Industry Background and Macro Supply-Demand Mismatch
From the underlying logic of industry supply and demand, the current supply-demand mismatch is a long-term issue. Since 2010, China’s titanium dioxide (TiO₂) production capacity has expanded at an average annual growth rate of 7.2%, outpacing the actual GDP growth rate of 6.7% over the same period. However, the coatings industry—which accounts for nearly 60% of TiO₂ consumption—is highly tethered to real estate. Under the influence of an average annual negative growth (−6.61%) in new housing starts during the same timeframe, terminal demand growth has failed to match capacity expansion, leading to a phased overcapacity.
I. Price Disconnect and Supply-Demand Signals Released by the Market
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Operational Implications
In the current industry structure, enterprises equipped with chloride-process capacity, specialty product R&D capabilities, comprehensive byproduct utilization systems, and mature export channels will possess a distinct competitive advantage. Other conventional capacity enterprises, facing negative actual profit margins or chronically low margins, will still need to focus primarily on competing for sales market share. During this structural transition period, it is imperative for enterprises to adopt highly pragmatic and flexible pricing strategies, strictly prioritizing stable operations and cash flow safety above all else.
Disclaimer: This report is compiled from publicly available market information and industry data. It does not constitute investment, trading, or other professional decision-making advice. Readers should exercise independent judgment based on their own risk tolerance. Data sources: Toodudu Industrial Big Data, Caixin / Cailianshe, JLC Network, Titanium Dioxide Branch Center, Baiyin Youse / Bai Chuan Ying Fu, China Post Securities Research Institute, etc.
