The first half of 2025 also presented multiple economic challenges. Since April, heightened uncertainty in trade policies has weakened global economic momentum. While China's newly released economic indicators for May suggest overall stable operations with some metrics showing continued improvement, the persistent pressures from the deep adjustments in the real estate sector and ongoing external trade frictions continue to significantly impact the titanium dioxide (TiO2) market.

Affected by the economic downturn, TiO2 market demand overall remained sluggish in H1, with prices experiencing both upward and downward trends. As of this writing, sulfate-process TiO2 prices have fallen by approximately RMB 500-700/ton compared to the beginning of the year, and by about RMB 1000-1200/ton from the peak seen in late March. Chloride-process TiO2 prices have declined by roughly RMB 1000-1500/ton since the start of the year.

Phase 1: Upward Movement (Jan-Mar)

• The TiO2 market underwent three rounds of price hikes during Jan-Mar.

• Driving factors included strong increases in raw material prices (sulfuric acid and titanium ore), making it difficult for TiO2 prices to sustain the high costs.

• Additionally, plant maintenance during the Spring Festival holiday led to reduced TiO2 output and tighter market supply, further pushing prices upward.

• However, due to the preemptive depletion of downstream demand and increased export tariffs, demand dropped significantly. Consequently, the anticipated third round of price increases failed to materialize.

• The cumulative price increase over this period was around RMB 600/ton.

Phase 2: Downward Trend (Apr-Jun)

• The TiO2 market saw consecutive price declines from April to June, accompanied by significant price volatility and narrowing price differentials between different grades.

• Poor demand led to substantial sales pressure for producers, with manufacturer inventories gradually rising.

• Starting mid-April, some producers began offering discounts; price adjustments became more frequent towards the end of the month.

• In early May, leading producers (Longqi) lowered prices by RMB 500/ton, prompting adjustments from other manufacturers.

• Due to market conditions and cost pressures, producer inventories swelled, and industry operating rates dropped significantly, with nearly 20 companies halting or reducing production.

• June marked the start of the off-season. Early in the month, leading producers implemented a substantial price cut of RMB 1400/ton; the broader market followed with adjustments of RMB 300-500/ton.

• After this round of cuts, price differentials between grades narrowed considerably, bringing sulfate-process and chloride-process prices largely in line.

• Meanwhile, raw material costs remained stubbornly high. Producer prices hovered around cost levels, with some dipping into slim margins.

• Faced with high inventory pressure, operating rates declined further. The TiO2 market stabilized but remained weak, with prices falling to their lowest point of H1.

Overall Outlook:
New production capacity added this year did not translate into significant output increases during H1. The persistent imbalance between supply and demand has made TiO2 sales increasingly challenging. As the off-season concludes, the crucial question remains: will the traditional peak season of "September-October" (Jin Jiu Yin Shi) deliver the pivotal turning point needed for this year's TiO2 market?