In 2023, there will be overcapacity in domestic sponge titanium production, resulting in a sharp increase in production

As of February 2, 2024, the domestic market price of first-class sponge titanium is between 50000-53000 yuan/ton. According to the Commodity Market Analysis System of Business Society, as of February 2nd, the benchmark price of domestic first-class sponge titanium is 51500.00 yuan/ton.


Excessive production capacity leads to a sharp increase in production


China has an overcapacity of sponge titanium and a sharp increase in production. It is expected that the new production capacity will reach over 300000 tons in 2023, and the new construction and planning in 2024 will reach over 400000 tons. In 2023, the economy is still in the recovery stage, and the downstream titanium material market is operating weakly. Demand is weak, and the order volume has decreased, making it difficult to digest such a large capacity supply. The market is experiencing an imbalance between supply and demand. In the second half of the year, some sponge titanium production enterprises have reduced production, timely avoiding the current wave of overcapacity. The main reason for the current market stalemate is the oversupply.


A decrease in import volume and an increase in export volume


According to customs data, the import volume of unwrought sponge titanium in 2023 was 133.844 tons, a decrease of 98.8% compared to last year. The export volume of unwrought sponge titanium in 2023 was 5478.542 tons, an increase of 231% compared to last year. In 2023, there was an oversupply of sponge titanium production and an improvement in quality. Most enterprises cleared their inventory and had an advantage in price compared to imports. Therefore, downstream demand for imported sponge titanium decreased accordingly, and the export volume of sponge titanium also increased in 2023.


Downstream titanium material market demand is weak


Downstream customers are mostly wait-and-see oriented. Due to the rapid development of the titanium industry, titanium materials and products have high requirements for quality and price. Although domestic sponge titanium production enterprises have improved product quality, it is still difficult to meet the needs of military industries such as aerospace in the short term. Many large titanium companies have fixed brands and partners, which reduces the survival space of small and medium-sized enterprises and puts too much pressure on them. Most titanium companies maintain a cautious and wait-and-see attitude, waiting for the next round of price reductions due to more intense market competition.


2024 forecast


Business Society Sponge Titanium Analyst believes that due to the high price of sponge titanium raw materials, production pressure on production enterprises is greater, and more production capacity continues to be released in the market, resulting in an increase in production. In the short term, the sponge titanium market in the sea is showing a weak and stable trend. However, the downstream application market is extensive, and more new electronic products are gradually being launched, leading to a rapid increase in demand. The improvement of the economy and policy encouragement may bring vitality to the sponge titanium market.

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