Characteristics of domestic sponge titanium market from 2000 to 2020

Since the 21st century, the development of domestic sponge titanium market can be divided into five stages:

Volume price double low period (2000 ~ 2003)

In the early 21st century, China's economy developed rapidly, and titanium was favored by the fields of aerospace and petrochemical industry due to its excellent performance. However, due to the limitations of technology and production equipment, the production capacity of sponge titanium in China was relatively low. In 2003, China's sponge titanium production capacity was only 4000 tons, and the price range remained at 50000 ~ 60000 yuan / ton.

Rapid expansion period (2004-2006) 

The global economy recovered strongly, China's economic consumption structure was upgraded, and a large number of infrastructure construction led to the rapid development of petrochemical industry, resulting in the gradual increase of the gap between supply and demand of sponge titanium in China. The price of sponge titanium rose to 300000 yuan / ton. This has also led to the expansion of production and capacity of a large number of sponge titanium manufacturers. By the end of 2006, the total production capacity of sponge titanium had reached 30000 tons.

Severe winter period (2007-2015) 

Overheated investment in the early stage led to demand growth far less than production capacity, oversupply in the market, and the price of sponge titanium plunged sharply, reaching a bottom of 45000 yuan / ton in August 2009. Since then, under the policy stimulus, although the price briefly warmed up to 120000 yuan / ton, it finally fell back to the low again due to insufficient effective demand. The eight years here are the "severe winter" of China's titanium industry - high production capacity, low demand and micro profit.

Capacity clearing period (2016 ~ 2019) 

Since 2016, under the guidance of supply side reform, backward capacity has been gradually shut down and eliminated, and the industrial concentration has continued to improve. Since 2019, the modernization of China's military equipment has officially entered an accelerated period, the use of titanium in high-end fields such as aerospace and military equipment has been greatly improved, and the industrial structure has gradually shifted from the middle and low-end to the high-end. Meanwhile, affected by the environmental storm, the rising cost of raw materials helped the price of sponge titanium rebound, and the price rebounded to 81000 yuan / ton by the end of 2019.

A new round of reshuffle period (2020 ~ now) 

The high price increase in 2019 attracted a large number of titanium enterprises to expand production and capacity. By the end of 2019, the total production capacity of sponge titanium had reached 152000 tons, a significant increase of 42% year-on-year, but the annual output was only 86000 tons, and the capacity utilization rate decreased to a new low of 56% in five years. In 2020, affected by the epidemic, the demand for titanium materials for chemical and civil products fell seriously, and the price of sponge titanium plunged to 52000 yuan / ton, almost close to the cost line. However, with the gradual control of the domestic epidemic, the demand for chemical titanium materials increased compensably in the first quarter of 2021, and the demand for military titanium materials continued to be hot, and the price of sponge titanium has rebounded to 68000 yuan / ton.