In 2018, the titanium ore market showed the characteristics of high opening and low going. The price in the first quarter was the highest in the whole year, then slowly fell, and the price at the end of the year was the lowest in the whole year. At the beginning of the first quarter, the declining trend of the titanium market at the end of 2017 was eased, and began to rebound slightly at the end of the first quarter, ranging from 20 to 50 yuan per ton. After entering the second quarter, due to the rapid growth of supply, the price of titanium ore has fallen, and the momentum of decline has continued until the end of 2018.

According to Ruidao data, the average price of ilmenite fell by about 150 yuan/ton at the end of 2018 compared with the beginning of the year. In addition, compared with the previous two years, another feature of the titanium market in 2018 is that the volatility is smaller. According to Ruidao data, in 2016, the difference between the highest price and the lowest price of mainstream titanium ore is close to 1000 yuan/ton, and in 2017 it is about 700 yuan/ton, while in 2018 it is about 250 yuan/ton. The relative stability of raw material price is conducive to the healthy development of the industry.

From the point of view of supply and demand, both supply and demand in the titanium ore market increased in 2018. The growth rate at the supply side was greater than that at the demand side, and the titanium ore inventory increased significantly in 2018. From the perspective of supply structure, it is estimated that the amount of imported ilmenite in 2018 will be almost the same as that in 2017, and the increase of supply will mainly come from the domestic sector. The growth of domestic titanium ore mainly comes from Sichuan and Xinjiang. Among them, the output of Panzhihua area in Sichuan province was reduced by environmental protection factors, but the degree of impact in 2018 was significantly weaker than in 2017; the increase of titanium mineral production in Xinjiang region was due to the new start of mining projects in 2018. According to preliminary statistics of Switzerland, the supply of titanium ore in 2018 is about 5% more than the demand. In the case of excess total supply, the user’s freedom of choice increases, and some low-quality imported titanium ores are difficult to obtain customer orders. The market extrusion effect is obvious.

From the market performance at the end of 2018, some titanium enterprises have intentionally controlled the import volume and output. On the import of titanium ore, Bess resources will reduce the supply of titanium ore in the Chinese market in 2019; on the domestic side, Panzhihua area is affected by the sharp fall in the price of vanadium ilmenite and the local government launched “blue protection” measures. Some local mines will reduce or stop production on New Year’s Day in 2019, and enterprises that have stopped production plan to postpone production until after the Spring Festival. It can be predicted that in January 2019, the domestic supply side of titanium ore will decline, which will be conducive to the maintenance of market prices.

In 2018, the Sponge Titanium Market continued to maintain a good boom in 2017. It is estimated that the domestic production of titanium sponge will increase by more than 7% in 2018, while the production will increase, the price will remain at a relatively high level. As can be seen from the price trend chart, the price of sponge titanium in 2018 is on the rise all year round, and this trend is expected to continue until the first quarter of 2019.

In the first half of 2018, the price of titanium sponge rose relatively smoothly, but after entering the third quarter, the production of titanium tetrachloride declined due to environmental factors, and the price of titanium sponge rose rapidly. Unlike the previous year’s price fluctuations, the price of sponge titanium did not fluctuate significantly in the second half of 2018, mainly due to the shortage of raw materials, resulting in a decline in the production of sponge titanium. After the soaring price of sponge titanium in the past year, the start-up rate of sponge titanium enterprises has also increased, resulting in excess market supply and rapid price decline, which makes it difficult for the whole cycle market to continue for more than three months. After the price rise in 2018, the price of sponge titanium has been running at a high level for a long time due to the restriction of the production of sponge titanium. Some people in the industry have not noticed this new situation, and still use the previous wrong experience to think that the price increase will soon fall back. The author believes that the price of titanium sponge will remain high until the normal supply of titanium tetrachloride or the expansion of chlorination capacity of sponge titanium enterprises.

In fact, the price rise of sponge titanium in 2018 was mainly driven by cost, and the demand side improved after July, which laid the foundation for the upward trend of the price in 2018. At the beginning of 2018, when the price of titanium tetrachloride began to rise, sponge titanium enterprises did not have enough cost transfer capacity. It was not until March 2018 that sponge titanium companies began to try to offset cost pressures by raising prices.

