announced that the prices of the company's other zirconium series products will be adjusted simultaneously. This increase in product sales prices will have a positive impact on the company's operating performance.
At the same time, the company's board of directors reminded investors that the impact of this price increase on sales volume is still uncertain, and the duration of the new sales price cannot be determined, and there is a risk that product prices will continue to fluctuate.
Regarding the price increase of zirconium series products, some market analysts said that it is mainly due to the shortage of supply. The price of zircon sand, the raw material for zirconium series products, has continued to rise this year, which has driven downstream price increases.
The price of zirconium products continues to rise
From the perspective of the zirconium industry chain, the upstream raw materials are mainly zircon sand. In my country, zirconium silicate accounts for about 38% of the zircon sand usage, zirconium oxychloride accounts for 16%, and fused zirconium Accounted for 14%. From the perspective of end consumption, the ceramic industry accounts for 45% and is the largest consumer area of the zirconium industry, followed by chemical zirconium and refractory materials.
my country's zircon sand is highly dependent on foreign countries. In 2019, my country's total zircon sand imports reached 1.182 million tons, which is equivalent to about 704,000 tons of concentrate, and the import proportion reached 98.6%. From the perspective of importing countries, the top three major importing countries are Australia (309,000 tons, 43.79%), South Africa (185,000 tons, 26.20%), and Indonesia (43,000 tons, 6.17%).
Due to the suspension of production by RBM, the world's top three zircon sand manufacturers, the supply of zircon sand continues to be tight. In addition, the development of 5G and dentistry has continued to increase the demand for zirconium-based products, so the price of zirconium sand has been soaring. Data shows that since 2021, the price of Hainan zircon sand has risen from 8,700 yuan/ton at the beginning of the year to 16,650 yuan/ton, an increase of more than 90% during the year.
In addition, the price increase of zirconium products continues. Yesterday evening, according to media reports, Tronox, which continues to rank among the top three in global production, will raise the price of zircon sand by US$175/ton in the next quarter. At that time, the price of South African sand will be raised to US$1,770-1,790/ton, and the price of Australian sand will be raised to US$1,785-1,815. USD/ton.
At the same time, the supply of different types of zircon sand under Tronox will decrease to varying degrees in the next quarter, mainly due to the epidemic. The start-up and operation of mines and the transportation of ore will be affected to varying degrees. At the same time, the person in charge said , this supply shortage cannot be alleviated in the fourth quarter and will continue into next year.
Image source: Asian Metal
While raw material prices continue to rise, demand for zirconium-based products downstream such as biomedical materials and dental products is also increasing, which has driven continued growth in manufacturers' profits. In the first half of the year, Oriental Zirconium Industry achieved operating income of 580 million yuan, a year-on-year increase of 116.47%, and net profit attributable to the parent company of 59 million yuan, turning a loss into a profit compared with the same period last year. During the reporting period, the company's sales of various zirconium-based products increased significantly, among which the zirconium oxychloride product increased by 257.71% compared with the same period last year. In addition, the gross profit margin of Oriental Zirconium's zirconium series products in the first half of the year also increased by 116% to 18.95%. When
was surveyed on August 8 this year, Dongfang Zirconium Industry stated that the company currently has sufficient orders and has been scheduled until the end of October. Downstream customers basically recognize the price increase of zirconium oxychloride, zirconium dioxide, and fused zirconium products. Compared with the same period last year, the company's production capacity utilization rate of each product in the first half of the year increased by approximately 10% to 15%.
Supported by performance, Oriental Zirconium's stock price has also risen. Since May this year, the increase has exceeded 100%, and its performance is quite impressive.
Regarding the market situation in the second half of the year, TZMI (Global Titanium and Zirconium Industry Conference) predicts that the zirconium sand market will continue to be in short supply in 2021, because supply is tight, demand remains strong, and there are no new mining areas or the situation of RBM in South Africa. If the situation is resolved, the current zirconium market conditions may continue until 2022. With the increase in zircon sand prices and the gradual recovery of the downstream market, the prices of downstream products in the zirconium industry will also rise.
What are the concept stocks ?
In addition to Oriental Zirconium Industry, A-share zirconium concept stocks include:
Sanxiang New Materials (603663): mainly produces three series of products: fused zirconia, cast modified materials, and single crystal fused aluminum, with more than 100 varieties. It is widely used in aerospace, military industry, refractory and wear-resistant materials, ceramic glazes, nuclear-grade zirconium materials, advanced ceramics, casting, high-end abrasives and grinding tools, and its business covers more than 30 countries and regions.
*ST Tiancheng (600112): The company's industries include electrical equipment, molybdenum-nickel ore resource development, zirconium-titanium ore resource development, network technology development and Internet financial services.
Baoti Co., Ltd. (600456): According to the "Twelfth Five-Year Plan" development strategy, by 2015, it will form a production capacity of 40,000 tons of ingots, 30,000 tons of titanium and titanium alloy processing materials, and a certain amount of zirconium, nickel, steel and other metal products. capabilities, of which the sales revenue of zirconium and titanium products reached 6 billion yuan, and the international market share increased from the current 10% to 20%, ranking among the top three in the world's titanium processing industry, currently ranking seventh.
Kaisheng Technology (600552): The company's products mainly include fused zirconia, nano titanate, spherical quartz powder, zirconium silicate and rare earth polishing powder.
Everbright Jiabao (600622): Shanghai Gaotai Rare and Precious Metals Co., Ltd., in which the company holds shares (the company holds 21.78 million shares, accounting for 23.37%), is a company that mainly develops and produces nuclear fuel zirconium alloy tubes, titanium, niobium and other rare metals. Precious metals and alloys and other series of products, the annual production capacity of zirconium tubes for nuclear power is more than 650,000 meters.
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