TITANIUM DIOXIDE | PIGMENTS Low inventories
mean TiO2 market will remain tight
The market for titanium dioxide continues to suffer from supply disruptions and is likely to remain tight for the rest of 2017, according to analysis from TMZI
In its most recent market update in July, market
analyst TZ Mineral International (TZMI) said TiO2 supply disruptions continued to affect the industry during the second quarter, with inventories already low and most global producers operating at full capacity to keep up with demand. It expected the TiO2
market to remain tight throughout the rest of
2017. “There is no further capacity expected to come
on-stream in the near term, apart from the ramp-up of production at Chemours’ Mexican operations and some extra capacity in China. In this environ- ment, prices have continued their upward trajec- tory. TZMI believes prices will continue to increase in North America and Europe before hitting their peak in Q1 2018,” the company said.
Supply-side issues In an exclusive TiO2
market update for Compound-
ing World, TZMI said: “Supply-side issues continue to dominate the TiO2
pigment industry with
additional shortfalls now expected in Europe and in China with the increasing impact of environmental regulation enforcement. The tight market condi- tions that have dominated the TiO2
market for most
of 2016 and 2017 continued through July and August 2017, with supplies difficult to come by and customers remaining open to paying a higher price for securing volume at the height of the paint season in the northern hemisphere. “China was in oversupply in July; however,
inventories began to fall in August following the latest round of environmental inspections,” according to the company. “While it is too early to know exactly what the effect of the environmental enforcement measures will be for both near-term and medium-term capacity, the impact to produc-
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tion in China in Q3 2017 is expected to be material. Furthermore, there are no announcements for new capacity by global producers that would add significant capacity in the next two or three years, perhaps beyond.” TZMI said that Europe and the US are the regions
with the lowest inventory levels, adding that Chinese producers do not have easy access - or the sophisti- cated technical and supply chain advantages - to serve these markets and so have made less of an impact than has been experienced in Asia.
Pricing and demand “Chinese high-quality sulphate prices remain near to western product prices in some regions – such is the state of market tightness. This phenomenon seems unlikely to persist long term, but could continue for a little while longer as western contract prices are adjusted upwards during Q3 on quar- terly pricing adjustments, whereas most Chinese prices are on a spot basis,” according to TZMI. “Demand remains robust in all regions globally
– even those such as Latin America, where under- pinning economic conditions are generally weak. The demand conditions are likely supported by the price environment, with customers that can re-stock or pre-buy volumes doing so to counter future price initiatives. While TZMI believes some ‘relief’ stocks have been built in all regions, the quantum of inventory build is not so significant to initiate a rapid price (and thus demand) response in the immediate future.”
TZMI is a global consulting company that special- ises in the mineral, metal and chemical sectors, including analysis of TiO2 markets.
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www.tzmi.com October 2017 | COMPOUNDING WORLD 21
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