Industry doubts claims A-P as net TiO2 exporter

01 February 1995 00:00  [Source: ICB]

TITANIUM DIOXIDE industry experts have contradicted claims by Ishihara Sangyo Kaisha (ISK) - the Japanese-based TiO2 major - that the Asia-Pacific region was on the point of switching from net importer to exporter of the white pigment. The claims were made as DuPont's pigments and specialities vice president, Dennis Reilley, revealed that its 60 000 tonne/year nameplated TiO2 plant at Kuan-Yin, Taiwan, had only managed to operate at a 16 000 tonne/year rate as 1994 drew to a close, despite DuPont's best efforts. The front-end of the plant was announced to have been operational last May.

In his breakdown of the 185 000 tonne/year of debottlenecking additions initially announced by DuPont at the October 1994 US paints show in New Orleans, US, Reilley said 44 000 tonne/year of the increase would come during 1995 at the Kuan-Yin unit. Players had suspected that the new DuPont expansion figure had been inflated by inclusion of the existing Taiwan plant, due in part to the low investment per tonne figure that the announcement implied. Those figures are $1000/tonne below the recent debottlenecking data provided by DuPont's closest rivals.

The remaining 141 000 tonne/year DuPont expansions, which are to be concentrated at its two giant US plants in Johnsonville, Tennessee, and DeLille, Mississippi, with a minor increase also slated for Altamira, Mexico, will only involve around $90m of investment, or just $650/tonne. Sources support DuPont's claim that this reflects the company's role as the most technologically advanced chloride-route producer.

The ISK net export claims were contradicted by the company's own forecasts of 5%/year TiO2 consumption growth in the Asia-Pacific in the 1993-95 period to 740 000 tonne/year, during which time DuPont's Taiwan plant will be the only major supply addition.

Jim Fisher of US TiO2 consultancy IBMA said the ISK claims reflect the player's hope to push new material into export markets by raising its current low utilisation rates. But the value of the yen would need to rise to at least Yen150 to the dollar for this to be in any way justified economically, and that appears highly unlikely at least during 1995.

* DuPont has planned 7 cent/lb US and 10-15% Canadian price hikes from 1 January after a recent Tioxide statement that it would seek 9% and 14% hikes for weak and strong currency countries in western Europe. ISK is seeking a $100/tonne Q1 hike to $1950-2050/tonne in the Asia-Pacific region.

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