Tianfeng: Pay attention to investment opportunities in the titanium dioxide industry in the context of anti-insularity.

Tianfeng released a research report stating that in 2024, the global CR4 of titanium dioxide was 44%, with major production companies including LB Group Co., Ltd., Chemours, Tronox, and Panzhihua. In recent years, several overseas facilities have been shut down, providing opportunities for Chinese companies to continuously improve their global market share. From January to August 2025, the average operating rate of domestic titanium dioxide was 70%, industry inventory accumulated rapidly under the dual pressure of exports and domestic demand, leading to a significant downward trend in titanium dioxide prices. As of September 19, the price difference of domestic sulfuric acid titanium dioxide products was 5278 yuan/ton, the lowest value since 2006. Against the backdrop of "anti-inner circle", it is recommended to focus on leading companies with integrated layouts, and recommend focusing on LB Group Co., Ltd. (002601.SZ). Tianfeng's main points are as follows: China is the world's largest producer of titanium dioxide, and the shutdown of several overseas facilities has brought development opportunities for Chinese companies. Since 2000, the increase in global titanium dioxide capacity has mainly come from China. China is the world's largest producer of titanium dioxide, with its capacity accounting for 56% of the global capacity in 2024. In 2024, the global CR4 of titanium dioxide was 44%, with major production companies including LB Group Co., Ltd., Chemours, Tronox, and Panzhihua. In recent years, the shutdown of several overseas facilities has provided opportunities for Chinese companies to continuously improve their global market share. The supply pattern of titanium dioxide in China is "one super + multiple strong + long tail", and industry policies have requirements for energy consumption and processes. There are numerous titanium dioxide companies in China, with only eight companies having a capacity of 200,000 tons or more, accounting for 58% of the total domestic capacity. Among them, LB Group Co., Ltd. ranks first with a capacity of 1.51 million tons and a market share of 26%. The "Industrial Key Energy Efficiency Benchmark Level and Baseline Level (2023 Edition)" and the "Guidance Catalog for Industrial Restructuring (2024 Edition)" have requirements for energy consumption and processes of titanium dioxide units, and companies with low cost, mature large-scale chlorinated titanium dioxide technology, co-production technology and energy efficiency benchmark level have more development advantages. Domestic demand for titanium dioxide is strongly related to the real estate sector, and there are still certain opportunities for external demand. Tianfeng found that there is a positive correlation between the area of housing construction and completion and the apparent consumption of domestic titanium dioxide. Since August 2023, the Eurasian Economic Union, the European Union, India, Brazil, and Saudi Arabia have successively initiated anti-dumping investigations against China's titanium dioxide industry. However, the high external dependence and considerable economic growth rate of titanium dioxide demand in some major exporting countries still leave certain opportunities for China's titanium dioxide external demand. The price difference in the titanium dioxide industry is currently at a historical low. From January to August 2025, the average operating rate of domestic titanium dioxide was 70%, under the dual pressure of exports and domestic demand, industry inventory accumulated rapidly, leading to a significant downward trend in titanium dioxide prices. As of September 19, the price difference of domestic sulfuric acid titanium dioxide products was 5278 yuan/ton, the lowest value since 2006. About 20% of the titanium dioxide industry capacity is accounted for by old production capacity. On July 16, 2025, the Ministry of Industry and Information Technology and five other ministries issued a notification on conducting a survey and evaluation of old equipment in the petrochemical industry, and Hunan Province followed up by conducting a survey within the province. According to Sublime China Information data, the proportion of titanium dioxide industry capacity over 20 years old in China is approximately 19%. Targeting In the context of "anti-inner circle", it is recommended to focus on leading companies with integrated layouts, and recommend focusing on LB Group Co., Ltd. (002601.SZ): 1) The company's main products are titanium dioxide, titanium sponge, zirconium products, and lithium battery anode and cathode materials, with titanium dioxide capacity of 1.51 million tons/year and titanium sponge capacity of 80,000 tons/year, both ranking first in the world, forming a green industrial chain company from mineral selection and processing of titanium to production of titanium dioxide and titanium metal, and comprehensive utilization of derivative resources. 2) The company is the only titanium dioxide producer in China that covers the entire titanium industry chain, with access to high-quality mineral resources and deep processing capabilities, and products cover the entire titanium industry chain. The company has multiple mining rights to ensure stable supply of titanium concentrates for production. Risk warning Risks of fluctuations in raw material prices, safety and environmental risks, and risks of continued economic downturn overseas.