Northeast Securities: Triple logic resonance titanium dioxide industry ushered in a long-term inflection point

The Zhitong Finance App learned that Dongxing Securities released a research report saying that global demand for titanium dioxide is growing steadily, and the chlorination method is the mainstream process for high-end titanium dioxide overseas. The price of sulfuric acid has risen, and the tight pattern is expected to continue until phosphogypsum acid production is put into mass production (expected by the end of 2027). African national resourcism is driving the transformation of supply chains to localized processing, and expectations of tight supply in the medium term have intensified. The bank is optimistic about titanium dioxide labels that combine chlorination and sulfuric acid processes.

The main views of Tohoku Securities are as follows:

Global demand for titanium dioxide is growing steadily, dominated by overseas chlorination processes, and domestic sulfuric acid processes

Titanium dioxide (TiO2) is currently the white pigment with the best comprehensive properties in the world. It is widely used in coatings, plastics, paper, ink, rubber, chemical fiber, cosmetics and new energy. According to the TZMI report, the apparent global consumption of titanium dioxide in 2025 is about 7.63 million tons, and the CAGR is expected to be +2.4% in 2026-2030. Titanium dioxide production is divided into two major processes: sulfuric acid and chlorination. The sulfuric acid method uses titanium concentrate and sulfuric acid as raw materials, and the technology is relatively mature, and the requirements for titanium ore raw materials are low; the chlorination method uses high-grade titanium slag and chlorine gas as raw materials for continuous production. The product has high purity, good whiteness, and uniform particle size, and is the mainstream process for high-end overseas titanium dioxide.

Logic 1: Prices of sulfur and sulfuric acid have soared in the past 25 years, and the profit advantage of the chlorination method is prominent

Russian refineries have been attacked by Ukraine in the past 25 years. Since March '26, Middle East refineries have been damaged due to the US-Iran conflict, and shipping in the Strait of Hormuz has been blocked in stages. Meanwhile, Indonesian nickel hydrometallurgy projects have been put into operation in the past two years. Combined with the concentrated release of rigid demand for phosphate fertilizer during the peak spring farming season in '26, the price of sulfur in Baichuan has skyrocketed to 11,600 yuan/ton. Affected by this, the price of sulfuric acid rose. According to Baichuan statistics, the average price of smelted acid rose from 266 yuan/ton in 24 to 1,610 yuan/ton in early August '26, resulting in a cost increase of about 5,373 yuan/ton. The tight sulfuric acid pattern is expected to continue until phosphogypsum acid production is put into mass production (expected by the end of 2027). Chlorinated titanium dioxide avoids fluctuations in sulfuric acid prices from the raw material side, and the product has a premium of 1000-2000 yuan/ton compared to the sulfuric acid method, showing a profit advantage. Currently, the total domestic production capacity is about 1.12 million tons, including 660,000 tons for Longbai Group, 120,000 tons for Lubei Chemical, and 100,000 tons for Tianyuan Co., Ltd. Overseas production capacity mainly includes 1.1 million tons/year for Chemours, 850,000 tons/year for Tenor, and 517,000 tons/year for Connus.

Logic 2: Overseas anti-dumping of titanium dioxide to China is difficult to change the trend of established giants' production capacity withdrawal

In 2023-2025, the European Union, Brazil and other countries and regions initiated anti-dumping investigations against China. Most of them were finalized in 2025. According to customs statistics, exports of titanium dioxide were 1,816,900 tons in 2025, down 4.46% from the same period last year. Domestic companies are stepping up efforts to develop a market without anti-dumping duties, and as a leading enterprise, Longbai Group has accelerated its overseas expansion through acquisitions and self-construction of overseas production capacity. In 2026H1, China exported 1.0684 million tons of titanium dioxide, up 17% year on year, excluding 10% year on year increase in the Indian market (implementation of India's 26H1 anti-dumping tariffs suspended). Established international giants such as Teno, Comus, Pantech, Connos, and Ishihara have shut down or sold production lines one after another since 2023. 26H1 Chemours and Tenno's operations have continued to be under pressure. Chemu's net profit was -303 million US dollars, and Teno's net profit was -274 million US dollars.

Logic 3: Many countries in Africa have successively tightened their raw ore export policies, and the titanium concentrate supply chain is facing restructuring

African national resourcism is driving the transformation of supply chains to localized processing, and expectations of tight supply in the medium term have intensified. Mozambique passed a new Mining Law in May 2026 prohibiting the export of raw minerals and requiring domestic processing. Tanzania has been implementing strict controls for a long time. Currently, the price of titanium concentrate is weakening due to the drop off of goods from some manufacturers. The average price of titanium concentrate in Baichuan was 1,230 yuan/ton in early August '26, which has already fallen to the level of early 2020. In the medium term, global demand for titanium dioxide maintained a growth rate of +2.4%, corresponding to the annual demand for additional titanium concentrate (based on 47% taste) of at least 400,000 tons.

Optimistic about titanium dioxide labels that combine chlorination and sulfuric acid processes

(1) Longbai Group: It has high-quality titanium ore in Panzhihua. Next year, after the integration of the two mines, the production capacity of titanium concentrate will reach 2.48 million tons/year, the domestic chlorination method 660,000 tons+sulfuric acid method, and the 150,000 tons/year post-treatment capacity of the British plant and 200,000 tons/year post-treatment capacity of the Malaysian plant is expected to be released in 27 years; (2) Lubei Chemical: It has a production capacity of 120,000 tons of chlorination and 200,000 tons of sulfuric acid. 40,000 tons, rutile 13,000 tons, etc.

Risk warning: risk of product price fluctuations, risk of downstream demand falling short of expectations, intensifying industry competition