China's Titanium Dioxide Exports Rebound in September, Driven by Short-Term Factors

A recent report from the Titanium Dioxide Branch Centre of the China National Chemical Industry Productivity Promotion Centre has indicated a significant recovery in exports for the titanium dioxide sector. According to official customs statistics, China's exports of titanium dioxide reached 156,300 tonnes in September, marking a year-on-year increase of 6.52% and a month-on-month rise of 12.68%.

Regional Drivers and Anti-Dumping Impacts

Mr. Sun Zheyu, Secretary-General of the Titanium Dioxide Branch Centre, stated that the growth in September was almost entirely driven by markets in Asia and Africa.

The most significant contribution came from India, where imports surged to 22,500 tonnes. This represented a month-on-month increase of 7,600 tonnes, growth exceeding 50%, and accounted for over 40% of the total global monthly increase. Mr. Sun attributed this primarily to local distributors stockpiling ahead of the formal revocation of anti-dumping duties, which was announced by India's Ministry of Finance to take effect from October 7th.

Further substantial contributions came from Turkey, Egypt, Malaysia, Saudi Arabia, and Pakistan, which collectively added 6,700 tonnes, with each recording month-on-month growth exceeding 30%. South Korea maintained its import volume at 10,000 tonnes, a modest 9% increase month-on-month, retaining its position as the largest single-country market for Chinese titanium dioxide.

In contrast, exports to Brazil recorded 6,400 tonnes, a slight month-on-month decrease of 3%. Shipments to the European Union reached 13,700 tonnes, remaining largely unchanged from the previous month. Mr. Sun explained that since the imposition of anti-dumping duties in the latter half of 2024, demand in both Brazil and the EU has been constrained by high tariffs, resulting in minimal monthly fluctuations.

Analysis of Recovery Factors

Mr. Sun Zheyu's analysis identified several key factors behind the September export rebound:

1. Price Fluctuations

The ex-factory price for rutile-type sulphuric acid-processed titanium dioxide in China fell to ¥14,200 per tonne by the end of August, hitting a four-year low. Following announcements of price increases of ¥300 to ¥500 for September, overseas buyers placed concentrated orders amid concerns over potential price rebounds.

2. Indian Policy Shift

News emerging in late September regarding India's formal removal of anti-dumping duties from October 7th stimulated advance procurement.

3. Cost Advantages

The Renminbi depreciated by 0.9% against the US dollar in September, while ocean freight rates retreated nearly 20% from their peak in July. These factors temporarily restored export profit margins.

4. Seasonal Demand

The Middle East and Africa entered their peak construction season, prompting downstream coatings and plastics manufacturers to stockpile raw materials in advance.

Challenging Outlook and Industry Pressures

Despite the September rebound, Mr. Sun expressed a cautious outlook for the future. He believes the overseas restocking driven by these short-term factors will conclude in October-November. The incremental export effect from India's duty removal is not expected to materialise until November at the earliest. Furthermore, he noted that total local demand in India is capped at 280,000-300,000 tonnes annually, with China already supplying 200,000 tonnes, leaving limited room for further growth.

Mr. Sun highlighted systemic challenges, noting that anti-dumping cases involving Brazil, the EU, and the Eurasian Economic Union cover nearly 30% of China's export market. From 2026 onwards, he warned that high tariffs combined with carbon costs will 'systematically compress export margins' for sulphuric acid-based production.

Domestically, the situation is also constrained. China's new property construction area fell by 21% year-on-year in the first nine months, while paint output declined by 6%, indicating weak domestic demand that cannot absorb overflow production.

On supply, Mr. Sun pointed to significant new capacity additions, with 620,000 tonnes of projects scheduled for commissioning between December 2025 and May 2026. With global demand growing at just 2%–3% annually, he concluded that the 'supply-demand imbalance will intensify further.'

Market Sentiment and Cost Pressures

Echoing some of these concerns, Mr. Yang Xun, an analyst at Titanos Titanium Industry, noted that while October's export figures are expected to remain relatively robust due to advance stockpiling for the overseas Christmas season and new price increase notices, underlying challenges persist.

He described a market characterized by a 'buy high, not low' mentality and intense competition. While demand is weak, the continuous rise in raw material prices, particularly sulfuric acid, leaves little room for producers to lower prices, creating a 'sandwich effect' that squeezes producers.

Mr. Yang noted that some producers and distributors hold slightly elevated inventory levels, while downstream users are controlling purchase volumes, putting the overall market in a destocking phase. If weak sentiment persists, he warned that production cuts and shutdowns may increase, as some producers are already operating at a loss given current titanium dioxide price levels and high sulfuric acid costs.

In the short term, Mr. Yang expects the market trend to remain weak, with stabilization expected by mid-November. He advised market participants to pay close attention to pricing policies announced around the Shanghai International Coatings Exhibition.

Strategic Recommendations

In response to these challenges, Mr. Sun Zheyu proposed strategic shifts. At the corporate level, he suggested that sulphuric acid-based producers accelerate a shift to regions not yet subject to investigations, such as the Middle East, Africa, and Central Asia. Establishing overseas warehouses in locations like Dubai, Tanzania, and Panama could shorten delivery times and mitigate anti-dumping risks.

For chlorination-based producers, he recommended securing three-to-five-year long-term contracts with foreign-invested downstream coating groups to lock in EU Carbon Border Adjustment Mechanism (CBAM) exemption channels. They should also work to reduce high-titanium slag consumption per unit and increase TiO₂ content to pursue quality premiums.

At the policy level, he recommended including chlorination production methods in the green and low-carbon transition catalog, granting green power certificates, and reducing electricity costs to narrow the competitive gap with foreign giants.

Overall, Mr. Sun concluded that September's export surge resulted from short-term factors and 'lacks sustainability.' He warned that by 2026, China's titanium dioxide exports will face 'triple pressures: high tariffs, elevated carbon pricing, and overcapacity'. He stated that the industry 'urgently needs to break free from the low-price cycle by upgrading processes, optimizing layouts, and building brand premiums'.