Tight European titanium dioxide (TiO2) supply has driven contract prices up significantly into the second quarter on a take-it-or-leave-it basis, with prices rising to the highest level since the ICIS quarterly contract price assessment began in Q4 2013.
In Q2 2017, price rises of €200-230/tonne were typically heard for standard paints and coatings grade TiO2.
Larger price hikes of €250/tonne and above were also mentioned in certain cases for standard paints and coatings grade TiO2 or for specialties, but this was not seen to reflect the general market trend.
A number of players said that price rises were similar for sulphate and chloride based product in the second quarter, stating that material was tight for both types of product.
However, a few sources have recently said that there was a particularly firm stance for sulphate based product in Q2, which they said was more difficult to obtain.
Q2 contract prices were largely quoted in the €2,300s/tonne-2,400s/tonne FD as a minimum and up to €2,500-2,550/tonne FD for standard paints and coatings grade TiO2.
Some players said that they have similar price levels for TiO2 in the second quarter, irrespective of whether they are sulphate or chloride based, although other sources said that prices for sulphate based TiO2 were at the low-to-mid part of the range and at the mid-to-upper part of the range for chloride based TiO2.
The European TiO2 market remains tight, with volumes still being allocated, deliveries being postponed and lead times continuing to be lengthy. The tightness is linked to several factors, such as producers’ strict inventory controls – which has reduced stock levels in the industry, along with restructuring measures taken globally over the past few years.
The already low stock situation in Europe has been further exacerbated by Huntsman’s fire at its TiO2 plant at Pori in Finland in early 2017, which resulted in a force majeure on product from the Pori site and has led to extended output disruption at the site.
Chemours’ force majeure declaration on its TiO2 supply in Europe in mid-April due to logistical problems at the Port of Antwerp, along with high season demand, particularly from the main paints and coatings sectors has further exacerbated the tightness in the market.
The U.S. Market
US titanium dioxide (TiO2) second-quarter contract prices were assessed higher this week on broadly tight supply and healthy demand.
Talk of tight supply and likely stronger price-hike efforts in the second half of this year was heard again this week.
The US spring paint and coatings season is well underway, with demand steady but not significantly stronger than one year ago.
While a fundamentally tighter spring and summer market is expected by several sources, one buyer said the second half may see much slower demand.
Current initiatives, however, seek gains of 6-7 cents/lb ($132-154/tonne) and contract range at 1.37-1.42 USD/lb, effective 1 March or 1 April, and were said likely to be implemented in mid-summer.
Asia contract CFR price in Q1 was 2400-2520 USD/tonne and spot price is 2800-2850 USD/tonne. Prices for second-quarter titanium dioxide (TiO2) contracts continued to emerge at firmer levels in the week. Some finalised Q2 contract prices in India and southeast Asia were concluded at $150/tonne CFR Asia higher than the previous quarter.
Market players say that most buyers had little choice but to accept the proposed price hikes, owing to tight global supply of the material.
Buyers were seeking to procure more cargoes than necessary for Q2 requirements, amid concerns that prices could escalate further in Q3. However, few suppliers had materials to accommodate additional requests.
Supply of Chinese TiO2 cargoes remains short, and there were few offers for spot cargoes available in the market. Plants in China continue to operate at reduced rates due to stricter environmental protection regulations implemented by the Chinese government.
Export prices from China saw little movement and prices were kept stable amid scant trade, due to limited spot supply.
Chinese producers say that the supply tightness is unlikely to ease until the second half of 2017. Many remain focused on clearing the backlog of orders from previous months, and are not keen to accept new sales orders from buyers unless prices are attractive.
China Domestic Market
Domestic prices in China were firmer week on week, as producers raised offers amid tight domestic supply levels. Domestic buying in China has been healthy amid the ongoing spring season.
Chinese domestic EXW prices for locally produced sulfate-TiO2 was 19,500-20,000 CNY/tonne; anatase-TiO2 was 17,500-18,000 CNY/tonne.