2. Demand increase: The operating rate and capacity utilization rate of the main downstream phosphate fertilizers (monoammonium phosphate, diammonium phosphate, caprolactam) have increased significantly compared with before the Spring Festival. The demand has increased rapidly, accelerating the formation of a "supply shortage" situation for sulfuric acid;

3. Raw material support (sulfur): Due to the expansion of phosphate fertilizer production capacity in agricultural countries such as India and Brazil, the international sulfur market has seen a substantial increase in import demand, coupled with regional refinery maintenance, etc., causing the international sulfur CFR price to exceed US$280/ton. The raw material cost of sulfuric acid enterprises increased by 478 yuan/ton compared with the same period last year, and the cost transmission mechanism pushed up the price of sulfuric acid;

4. Raw material support (pyrite): The pyrite market presents a "two-wheel drive" feature: on the one hand, the price of sulfur continues to rise, stimulating the demand for pyrite substitution, and the operating rate of pyrite acid production units has increased significantly; on the other hand, the domestic sulfuric acid price is driven by sulfur, and the price remains high, which has laid the foundation for the price of pyrite. In mid-March, the ex-factory price of pyrite (sulfur content 35%) exceeded 880 yuan/ton, up 31% year-on-year. The production cost of pyrite acid enterprises increased by 13% compared with before the Spring Festival, and the cost support effect doubled.

After looking at the supply side, let's look at the demand side of titanium dioxide. In the recent stage, although it is the traditional peak season of "golden March and silver April", the demand enthusiasm is not as good as expected, and the new order situation is not very ideal. Of course, this is related to the overdraft of demand for previous orders, and the recovery demand is too slow, and currently it is mainly based on rigid demand orders. The situation of manufacturers is also polarized. Some manufacturers are still in the state of queuing orders and shipping, while some manufacturers have increased inventory. Most manufacturers are waiting and watching, paying attention to the latest price policies of major large manufacturers. Under this situation, some manufacturers are mostly delivering early orders, while new orders and large orders are more cautious, and the mood of expecting price increases is strong.