Challenges After The Price Increase Of Titanium Sponge And Analysis Of The Future Market

The overall trend of the titanium sponge market in 2024 fluctuated greatly. From the beginning of the year, the price of titanium sponge for first-grade products was 50,000 yuan/ton, and it went down all the way to the bottom of about 42,000 yuan/ton in October. The transaction price of some companies reached 41,000 to 41,500 yuan/ton, with a cumulative decline of 8,000 yuan/ton, reaching the historical low of the market. This continuous decline in prices was affected by the international and domestic economic environment, the sharp drop in domestic steel prices and complex market conditions (the production capacity of production companies has increased), etc., resulting in increased inventory of companies, continued low prices, and continuous losses in production.

From January to November 2024, China's titanium sponge production has exceeded 240,000 tons. The low-price sales have greatly reduced the inventory of production companies from 50,000 tons to less than 25,000 tons, and the inventory pressure of companies has slowed down. Therefore, in November and December, the titanium sponge market ushered in a reversal, and companies raised their quotations twice, reaching about 46,000 yuan/ton as of last week. Behind the price increase, on the one hand, driven by factors such as production costs, continuous low-price sales in the market have eased the state of inventory backlog of enterprises, and the losses caused by long-term low prices need to be changed, and enterprises have the internal motivation to raise prices. On the other hand, it may be that, in view of the purchasing psychology of the downstream market, appropriate price adjustments will also help to open up sales.

[Import and export changes]: The import volume of sponge titanium from January to November 2024 is about 100 tons. The increase in domestic sponge titanium supply, improved quality and low prices have made domestic downstream enterprises more likely to choose domestic products. Therefore, since the import volume reached a peak in 2021, the import volume of sponge titanium has decreased year by year.
In terms of exports, the cumulative export volume of sponge titanium from January to November was about 5,240 tons, a year-on-year decrease of about 4.3%, and it is expected to be close to 2023 for the whole year. The export volume of sponge titanium has increased year by year for five years, indicating that the supply pattern of sponge titanium in the international market is gradually changing, and Chinese sponge titanium is gradually becoming the main force in the market to replace the original market share of Russia and Ukraine. However, there is still a gap between Chinese sponge titanium and Japanese sponge titanium, and it is difficult to shake Japan in the field of exporting high-end applications, and continuous efforts are needed. At the same time, the country's export restrictions on primary raw materials and strategic metals will become increasingly strict. Whether to export a large amount of sponge titanium, a strategic metal, remains to be demonstrated.

[Recent price increases and market feedback]: The titanium sponge market has indeed ushered in a new round of price increases as predicted by market analysis last week. However, this price increase did not cause much ripples in the market. Most companies are relatively calm, and the main reason may be closely related to the situation in the downstream market. Only some titanium coil manufacturers have raised their ex-factory prices in response to the increase in titanium sponge prices, while the prices of other titanium materials in the market are basically stable. The situation related to downstream inventory is the key to understanding the feedback of this round of price increases in the titanium sponge market. Although titanium sponge companies hope to achieve the purpose of promotion through price increases, downstream inventories are in a full warehouse state, which makes it difficult to digest the products increased due to price increases. For most material production companies, they have sufficient inventory. Taking Baoji as an example, there are companies with thousands of tons of inventory, and most small and medium-sized enterprises have hundreds of tons of inventory. Therefore, when the price of titanium sponge increased recently, the downstream was eager to purchase, which led to the overall indifference of the material market to the price increase, and they were all using the information of rising material prices to stimulate downstream market consumption.

[2025 Titanium Sponge Outlook]: Looking ahead to 2025, the titanium sponge market will face both challenges and opportunities. From a favorable perspective, as the demand for titanium in the downstream high-end field continues to increase year by year, it will continue to provide development momentum for the titanium sponge market. Coupled with the fact that China's titanium sponge industry itself has already ranked first in the world in terms of production scale and growing trend, this will further consolidate its influence in the global market. It is expected that the new domestic titanium sponge production capacity will be gradually reached in 2025, and the capacity will continue to exceed the demand, and the annual output will exceed 300,000 tons. However, if the current situation of saturated inventory in the downstream market continues to deteriorate, it will be difficult to achieve effective market digestion even if the production capacity and output continue to grow. And with the development of the industry, the global titanium sponge market is facing the pressure of transformation and upgrading, and enterprises will face fierce competition in improving the research and development capabilities of high-end products and controlling production costs. Under the dual pressure of economic uncertainty and oversupply in the industry, it is estimated that domestic titanium sponge will continue to operate at a low and stable level in 2025, and price fluctuations due to inflation and cost pressure are also a high probability event. It is necessary for all enterprises to improve their competitiveness, expand the high-end application market, and make positive progress.

The changes in the domestic titanium material market this week are as follows:
Titanium sponge: price rises, order volume decreases, and some transactions are executed at the original price. The price of grade 0 products is 46,000 to 47,000 yuan/ton, and the price of grade 1 products is 45,000 to 46,000 yuan/ton.
Titanium ingots: the price has risen slightly, the inventory has increased, the market is chaotic, and the sales price varies greatly. The price of pure titanium ingots is about 54,000 to 55,000 yuan/ton, and the price of TC4 titanium alloy ingots is about 58,000 to 60,000 yuan/ton.
Titanium residues: the number of market inquiries for residues has increased, the price has risen, and the transaction price varies greatly. The price of pure titanium residues is about 26,000 to 28,000 yuan per ton, and the price of TC4 alloy residues is about 23,000 to 25,000 yuan per ton.
Titanium slabs: market orders have decreased and prices have stabilized. The market price of pure titanium slabs is between 58,000 and 62,000 yuan per ton, and the market spot resources are sufficient.
Titanium hot-rolled plates (coils): prices have risen, and downstream market demand has decreased. The price of pure titanium hot-rolled coil is 65,000 to 69,000 yuan per ton; the price of pure titanium hot-rolled plate is about 62,000 to 67,000 yuan per ton.
Titanium rod and wire: The market demand is stable, and the order price has rebounded. Pure titanium rods are 110,000 to 120,000 yuan per ton, and titanium alloy rods are 160,000 to 200,000 yuan per ton.
The price of pure titanium wire φ2 to φ4 mm is about 140 to 220 yuan per kilogram, and the price of titanium alloy wire φ2 to φ4 mm is about 240 to 260 yuan per kilogram.
Titanium pipe: The market demand is stable and the order price remains unchanged. The basic price of pipes remains between 115,000 yuan and 120,000 yuan per ton.
Titanium alloy: With the increase in demand, prices remain stable, and the changes in different alloys are slightly different.
Master alloy: The price of aluminum-vanadium master alloy is stable, and the price of 55 vanadium remains at around 115,000 yuan per ton.
The market is expected to experience significant changes and fluctuations in the near future. All companies should pay close attention to market changes and reports from Titanium Home and respond flexibly to ensure that they maintain their competitive advantage in this highly competitive industry.