Middle East tensions drive sulfur prices up by over 70%, with the titanium dioxide industry raising prices twice within a month

After half a month, the domestic titanium dioxide industry has once again sparked a wave of price increases.

On March 16, Longbai Group (002601) announced an increase in the prices of its Snow Lotus titanium dioxide products, with a domestic market increase of 500 yuan/ton and an international market increase of $100/ton. Subsequently, many companies such as Huiyun Titanium Industry (300891), Kunming Donghao, and Shandong Xianghai quickly followed suit with uniform increases. This marks the second round of collective price hikes within the month, following a joint price increase by over twenty titanium dioxide companies at the end of February and early March.

The fundamental driver of this round of intensive price increases is the sharp rise in upstream raw material costs. According to data from the bulk commodity pricing platform Business Society, as of March 17, the benchmark price of sulfur was 4,616.67 yuan/ton, up 18% from the beginning of the month and 77% year-on-year; the benchmark price of sulfuric acid has soared to 1,185 yuan/ton, up 12.06% from the beginning of the month and 83% year-on-year.

Sulfur is a byproduct produced during the refining of traditional energy sources such as oil and natural gas, mainly used to produce sulfuric acid. China’s sulfur imports are highly dependent on the Middle East, accounting for 56.2% of total imports in 2025. Recent escalations in Middle East conflicts and tensions in the Strait of Hormuz have directly impacted the global sulfur supply chain, further driving up sulfur prices.

According to Huachuang Securities research reports, raw material costs account for over 60% of the total production cost of titanium dioxide. Under strong cost pressures, the industry generally faces cost inversion pressures.

It is worth noting that despite two rounds of price increases within the month, current titanium dioxide prices have not yet recovered to last year’s levels. Data from Business Society shows that as of March 17, the benchmark price of titanium dioxide was 14,340 yuan/ton, up 3.17% from the beginning of the month, but still about 9% lower than the same period last year.

From the disclosed performance forecasts for 2025, industry-wide pressure on performance is evident. According to announcements, Annada (002136) expects a net loss of 65 million to 103 million yuan in 2025, a decrease of 677.46% to 1015.05% year-on-year. The company stated that during the reporting period, due to sluggish downstream demand, titanium dioxide product prices fell significantly year-on-year, compounded by a year-on-year increase in raw material sulfuric acid prices, leading to a substantial decline in gross profit margins for the titanium dioxide business.

Meanwhile, Jinpuh Titanium (000545) expects a net loss of 428 million to 489 million yuan, with the loss widening year-on-year; Huiyun Titanium, despite increasing titanium dioxide sales last year, is also expected to report a loss.

Ongoing operational losses are forcing supply-side companies to accelerate capacity reductions. On January 16, U.S. Tano Group announced the permanent closure of its titanium dioxide production facility in Fuzhou, China. On the same day, Jinpu Titanium announced that its wholly owned subsidiary, Xuzhou Titanium, had ceased production, which accounts for half of the company’s total capacity.

Domestic companies, under cost pressures, are also facing overseas trade barriers. On March 3, the UK Trade Remedies Authority officially launched an anti-dumping investigation into rutile-type titanium dioxide originating from China, following an application from Tano. This is another major market, after the EU, India, Brazil, and Saudi Arabia, to impose anti-dumping measures against Chinese titanium dioxide. In 2025, China’s total titanium dioxide exports are expected to be about 1.8169 million tons, a 4.46% decrease year-on-year, marking the first annual decline since 2016.

Industry analysts believe that this cost shock triggered by geopolitical factors, combined with overseas trade barriers, is accelerating industry segmentation. Guojin Securities pointed out that, under continuous losses, the survival space for small and medium-sized enterprises is severely squeezed, and supply-side reductions have become a key variable for price recovery.

CITIC Construction Investment believes that overseas anti-dumping measures will force domestic companies to accelerate their international expansion. The case of Longbai Group’s acquisition of the Panengtuo factory in the UK provides a reference for the industry to “swap markets through mergers and acquisitions.” Tianfeng Securities emphasizes that the current industry adjustment is a deep structural reshaping, where cost control ability, technological process level, and global deployment capacity will become core factors determining future competitiveness.

(Source: The Paper)