Wang Baoping: Titanium ilmenite price hard to go up in Q2

Asian Metal: First, thank you for your support to Asian Metal and agreeing to this interview. Could you introduce the general situation about your company?

Wang: Our Company is a processor and trader for titanium ilmenite, titanium rutile, zircon sand, and monazite, meanwhile, our own plants that produce reduced titanium and welding rod, and we also have some business about rolled steels, coal and so on. We imports around 40,000mt of ilmenite sand,6,000mt of rutile sand, 6,000mt of zircon sand and 800mt of monazite each month. Besides titanium import business, the company also focuses on the production of high titanium slag, reduced ilmenite and pigment.

Asian Metal: As your company is mainly dealing with titanium ilmenite, can you introduce the whole market of the material?

Wang: The development direction of titanium ilmenite market is relying on the situation of downstream markets as it needs strong demand to support active market. In China, the consumption of titanium ilmenite in titanium dioxide industry covers more than 80% in the total consumption, while the proportion for titanium metal is small with less impact on titanium ilmenite market. Therefore, the development direction of titanium ilmenite market is relying on the demand from titanium dioxide market.

Before the Spring Festival, the demand for titanium ilmenite was much weaker compared with that in the same periods in the past few years. Many suppliers supposed that there would be a new round of purchase after the Spring Festival, and they were optimistic about the market in March, however, it was only their hope. The fact is that no matter titanium dioxide producers or titanium metal producers had many inventories in stock and they had little intention to buy more in March. Till now, the titanium ilmenite market is still slow and the price is in a thin range.

Moreover, the demand for downstream titanium productions is also very sluggish and the prices are in a very low level. Now the mainstream prices of rutile titanium dioxide are around RMB12,000/t and the prices of anatase titanium dioxide are around RMB15,000/t, which are closed to the cost line. As for titanium metal market, the prices of titanium slag 92%min are only RMB7400/t. In addition, the demand for downstream productions is very weak, which forced producers to give pressure to titanium ilmenite suppliers to reduce the price.

Asian Metal: As you described, current demand of downstream markets is very bad, so how about the supply for titanium ilmenite in China?

Wang: The supply of titanium ilmenite in China is classified into imported titanium ilmenite and domestic titanium ilmenite.

Domestic titanium ilmenite mainly locates in Sichuan, Hainan, Yunnan and other provinces, while the imported titanium ilmenite is from Australia, Vietnam, India and Africa.

As for domestic titanium ilmenite, oversupply is evident in China. Panzhihua city in Sichuan province is the main production area of titanium ilmenite for producing titanium dioxide, and titanium ilemnite in Yunnan and Hainan provinces mainly used for titanium metal. The reserve of titanium ilmenite in other provinces is small and the distribution is not concentrated.

For imported titanium ilmenite, titanium dioxide producers prefer to import from Vietnam, India and Australia. Current inventories of imported titanium ilmenite are not big, and the main reason is that the demand had been very low in the past few months and buyers are cautious to import now.

Asian Metal: How do you fix position of your company with weak demand and oversupply?

Wang: Our company mainly imports titanium ilmenite from Australia and India, and we sometimes import the material from other countries. Meanwhile, we may trade domestic titanium ilmenite, for example, we can buy some titanium ilmenite from Hainan suppliers. The sales volume of all titanium ilmenite can reach 40,000tpm.

We are comparatively mature and competitive in the business of titanium ilmenite now with market and company good will. But the market of titanium ilmenite is greatly impacted by downstream consumers, and we can not control sales volume every month if we only deal with the material. So we set up a reduced titanium plant in cooperation with Atlantic Welding Material Co., Ltd., which commenced operation early March, with the production capacity of 5,000tpm. By this, we can ensure part consumption of titanium ilmenite, for another thing, the reduced titanium plant has steady supply of raw materials.

Meanwhile, we plan to set up a new welding rod plant, which is the downstream market of reduced titanium.

If all the new projects finished, the business of titanium in our company can form a chain of titanium ilmenite - reduced titanium – welding rod. Then we will not be negatively greatly impacted by market volatility.

Asian Metal: Most titanium companies pay more attention to the export policy of Vietnamese titanium ilmenite, which may impact Chinese titanium market greatly. How do you think about it?

Wang: Vietnam government began to limit the export volume of minerals from last July and they also step up anti-smuggling control operations. In this case, the volume of Vietnamese titanium ilemnite exported to China was very small from the second part of last year. The downstream markets are still very sluggish this year with oversupply, so if Vietnam government allows exporting titanium ilmenite to China, it will impact Chinese titanium market greatly with lower prices. That’s the main reason for domestic participants pay attention to the export policy from Vietnam.

It is reported that Vietnam will allow the export of the mineral this year, and the quota of titanium ore may be 600,000tpy or more than it. But the government is yet to give any official statement or pronouncement. If it is true that there will be 600,000tpy of Vietnamese titanium ilmenite exporting to China, the prices of titanium ilmenite in China will go down greatly.

Asian Metal: How do you think about the change of titanium ilmenite prices in the second quarter of this year?

Wang: In a view of domestic downstream markets, titanium dioxide, titanium slag and reduced titanium markets are hard to be active in the second quarter with oversupply. Many consumers still have lots of titanium ilmenite and have little intention to buy more. In addition, consumers are pessimistic about the future market of titanium ilmenite, and they prefer to buy when they need and refuse to buy more when the price is in downtrend. I think the price of titanium ilmenite will keep in a low level in the second quarter without any market indication yet to the contrary.

Asian Metal: Thanks again for your cooperation with Asian Metal!

Wang: Thanks!