June 4, 2025 – The cross-industry rush of the titanium dioxide sector into new energy has hit a critical turning point. In a recent announcement, CNNC Titanium Dioxide revealed plans to terminate its previously announced 3.82-billion-yuan project for a 500,000-ton-per-year iron phosphate production line, redirecting the remaining 1.666-billion-yuan raised capital into working capital. This decision underscores the severe reality of overcapacity plaguing the upstream lithium battery materials sector.
CNNC Titanium Dioxide is far from alone in adjusting its strategy, according to insights from Color Masterbatch Industry Network. Since 2021, multiple listed companies including Longbai Group and Jinpu Titanium Industry have declared ambitious forays into the iron phosphate field, with investment scales often reaching billions of yuan. However, as market supply-demand dynamics reverse, these cross-industry initiatives are facing collective contraction.
Market data shows iron phosphate prices have dropped by over 30%, plummeting from 15,000-18,000 yuan per ton in early 2023 to 10,000-11,000 yuan per ton currently. Experts note most producers are operating at a loss, making an industry reshuffle inevitable. CNNC Titanium Dioxide’s iron phosphate capacity utilization rate stood at less than 2% in 2023, starkly contrasting with the 83% utilization rate of its core titanium dioxide business.
The initial rationale for titanium dioxide firms entering iron phosphate production centered on cost advantages. The sulfuric acid ferrous byproducts from titanium dioxide production could theoretically reduce raw material costs by over 30%. In practice, however, weak market demand has hindered the realization of these savings. Huiyun Titanium Industry first terminated its 630-million-yuan iron phosphate project last year, while Jinpu Titanium Industry announced the suspension of its 50,000-ton capacity expansion this year.
Industry analysts view this round of strategic adjustments as a reflection of the new energy industry chain’s periodic realignment. As low-end capacity gradually exits the market, enterprises with technological advantages and economies of scale may yet seize new growth opportunities. CNNC Titanium Dioxide has stated it will adopt a more prudent approach to evaluating future investment directions to ensure capital efficiency.