The EU Commission has announced the latest progress of the anti-dumping investigation against Chinese titanium dioxide.
On June 13, the EU Commission website released the latest progress of the anti-dumping investigation against Chinese titanium dioxide companies conducted last year. Lomon Billions Group (002601) and its subsidiaries will be subject to a 39.7% tariff, Jinxing Titanium (a wholly-owned subsidiary of 002145) will be subject to a 14.4% tariff, 23 cooperating companies including Henan Billions (002136), Sichuan Lomon Billions (300891) and Nanjing Titanium Dioxide will be subject to a 35% tariff, and other companies will be subject to a 39.7% tariff.
This news has attracted widespread attention in the titanium dioxide industry. On June 14, Lomon Billions Group responded that the current tariff rate imposed by the EU on Chinese titanium dioxide is only a tentative statement, and Lomon Billions Group has 3 days to file a defense. The company is organizing its legal team to submit relevant documents to the EU, and there will be a preliminary ruling in 3 days, with a final ruling by the end of the year, during which the EU will discuss the matter.
Lomon Billions Group is one of the world’s largest titanium dioxide producers, with an annual production capacity of 1.51 million tons, accounting for 16% of the global market share. The company is also the only one in China that masters both the sulfuric acid method and the large-scale fluidized chlorination method of titanium dioxide production, and has its own titanium ore supply, which can effectively reduce the production cost of titanium dioxide.
Another leading titanium dioxide producer, CNNC Huayuan, responded that the company is defending the EU anti-dumping case in its own name, and has not yet received the final ruling.
It is understood that this anti-dumping investigation was initiated in response to an application filed by the European Titanium Dioxide Manufacturers Association (ETDC) in September last year. ETDC claimed that Chinese exporters were dumping titanium dioxide in the EU market, leading to a significant increase in titanium dioxide imports from China over the past three years, which had an impact on EU-based titanium dioxide producers. The association estimated that the dumping margin of Chinese titanium dioxide exporters was as high as 45% to 65%.
In November 2023, the European Commission initiated an anti-dumping procedure to investigate whether the titanium dioxide imported from China was being dumped into the EU market.
Subsequently, the Titanium Dioxide Branch of the China Coatings Industry Association organized more than 20 leading titanium dioxide companies in the industry, including Lomon Billions Group, Shandong Dawn Titanium Industry Co., Ltd., and Jiangsu Fanhua Chemical Technology Co., Ltd., to complete the preliminary work of defending against the EU’s anti-dumping investigation without injury.
It is understood that the anti-dumping tax documents on Chinese titanium dioxide companies published by the EU Commission this time are the preliminary ruling results, and the final result has not yet been determined.
It is reported that the current tariff policy has exceeded market expectations, as the previous market expectation was around 10% to 20%.
Titanium dioxide, also known as titanium white, is an important fine chemical raw material, mainly used in the fields of coatings, plastics, paper, etc., with the coatings market accounting for more than 50% of the downstream demand, closely related to real estate and infrastructure. The consumption of titanium dioxide is an important indicator for measuring a country’s economic development and people’s living standards, known as the “barometer of economic development”.
According to Baiinfo data, over the past five years, China’s titanium dioxide export volume has grown at an average annual compound rate of about 13%. In terms of export destinations, they are mainly concentrated in Asia and Europe, with Asia accounting for 52% and Europe 21%.
In 2023, China’s titanium dioxide exports reached 1.6418 million tons, a new historical high.
Minsheng Securities stated in a research report that in recent years, affected by environmental protection policies and energy crises, the production costs of overseas titanium dioxide giants have soared, coupled with the prominent cost and price advantages of China’s sulfuric acid titanium dioxide, China’s titanium dioxide exports have maintained a growth trend.
Last year, the successive shutdowns of overseas titanium dioxide factories further expanded China’s titanium dioxide exports.
It is reported that the international titanium dioxide giant Tronox closed its titanium dioxide factory in Italy in February 2023 and applied for bankruptcy protection in May, and then shut down its titanium dioxide factory in Germany in February this year; the American titanium dioxide producer Chemours closed its titanium dioxide factory in Taiwan, China in July 2023.
Notably, this year, India and Brazil have also launched anti-dumping investigations against Chinese titanium dioxide.
On March 28, the Indian Ministry of Commerce and Industry issued a notice stating that based on the application submitted by India’s main titanium dioxide producers, an anti-dumping investigation has been initiated against titanium dioxide (Titanium Dioxide) originating from or imported from China. On April 30, Brazil issued Announcement No. 15 of 2024, stating that based on the application submitted by domestic companies, an anti-dumping investigation has been initiated against rutile-type titanium dioxide originating from China.
Baiinfo data shows that as of December 2023, India is the largest export destination for China’s titanium dioxide, accounting for 15%, followed by Brazil, accounting for about 7%.
Zheshang Securities stated that the stricter environmental protection policies in the titanium dioxide industry and the decisive role of cost and technology will determine the future pattern of the industry. The National Development and Reform Commission issued the “Catalogue for Guiding Industrial Restructuring (2019 Edition)” in November 2019, listing new sulfuric acid titanium dioxide as a restricted category. It is estimated that by 2025, the supply-demand gap for titanium dioxide will be 401,500 tons, and the titanium dioxide industry will face oversupply, with low-competitiveness companies being eliminated.
Please note a small mistake in the company name:
“…It is reported that the international titanium dioxide giant Tronox closed its titanium dioxide factory in Italy in February 2023 and applied for bankruptcy protection in May, and then shut down its titanium dioxide factory in Germany…”.
The company is Venator, not Tronox.