The Chinese titanium dioxide (TiO₂) industry has seen remarkable growth, from producing about 1% of global requirements in 2000 to over 55% of global demand this year. Nameplate capacity has grown faster than demand, creating overcapacity for Chinese TiO₂. As with numerous industries, Chinese producers are leaning heavily on exports to fill their capacity. Countries around the world are pushing back on Chinese efforts with antidumping tariffs.

Tariffs on Chinese titanium dioxide, resulting from an unprecedented antidumping claim, are set to go into effect, ranging from a 35-39.7% duty on the expressed CIF border price. The impact of the tariffs is already evident, as Chinese exports to Europe have continually declined in 2024. Brazil has begun implementing tariffs, and the Eurasian Economic Union (EAEU) has also imposed antidumping duties of up to 16.25%. Member states include Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, with Cuba, Moldova and Uzbekistan as observer states. Brazil has instituted fixed tariff amounts in USD, based on its calculation of a “dumping margin” and a “respective weighted average undercutting” amount. The implemented tariffs range from $578/t for LB Group to $1,421/t for most other producers. Antidumping decisions are expected in 2025, originating in large Chinese export destinations, including India, the U.K. and Saudi Arabia. The implemented and proposed tariffs could impact 650 kt of the 1,650 kt exported by China in 2023, or about 38% of all Chinese exports.

What is driving these antidumping investigations and resulting tariffs? Recent investigation results and TiPMC analysis point to several issues:

• The current state of the Chinese real estate market has led to a deceleration in domestic TiO₂ demand. Other segments of the coatings market, including residential repaint, has helped offset the impact of the real estate market, but the explosive earlier growth fueled by the Chinese Real Estate boom has subsided.
• The short supply and surge in pricing in the post-COVID era provided increasing incentive for Chinese expansion. Nameplate capacity has increased by nearly 2M tonnes since 2021.
• The overcapacity led to rapidly decreasing export prices from China, with delivered pricing below profitability levels for competing producers in many countries.
• A TiO₂ Ad Hoc Coalition filed an antidumping complaint with the EU against Chinese TiO₂ producers, triggering an investigation in Europe. Producers in India, Brazil and Saudi Arabia filed similar claims, which triggered investigations in those countries.
• Completed investigations and current complaints focus on state funding and support of TiO₂ companies within China, which is seen as the primary uncompetitive practice supporting the antidumping claims.

Based on the latest analysis of CIF data, TiPMC believes the tariffs will move Chinese costs to serve customers in Europe and Brazil to levels above current multinational producers (MNPs). Chinese producers have indicated a willingness to continue serving these markets despite the challenges.

What Does This Mean for TiO₂ Consumers, and What Can Be Expected in the Future?

TiPMC believes Chinese overcapacity will remain an issue for the foreseeable future. TiPMC expects an ultracompetitive market for Chinese producers, as the addressable market does not grow in line with available capacity. Chinese producers have invested based on a schedule rather than market conditions. Deep-pocketed owners and state support have fueled sales volumes not supported by traditional economics.

Global producers are likely to gain some market share due to the increased cost of Chinese exports to numerous customers. However, TiPMC believes their strategy will favor price increases over market share gains. Margins have slipped for all producers outside of China, as cost inflation is forecasted to impact producers for many more years.

TiPMC expects overall TiO₂ prices to grow, albeit at marginal rates, given the current supply dynamics.

For more insights into the TiO₂ and Mineral Sands markets, visit TiPMCconsulting.com, or see our ad in this issue for more details. For more information about the impact price stabilization on the TiO₂ industry, ask to see our latest issues.