Titanium demand is still growing

The current titanium market should be viewed dialectically, analyzing the present market through the lens of historical trends and using the current market to predict future directions. Since 2018, the price of sponge titanium has been on the rise, while the price of titanium materials has seen only a slight increase. Although the rise in titanium materials is far less than that of sponge titanium, potential factors indicate that the titanium market continues to show growth.

In 2016, a journalist wrote about the actual situation during the 12th Five-Year Plan period, where China produced a cumulative total of 355,599 tons of sponge titanium, with an average annual output of 71,120 tons, and prices consistently adjusted downward. The piece noted that considering the sponge titanium production, national reserves, downstream demand, and the overall development of high-end manufacturing and the real economy, the application of sponge titanium was still lacking in momentum. The production of 60,000 tons of sponge titanium had temporarily become a relative equilibrium point for market demand (fluctuating up and down by 5,000 tons). Only when technological breakthroughs are achieved in high-precision sub-sectors such as aviation, marine, and medical applications—resulting in significant domestic titanium material usage—will this equilibrium price point be effectively surpassed. Even if the equilibrium point is breached, the overall trend of the industry will likely remain in a low-profit space. Only those titanium companies that strategize for high-end production will have greater potential for profit increases, and only unique high-end products in niche markets will possess higher pricing power due to their gross margins.

In 2018, an article titled "The Cyclical Market Pattern of Sponge Titanium is Gradually Fading" was published, analyzing that the cyclical pattern of the sponge titanium market is diminishing. Future market demand will only steadily rise and will not experience the significant fluctuations seen in the last century, as this is a natural outcome of the expanding applications of titanium. However, prices will be influenced by the resumption of production, capacity expansion, and the release of output from new plants. If the release is too rapid, prices may fall, which is determined by overcapacity and not by cyclical factors or human influences.

Regardless, the demand for sponge titanium remains optimistic, unaffected by the "20% theory" or historical cyclical constraints. The cyclical market pattern of sponge titanium is indeed fading. There are reasons to believe that the demand for sponge titanium will not be pessimistic; rather, it is the price wars influenced by capacity release that may be concerning. Cycles are determined by historical factors, the current situation is dictated by application fields, and the positive outlook is based on the performance characteristics of titanium. As the cyclical theory fades, we are bound to witness a favorable trend of steady and continuous growth in China's sponge titanium demand.

In light of the currently vibrant sponge titanium market, reflecting on history and anticipating future developments, we can see that the analyses made by Titanium Micro Media in 2016 and 2018 regarding the future market of sponge titanium stemmed from in-depth research of the upstream and downstream markets. This demonstrates that Titanium Micro Media's analytical writings are grounded in objective analysis supported by facts from the titanium market, and it also indicates that the application fields of titanium are expanding year by year. The demand for titanium in the "three aerospace sectors" (aerospace, aviation, and maritime) is experiencing rigid growth; military-grade titanium is also seeing firm demand. Although titanium consumer products may not see large quantities from each company, the overall growth is significant. At the recently concluded 113th China Daily Consumer Goods Fair in Shanghai, titanium products, though scarce, have become a hot topic. The internationally renowned brand "Xino," known for its insulated cups, has already engaged in the research and development of titanium consumer products, showcasing titanium insulated cups. Over the past decade, titanium has begun to explore cross-industry collaborations in certain high-end fields.

Looking back over the 60-plus years of development of China's titanium industry, titanium, hailed as the third metal poised to rise in the 21st century, is now presented with significant opportunities for growth. However, with opportunities come the need to seize them wisely and respect market laws. One must avoid blindly pursuing large-scale production; otherwise, while the volume of sponge titanium may increase, prices could fall, leading to a decline in the profitability of titanium enterprises, despite the bright prospects for the industry.

The demand for titanium continues to grow, and this positive trend needs to be nurtured by those in the titanium industry.