1. TiO2 companies expand despite the market downturn
Summary: Some domestic listed TiO2 companies are opting to expand during this current
downtrend. Although this strategy may pay off if the market improves in the future, it is fraught
with risk.
Tag: TiO2, Price, Import volume, Export volume, Trend, Production, Sichuan Lomon, Henan
Billions, DuPont, Huntsman Corporation, Coatings, Titanium feedstock
2014 is approaching, but the domestic TiO2 market is likely to remain in poor condition. The
domestic rutile TiO2 price has declined by about 23% since July 2012 and most domestic
producers have suffered a loss in 2013. Factors for the poor condition include the oversupply
in domestic TiO2 market, the slowdown of China's economy which has caused the domestic
TiO2 demand to decline, and the fragile economic recovery in Europe and the U.S that has
resulted in soft TiO2 exports, according to Titanium China Monthly Report issued by CCM in
December.
However, some domestic producers have increased their production capacity without regard
for the current sluggish condition. This may be a wise strategy if the demand for TiO2 picks up
in the future, but is full of risks.
Panzhihua Dongfang Titanium Industry Co., Ltd. (Dongfang Titanium), a subsidiary of
Pangang Group, is reported to be planning to launch the pilot production for its second phase
rutile TiO2 project with an additional production capacity of 60,000t/a in Dec. 2013. The first
phase project, with a production capacity of 40,000t/a, was put into operation in 2009. The
construction of the second phase project began in 2012, and still needs another investment of
USD105.86 million (RMB650 million). The second phase production line is expected to be put
into operation in June 2014 and will lift up Pangang Group's TiO2 production capacity to more
than 120,000t/a.
CNNC Hua Yuan Titanium Dioxide Co., Ltd. (CNNC Titanium) also announced that it will raise
about USD35.94 million (RMB220.70 million) for the technical reform project of Jinxing
Titanium's existing 100,000t/a TiO2 after-treatment production plant and USD23.57
(RMB144.70 million) for the technical project of Wuxi Haopu's existing 50,000t/a rutile TiO2
fine-finishing production plant. CNNC Titanium was reverse merged by Jinxing Titanium in Jan.
2013. After the backdoor listing, CNNC Titanium's TiO2 production capacity has reached
100,000t/a. At the same time, CNNC Titanium claimed that Jinxing Titanium's after-treatment
capacity will reach 200,000t/a and Wuxi Haopu's fine-finishing production capacity will reach
100,000t/a after the technical reform.
In late Nov. 2013, another listed company—Jilin GPRO Titanium Industry Co., Ltd. (GPRO
Titanium) also plans to raise about USD142.38 million (RMB874.21 million) to construct its
80,000t/a TiO2 project. GPRO Titanium succeeded in its backdoor listing on July 26, 2013,
and currently has a TiO2 production capacity of 45,000t/a in operation (please refer to GPRO

2. Titanium succeeds in backdoor listing and starts trading since July 26, 2013 in Titanium
Dioxide China Monthly Report 1308 for more details). The construction of the 80,000t/a TiO2
project began in Dec. 2012 and is projected to be completed in H2 2015. The plant will operate
at 80% capacity after one year of operation.
Whether increasing the production capacity is wise still remains uncertain. However, listed
companies can easily raise capital from the stock market to support an increase in production
capacity. Under the existing stock market rules, most private investors who subscribe to
non-public offering shares can easily profit by selling the shares to public stock market
investors at a much higher price.
This phenomenon leads private investors to flock to listed companies' non-public offering
shares, ignoring the fund-raising projects' profitability and any concerns about raising capital
regardless of the market. As a result, listed companies have more opportunities to expand
their production capacity than non-public companies when the market is declining.
Therefore,
listed companies can attempt to expand and gain a greater market share with a mitigated risk
of incurring a potential loss, while private investors can access the company and attempt to
profit through the stock market.
Table of Contents of Titanium China Monthly Report 1312:
TiO2 import price declined slightly while the export price enjoyed a rare increase in Oct.
Titanium feedstock imports returned to normal while domestic production increased
significantly
Domestic TiO2 price declined massively from mid-Nov. to mid-Dec.
TiO2 companies expand despite the market downturn
Domestic TiO2 price likely to keep steady in 2014
Luohe Xingmao starts the bidding on its second phase of chloride process TiO2 project
Tianyuan Group to enter the titanium industry for new growth point
Capchem plans to acquire Supe Chemical's 56.92% equities
Domestic automobile output is expected to reach 22 million units in 2013
Zhejiang Transfar to acquire Transfar Coating's 100% equity
th
Titanium Dioxide China Monthly Report, issued by CCM on 25 , is mainly comprised of five
columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company
Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business
opportunities through the latest and helpful information provided in the report.
About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a
staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data,
Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and
Consultancy Service.
For more information, please visit http://www.cnchemicals.com.

3. Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou
510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com