During the first week of June, the titanium dioxide market price showed little visible change on the surface. However, after the sluggish market in May, suppliers have become more adept at retaining customers. Manufacturers in Southwest, East China and other regions have made minor price adjustments based on their own actual conditions. While these moves have not caused widespread shifts in the overall market, producers are continuously tweaking prices in light of their order backlogs, market conditions and competitors' moves. Every price adjustment, whether an increase or cut, serves as early preparation for the emerging weak market trend. Hence, a practical rule of thumb for tracking market movement has formed: look to LB producers for price hikes and TH producers for price drops.
Despite sustained high prices of key raw materials – sulfur and sulfuric acid – cost pressure on titanium dioxide manufacturers has not eased in the slightest, yet the market has started tilting downward in June. The harsh reality of the spot market ignores production costs entirely: manufacturers must either slash profit margins or accept price inversion. Either option amounts to a compromise to accommodate feeble demand.
Manufacturers fall into two distinctly polarized camps:
1. Those with weak existing and incoming orders. Coupled with a temporary slight drop in sulfuric acid prices across Southwest China, some regional producers intend to cut prices modestly. They hope to secure orders via early price reductions to fill clients' inventories.
2. Those holding solid order backlogs that are still being fulfilled. Such manufacturers are reluctant to lower prices and can maintain high stable quotations.
Given divergent operating conditions across producers, early price cuts by some players will generate greater downward pressure, forcing other manufacturers to follow suit, which aligns with our previous analysis.
To offer some positive sentiment to the market: trading liquidity still exists, albeit insufficient and inactive. Rigid demand remains intact. Based on this week's data, June demand may outperform May for two reasons:
First, May's market hit an extremely low point, so any subsequent month will see relative improvement.
Second, by June, most buyers have depleted inventories accumulated earlier, creating inevitable restocking orders. Pricing will still be negotiated case-by-case based on individual orders. As demand picks up, price volatility in the market may intensify.
