Chinese titanium producers under pressure

Chinese titanium sponge market generally remains slow currently, with prices in a range of RMB97,000-98,000/t for grade-zero titanium sponge and RMB94,000-95,000/t for grade-one titanium sponge, but the price of raw material keeps increasing. Participants believe that producers are under pressure, but the market will keep firm in the coming weeks.

A Liaoning-based smelter, with an output of 50tpm of titanium sponge, sells grade-zero titanium sponge for RMB97,000-98,000/t and grade-one titanium sponge for RMB94,000-95,000/t, and the source mainly sells the material to some long-term customers. "The demand is stable, but the price of raw material keeps very high," said the producer. "Actually we have a very small profit margin for the business."

The smelter just started titanium sponge production since later last year and mainly sells the material in Chinese domestic market.

Meanwhile, a Sichuan-based smelter, with an output of 8,000tpy of titanium tetrachloride, offers RMB8,500/t ex works for the material and mainly sells the material in Chinese domestic market. "We can not accpet anything below RMB8,000/t for some long-term customers," said the producer. "Due to the slow demand of titanium sponge, we have received few enquiries from titanium sponge producers."

The source sells titanium tetrachloride for RMB9,300/t delivered to Zunyi Titanium plant currently and offers RMB8,500/t for 100t of the material to another local titanium sponge smelter.

Meanwhile, a Tanwai-based consumer received offers of USD17.5/kg for titanium ingot from suppliers, but has not made the deal yet. "The offer is too high, and we can only acccept USD14/kg for the material," said the source. "Suppliers raise their titanium price too quickly."

The source purchased about 15t of titanium sponge for USD12-13/kg three weeks ago.