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The domestic sponge titanium price has once again fallen to a low point in nearly 5 years

Preface: Sponge titanium, as an important material, has a wide range of applications and growing market demand in both the global and Chinese markets. The continuous upgrading of cutting-edge technology in the titanium industry will greatly promote the development of the sponge titanium market.

The sponge titanium industry in China continues to develop, and with the gradual implementation of industrial policies, the demand for sponge titanium in the market has maintained a good growth trend. In the past decade, the overall production capacity of the sponge titanium market in China has been continuously expanding, and the production capacity of the sponge titanium industry has been declining from 2015 to 2017. Since 2018, the market production capacity has continued to grow, increasing from 150000 tons in 2014 to 300000 tons in 2023, with a production capacity growth rate of 101%; From 2022 to 2023, the production capacity growth rate of the sponge titanium market was also relatively fast, with the industry's annual production capacity growth rate exceeding 20%. However, terminal demand has declined. In 2023, the oversupply of sponge titanium market gradually became apparent, and market prices began to decline all the way.

Due to the downturn in the terminal chemical industry, the demand for sponge titanium has significantly declined. In addition, with an increase in supply this year, there is greater competition pressure from market enterprises. Since the beginning of the year, the price of sponge titanium has been declining, and the market price has dropped rapidly since June. As of now, the transaction price of Level 1 sponge titanium in the market is between 48000 and 50000 yuan/ton. This year, the price of sponge titanium has dropped to a nearly five-year low, with a cumulative decrease of about 25000 yuan/ton since the beginning of the year, a decline of 33%.

Domestic sponge titanium production has also started to decline since June. According to Tu Duoduo's statistics, China's sponge titanium production in July 2023 was 17250 tons, a year-on-year increase of 13.64% and a month on month decrease of 4.70%; From January to July 2023, China's cumulative production of sponge titanium reached 127200 tons, a year-on-year increase of 51.34%, indicating a significant increase in market supply.

The situation of each enterprise is different, and the growth rate of regional production varies. Among them, Yunnan (Yunnan Guotai) has the largest increase in production, with a growth rate of 104%, followed by Liaoning with a growth rate of 101%. Jintai Group has the largest increase in production in Liaoning, and most enterprises in the sponge titanium market have seen significant increases in production compared to last year;

According to Tu Duoduo's data, the apparent consumption of sponge titanium in China from January to June was 107500 tons, an increase of 15% compared to the same period last year, with a consumption increase of 13700 tons. As the market weakens, the consumption of sponge titanium is also gradually decreasing; The recovery of domestic demand is relatively slow, and downstream titanium material export orders have also been greatly affected. Actual consumption has declined, and sponge titanium manufacturers have gradually increased their inventory; There are currently no new projects in the military market, and the demand in the civilian market is weak, resulting in significant pressure on sponge titanium shipments.

The cost prices of raw materials and other materials are high, and the sponge titanium market prices are relatively low. Enterprises have already incurred losses in prices, and manufacturers are under high production pressure. If the sponge titanium production continues to maintain a high level, the market price pressure will still be significant. In the future, the production of sponge titanium enterprises may decline again.

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