What is the Impact of the EU's Temporary Tariffs on Chinese Titanium Dioxide on the Paper Industry

On June 14, the European Commission announced the latest progress of the anti-dumping investigation against China's titanium dioxide enterprises last year, showing that Longbai Group, China Nuclear titanium Dioxide, Nanjing Titanium Dioxide, Ananda and Huiyun titanium five listed titanium enterprises are all on the list. Among them, the Longbai Group and its companies will be imposed 39.7% tariff, the nuclear titanium white will be imposed 14.4% tariff, and the other companies will be imposed 39.7% tariff.

According to the European titanium dioxide industry organization, due to the dumping behavior of Chinese exporters in the EU market, the imports of titanium dioxide from China have continued to increase sharply in the past three years, and have gained significant market share. The group estimates that the dumping margin of Chinese titanium dioxide exporters is 45% to 65%. Dumping margin refers to the extent to which the export price of a product is lower than its normal value. European titanium dioxide industry organizations mentioned that because of the pressure of dumping titanium dioxide in China, several factories in the EU had to stop titanium dioxide production.

Data show that titanium dioxide, also known as titanium dioxide, is an important inorganic chemical pigment, titanium dioxide downstream of the main industries for paint, paper, ink, plastics, rubber and chemical fibers. Among them, the coatings field accounted for 61%, the plastics field accounted for 18%, the paper field accounted for 10%, and the remaining application fields accounted for less than 5%. Titanium dioxide applied to plastic products can improve the heat resistance and light resistance of plastic products, make plastic products free from ultraviolet rays, and improve the mechanical and electrical properties of plastic products.

China's titanium dioxide production capacity ranks first in the world, and the concentration is high. In 2023, China occupies the leading position in the global market with 5.5 million tons of titanium dioxide production capacity, accounting for 56%, and Longbai Group leads with 1.51 million tons of annual production capacity, accounting for 16% of the global market share.

In China, more than 20 mainstream titanium dioxide manufacturers have frequently raised prices collectively, been questioned about suspected monopoly, price manipulation, and even some companies have called for boycotts of this tacit collective price increase. However, in overseas markets, especially in the Eurasian Economic Union and the European Union, it is believed that titanium dioxide produced in China is too cheap, and anti-dumping investigations are needed.

At the beginning of this year, the domestic titanium dioxide industry has opened three rounds of price increases, and began to enter a weak period in May. Enterprise inventory pressure increased, the nuclear titanium dioxide, Dongjia, Jinpu, titanium Sea and other enterprises have reduced the factory price of titanium dioxide.

The EU intends to impose temporary tariffs on titanium dioxide originating in China, which is undoubtedly a blow to China's titanium dioxide industry, far exceeding previous market expectations of 10-20%. The industry is concerned that this move may make the performance of titanium dioxide companies decline. China Paper Information Network believes that in addition to anti-dumping pressure, domestic titanium dioxide enterprises are also facing the pressure of stricter environmental policies, low-competitive companies will face elimination, and cost and technology will become the core competitiveness of the future. In the long run, it is expected that the difference between supply and demand of titanium dioxide industry in 2025 is 401,500 tons, the overall supply exceeds demand, and the industry is facing the pressure of clearing backward production capacity, which may be a good thing for the paper industry to reduce costs.