On the evening of June 8, the titanium dioxide leading enterprise Longbai Group (previously known as "Lomon Billions") announced that according to the market demand for titanium dioxide, the rise in raw material prices and other factors, after the company's price committee research and decision, from July 1, 2021, the company's various models of titanium dioxide (including sulfuric acid titanium dioxide, chlorinated titanium dioxide) sales price on the basis of the original price to the downstream customers increased by 500 yuan / ton.
Screenshot of the price increase announcement issued by Longbai Group
This is already the 6th time this year that Longbai Group has released price increase information. Compared with the previous 5 times, longbai group's price increase this time has shown signs of "easing": one is the increase is reduced, and the other is only for the domestic market. Moreover, so far, no other domestic titanium dioxide companies have followed up with the letter to increase prices.
This round of price increases that swept the paint industry chain has been going on for several months, whether it is the high rise or the length of time is unprecedented, and it is difficult to say the end. In an interview with Badfu, a key producer of emulsions, the main raw materials for coatings, in March, the Paint Classic gave a prejudgment of the inflection point of the mid-year or this round of price increases. So now, has the inflection point of the price increase tide arrived?
Through the monitoring of the price increases of the core producers of the main raw materials of coatings, we found that although this round of price increases is difficult to say the inflection point, it can also be seen that the inflection point is already visible.
Related monitoring shows that the paint procurement cost index has shown a downward trend in 2021 (the red line in the figure).
Titanium dioxide - Longbai Group
As mentioned above, Longbai Group has issued 6 price increase letters so far this year, except for January (up 500 yuan / ton or 100 US dollars / ton) and the upcoming increase of 500 yuan / ton on July 1, the other 4 "monthly increases", each time is "up 1000 yuan / ton or 150 US dollars / ton". It can be seen from this that the price increase of Longbai Group has extended the time interval (the price increase gap in June), the increase has declined (from 1000 yuan / ton to 500 yuan / ton), and the overseas market has not risen (no increase in US dollars) has been given.
As one of the leading enterprises in the titanium dioxide industry, the price increase of Longbai Group often has a leading role, triggering a chain price increase reaction of domestic titanium dioxide companies. However, it has been 3 days since the release of the price increase letter this time, and there has been no follow-up company at present, or it shows a wait-and-see attitude of other titanium dioxide companies.
The price trend of titanium dioxide monitored by relevant institutions shows that the current titanium dioxide and its raw material titanium concentrate are still in an upward channel
Lotion - Badfu, Bao Lijia
As a well-deserved leader in the field of domestic emulsions, Bardfu has raised prices three times this year (February, April and May). But before the price increase, Badfudu absorbed part of the price increase pressure from the upstream within the scope of its ability, winning more time for the downstream.
From the perspective of bardfu's price increase, it also shows a trend of shrinking. And compared with the price increase of titanium dioxide, one is to start late (starting at the end of February, at this time titanium dioxide has risen once or twice), the second is that the increase is compressed quickly, and the third is that no new price increase information has been issued after mid-May.
Another emulsion company, Bao Lijia, which has passed the meeting but has not seen a successful listing for a long time, is limited by the lack of transparency of information, and only a price increase has been monitored until mid-May.
Resin - Tongde Chemical, SABIC
The domestic resin company Tongde Chemical only monitored a price increase information until the end of February, and the increase was not announced. In the international market, SABIC rose once on May 17, and the latest information shows that it will rise again from July 5. However, compared with titanium dioxide and emulsion, the price increase of resin products is not too active.
Pigments - Jiangsu Yuxing Industry and Trade, Huayuan Pigments
The price increase information of pigments is not active - at the end of April, Jiangsu Yuxing Industry and Trade raised the sales price of iron oxide red, iron oxide yellow and iron oxide black products by 500 yuan / ton or 80 US dollars / ton; on May 1, Huayuan Pigment raised the sales price of iron oxide pigments by 500 yuan / ton or 80 US dollars / ton; at present, no new price increase notice has appeared.
The impact of rising prices of paint raw materials on paint companies is immediate. This is because the general scale of coating companies is not large, the lack of bargaining power for the upstream, and the dependence on the downstream leads to difficulty in price increases, so it has become the most core pressure link in the entire coating industry chain.
However, under the surging tide of price increases, paint companies cannot bear the pressure alone, and the downward transmission pressure is also an inevitable choice. Since the beginning of March, paint companies have experienced three price increases, the most recent of which appeared in the end of May and the beginning of June, involving engineering coatings, architectural coatings, wood coatings, industrial coatings and other fields.
In March this year, the reporter of "Paint Classic" interviewed Gong Yanglong, CEO of Badefu Group
But overall, whether it is raw materials or finished paints, the market's rendering of the price increase panic atmosphere has clearly felt more relaxed than in March and April. With the reduction of raw material products that have increased in price, the frequency and magnitude of price increases have decreased, and the nerves that coating companies have been tightening for at least a quarter may be alleviated to a certain extent.
When we look at the entire coating industry chain, the large number of upstream products involved and the complexity of price influencing factors are far beyond our expectations. Nowadays, the international economic situation is unpredictable, and it is a very challenging thing to accurately judge the true trend of the price increase of paint, and no one can accurately grasp where it will go.
Therefore, for this round of price increase tide "whether the inflection point is coming", this article is only based on a rough judgment on the price increase information monitoring of representative enterprises of raw materials upstream of coatings, and does not constitute any investment or procurement suggestions - after experiencing this round of price increases, we hope to see paint companies can form a more perfect pre-judgment and response to the price increase pressure system, as well as strengthen the linkage between the upstream and downstream of the industrial chain, and jointly explore the establishment of a price increase response mechanism.
It can be seen from the price trend of titanium dioxide that at the end of 2020, the price of raw materials for coatings as a whole is at a historical low, so it also exacerbates the feeling of this round of price increases rising rapidly
As Badfu said before, this round of price increases will eventually pass, which is due to the law of the market. However, due to the impact of the epidemic last year, raw material prices are already at a low level, and while exacerbating the perception of this round of price increases "rapidly rising from the low level", paint companies must also be psychologically prepared: even after the inflection point, the price of raw materials is difficult to return to the low level.