In 2018, the long-term high price of sponge titanium also made people feel hot in the sponge titanium market, but in fact, the profitability of sponge titanium enterprises in 2018 is slightly better than that in 2017, but the increase is limited. The main reason is that the cost of raw materials has risen sharply. In addition to titanium tetrachloride, magnesium ingot prices also increased significantly in 2018, which led to the increase in sponge titanium prices offset by the increase in raw material prices, and limited real profit margins. On the other hand, the affordability of the downstream market also restricts the price of titanium sponge. In the second half of 2018, the domestic titanium market improved somewhat, but the price increase was relatively slow and could not bear the high price of sponge titanium, which to some extent constrained the price increase of sponge titanium.

The trend of increasingly stringent environmental standards will be irreversible, which will lead to the domestic supply of titanium tetrachloride to become normal. In view of this, at present, Zunyi Titanium Industry is gradually restoring the production capacity of titanium tetrachloride, and several other new sponge titanium projects are also full-process projects. Depending on the enterprise itself to ensure the supply of titanium tetrachloride has become the development direction. When these projects are put into operation, the bottleneck of sponge titanium supply will be broken through, and how to maintain the balance between supply and demand in the sponge titanium market will become a new topic.

In addition to the titanium tetrachloride industry, the titanium processing industry in 2018 has also been “cared for” by environmental inspection. Unlike most people’s perception, titanium processing industry was not only affected by environmental protection inspection, but also had a deep impact. Of course, there are many reasons, but this also reminds the industry that environmental friendliness is the prerequisite for the healthy and long-term development of any industry, and can not be excluded because of the small amount of pollution. The environmental protection inspection in Shaanxi in 2018 is just the beginning. Local governments and enterprises need to enhance their environmental awareness. If they do not change their ideas and still cope with the situation in an attitude of coping with the situation, they will suffer again in the future. Perhaps the titanium dioxide industry can provide some lessons from the past. Since 2016, the industry of titanium dioxide has been affected by environmental factors. In 2017, the impact is the most profound. The total output of the industry is restricted by environmental factors, reducing by more than 10%. In 2018, some enterprises have completed the upgrading of environmental protection facilities successively, and then the impact of environmental protection inspection has been significantly reduced. However, some enterprises with unfavorable environmental protection facilities have been continuously restricted in production, further reduced production, and have the trend of being excluded from the market. In view of the fact that some small enterprises have to set up environmental protection facilities separately and the heavy economic burden, they need the assistance of the local government to set up a unified sewage system. Maybe it will take some time to build a new park, but it is better to be late than not.

In 2018, the titanium industry has also ushered in a year of full recovery. Large-scale new projects are emerging. Many regional governments have established industrial bases in order to occupy the highland of this new material field and complete the regional industrial upgrading. In the sponge titanium industry, Pangang sponge titanium plant completed expansion transformation, Zunyi titanium industry successfully relocated as a whole, Shuangruiwanji new project construction completed and partially put into production, together with Sichuan and Xinjiang two new sponge titanium plants completed and preliminary trial production, making the industry enter the expansion period again after 2012. In the titanium industry, Panzhihua, Yunnan, Chongqing, Henan and other places are building new titanium industry bases. Among them, Panzhihua mainly introduces titanium processing enterprises, and relying on the advantages of local mineral resources and sponge titanium origin, strives to make up for the last piece of “jigsaw” in the industrial chain.

Based on the advantages of local non-ferrous metal processing industry, especially in mineral resources, the Yunnan Provincial Government has vigorously supported the development of titanium industry in Chuxiong Prefecture and promoted the new industrial ecology featuring green development. Based on the introduction of talents, technology and capital, Chongqing relies on the industry cluster of “transportation aviation + general aviation, helicopter + fixed wing + unmanned aerial vehicle, manufacturing + operation + service” initially formed in the locality, and strives to build a domestic high-end aviation titanium alloy R&D and manufacturing center. The government of Luoyang City, Henan Province has launched six new policies, which focus on attracting talents and social capital effectively, paving the way for the introduction of talents and striving to build the Titanium Valley of Central Plains. It can be said that after the past five years of depression and dormancy, China’s titanium industry recovered strongly in 2018, sponge titanium production capacity expanded again, high-end titanium project investment continued to increase. With the construction of new projects, a new round of investment in capital, technology and talent will accelerate a new round of industrial upgrading. In the future, the pattern of titanium industry in China will meet new changes.