Titanium Market Update (May 29)
I. Overview of the Titanium Market
Titanium Ore
Today, the Panzhihua-Xichang titanium ore price index was 1628.75, unchanged from yesterday. The domestic titanium ore market continued its weak and stable trend. Currently, the core constraint on the industry is weak end-user demand. Demand for downstream products such as titanium dioxide and sponge titanium is limited, resulting in a generally sluggish market.
The industry's supply and demand remain in a weak balance. Previously accumulated inventory levels are high, continuing to put pressure on market prices. Upstream and downstream sectors are in a stalemate, and in the short term, titanium ore prices lack upward or downward momentum and will continue their weak and stable trend. The imported titanium ore market is also lackluster.
Overall market inquiries are low. As overseas seaborne shipments arrive, spot inventory is gradually increasing. Many holders are actively offering discounts to expedite sales and alleviate inventory pressure. However, downstream enterprises have a weak willingness to replenish inventory, mostly purchasing in small quantities as needed. The lack of bulk replenishment has led to an imbalance in the purchasing and sales rhythm of traders, increasing operational pressure and resulting in overall sluggish transactions in the imported ore market.
Titanium Slag
In May, the bidding price for high-titanium slag from enterprises in northern China was 5400 yuan/ton, a slight increase of 100 yuan month-on-month, representing a temporary recovery. Currently, the production cost of the titanium slag industry remains high, with comprehensive costs including ore, electricity, and labor remaining high. Most producers are still operating at a loss, and the industry as a whole has a strong desire for price increases. However, constrained by downstream demand, the increase in market demand is limited and cannot support a significant price rise.
Therefore, the industry lacks the impetus for price increases, resulting in only a slight price recovery. Most producers are focusing on maintaining stable prices as their core operating strategy. Looking ahead, Yunnan Province officially enters its high-water season in June, with abundant regional hydropower resources and expectations of lower industrial electricity prices, which is expected to optimize production costs. This will reduce concerns about operating rates for local titanium slag enterprises, and the overall operating rate is expected to steadily recover, gradually releasing market supply.
Titanium Tetrachloride
Currently, the mainstream price of titanium tetrachloride in the domestic market is stable at 5800-6000 yuan/ton, with a stable and positive market trend. High prices for raw materials such as titanium ore and titanium slag provide solid cost support for titanium tetrachloride, effectively mitigating the risk of significant price drops. Downstream core production sectors, such as titanium dioxide produced via the chloride process, are operating stably, with regular, essential demand being released in an orderly manner, resulting in a good supply-demand match and stable market transactions.
Overall, with solid cost support and robust downstream demand, the titanium tetrachloride market faces no significant volatility pressure and is expected to maintain a healthy operating pattern in the short term.
Sponge Titanium
Recently, the sponge titanium market price has remained generally stable, with tiered price differences remaining consistent. The mainstream price range for grade 0 sponge titanium is 48,000-50,000 yuan/ton, while the mainstream price for grade 1 civilian-grade sponge titanium is 47,000-49,000 yuan/ton. Currently, the high cost of sponge titanium provides strong support for product prices, and companies have a strong willingness to maintain prices.
Influenced by upstream price support, downstream deep-processing companies, aerospace and civilian product companies are cautious in signing new orders, basically maintaining a need-to-buy model, without concentrated stockpiling or bulk purchasing. Meanwhile, the market exhibits significant differentiation in shipments, with price differences remaining pronounced across different grades and channels. Considering both cost and demand, the price of sponge titanium is expected to remain stable in the short term.
Titanium Dioxide
Today's titanium dioxide price index is 16772.24, unchanged from yesterday, indicating a generally stable and wait-and-see market. High prices for core raw materials such as titanium ore and sulfuric acid provide solid cost support for the titanium dioxide market, significantly limiting downward price potential.
However, downstream industries such as coatings, papermaking, and plastics are in their traditional off-season, with companies operating at insufficient capacity and only maintaining rigid demand purchases, resulting in cautious and conservative market sentiment. Furthermore, the industry's pricing system is somewhat chaotic, with inconsistent quotations.
Actual transactions are primarily negotiated on a case-by-case basis, creating a strong atmosphere of wait-and-see negotiation between upstream and downstream players. Leading company Longqi plans to release a price adjustment letter in early June, and all manufacturers and traders in the industry are closely monitoring the magnitude and implementation of the price adjustment. The market generally anticipates a new round of overall price adjustments in the industry.
Titanium Dioxide
Currently, the price situation across the entire titanium industry chain shows differentiated characteristics across various sub-categories, with overall stability and slight structural fluctuations. The raw material titanium ore price index remains stable, with no price adjustments; midstream titanium slag prices have slightly rebounded, while titanium tetrachloride prices remain stable at high levels; high-end and civilian-grade sponge titanium prices have stabilized across the board, with a stable price spread; the downstream core product titanium dioxide price index remains flat, awaiting a new round of price adjustments.
The overall industry chain exhibits the core characteristics of high costs supporting the price, weak demand during the off-season, limited price fluctuations, and overall stalemate and stability, with no significant price increases or decreases in any phase.
II. Titanium Price Summary
III. Industry Operating Rate
Titanium Ore
Currently, the procurement cost of titanium ore remains high, and the production costs of mining and beneficiation plants have long been inverted, resulting in meager profits or even losses for enterprises, dampening their production enthusiasm. Most small and medium-sized beneficiation plants have proactively reduced their production load, decreasing capacity release. The overall titanium ore operating rate is showing a continuous downward trend, limiting the increase in spot market supply and creating a weak balance with weak downstream demand.
Affected by multiple factors such as high upstream raw material costs and market supply-demand imbalance, some small and medium-sized titanium dioxide enterprises in the industry have chosen to reduce production and stagger production to avoid the risk of losses.
However, leading enterprises with stable production capacity and strong risk resistance have maintained full-capacity production, offsetting the supply gap caused by the production reduction of small and medium-sized enterprises. The overall industry operating rate remains at a high level, and the market supply is generally sufficient.
Sponge Titanium
The profit margin of the sponge titanium industry is relatively stable, and enterprises face less pressure in production and operation. Coupled with the continued release of downstream demand, the industry's overall production enthusiasm is high. Major domestic sponge titanium producers are maintaining high operating rates, fully releasing capacity, and the market supply is stable. There are currently no large-scale production reductions or shutdowns.
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