Sponge titanium market welcomes expansion

- Dec 12, 2018-

Sponge titanium market welcomes expansion

After experiencing the baptism of the market in previous years, the overcapacity situation in China's sponge titanium industry has been alleviated. In the past two years, the overall operating rate of China's sponge titanium industry has gradually recovered to more than 75%. The number of enterprises has decreased from the previous one to 20 to ten; the product prices have also rebounded gradually, and the business environment is significantly better than 2013. -2015.


After the big waves washed sand, the concentration of the sponge titanium industry increased significantly, and the output of the top 5 enterprises accounted for more than 80% of the total domestic production. In this context, the sponge titanium industry has once again sprouted the signs of expansion. After listing the list of expansion companies, we can find that the main bodies of expansion can be divided into two categories: one is currently the top sponge titanium enterprises in China, and they can achieve the purpose of increasing production by restarting idle devices or adding production devices; The other category is the new plant that was previously invested by the “outsiders”. These new plants will inevitably expand the production capacity of China's sponge titanium.


In the past two years, China's demand for titanium sponge has steadily expanded. Among them, the aviation industry's demand for titanium sponge is the most obvious growth. However, the increase in the production of the sponge titanium industry is even more fierce, which may lead to the suspension of the titanium sponge industry again. From the perspective of changes in the supply side, the total planned expansion of existing enterprises exceeds 20,000 tons/year, and the scale of each new project is also above 20,000 tons/year. In other words, in the next two years, China's sponge titanium capacity will return to the peak period of 130,000 tons / year, or even higher. Although the demand for titanium sponge in China is currently rising slightly every year, it is obviously unable to accommodate such a huge increase. By then, the market will face a new round of competition and reshuffle. In the face of cruel market rules, there will be companies that will be defeated; and those with technological advantages and strong profitability will stick to the end. However, in the process of market adjustment and elimination, all enterprises will inevitably experience another pain. Price wars, zero profits and even loss-making operations will once again be placed in front of all companies. I hope that after the pain, the sponge titanium industry can be transformed into a reborn. After paying tuition fees in the big classroom of the market, you can learn.