According to the prospective industry research Institute released "titanium dioxide industry market demand analysis report" analysis shows that in 2017 and 2018 titanium dioxide demand growth in China will be 10% and 8%, that is, in 2017 China's demand for 210,000 tons (150,000 tons of coatings, 30,000 tons of plastics, 30,000 tons of paper), In 2018, China's demand increased by 180,000 tons (120,000 tons of coatings, 30,000 tons of plastics, 30,000 tons of paper). The demand growth rate is higher than the production capacity growth rate, which makes the supply and demand balance of the titanium dioxide industry further tighter.

Titanium dioxide is about 60% used in the coating industry, and mainly for construction coatings, so the demand for titanium dioxide is very high in relation to the real estate industry, which is a typical post-production cycle industry. House sales area is the most meaningful indicator to predict the demand for titanium dioxide. Combined with the growth rate of housing sales area and the lag time of paint consumption, the growth trend of titanium dioxide demand can be generally predicted.

It is reported that in the first three quarters, the national real estate development investment 8,064.4 billion yuan, an increase of 8.1%, the growth rate is 2.3 percentage points faster than the same period last year. Among them, residential investment grew by 10.4 percent. The floor space of newly started housing was 1,310.33 million square meters, up 6.8 percent year on year, of which the floor space of residential buildings was up 11.1 percent. It can be predicted that under the trend of the recovery of the coating industry, the market demand for titanium dioxide will grow normally.

Since 2016, titanium dioxide into the rising period, whether the price or the price spread are even a new high since the current round of rise, the desire of production enterprises to increase production and resume production is very strong, with production capacity of production enterprises have basically completed the increase in production and resume production, the actual operating rate of the industry is very high, some leading enterprises even more than 100% operating rate, Therefore, in the short term, titanium dioxide depends on the operating rate to increase the potential to increase production is limited.

In addition, after the introduction of the most stringent Environmental Protection Law in the history of 2015, the government environmental protection department has increased the enforcement of pollution penalties for titanium dioxide production enterprises, a number of small and medium-sized titanium dioxide production enterprises with serious pollution and lack of environmental protection measures were forced to withdraw from production, and large titanium dioxide production enterprises are also required to increase environmental protection equipment or improve the level of environmental protection treatment. With the increase of pollutant discharge requirements and the increase of pollutant discharge costs, its environmental costs will be higher and higher.

The current environmental protection situation has brought obvious uncertainty to the production and operation of small and medium-sized titanium dioxide production enterprises, and the conservative estimate of the impact on production capacity is 300,000-500,000 tons/year. The inventory of titanium dioxide in the second half of 2016, generally showing a gradual downward trend. Although there has been a slight recovery recently, it is still at the historical status level on the whole, reflecting a tight supply and demand pattern.

2016 global titanium dioxide consumption of 6.2 million tons, China has now become the world's largest consumer of titanium dioxide, accounting for nearly one-third of global demand in 2016. And in 2016, China replaced the United States to become the world's largest exporter of titanium dioxide pigment. Some institutions predict that 2014-2019 China's titanium dioxide compound annual growth rate of 5.6%, 2019 China's titanium dioxide consumption will reach more than 2.85 million tons.

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