Huntsman leads with TiO2 price hike

21 January 2002 00:00  [Source: ICB]

Huntsman Tioxide has announced its intention to hike titanium dioxide (TiO2) prices in Europe. The producer - the first this year to formally declare a price rise - said it is going for a E150/tonne increase, effective from the middle of February.

The announcement comes as no surprise to other TiO2 players, which say they will support any price increase as current levels are unsustainable. However, against weak demand and a 'terrible year' in 2001, producers will need incredible fortitude to push through a price rise, said one source. Current European prices are heard at an average E1900/ tonne, although large buyers will be paying lower numbers.

One player commented that the timing of the announcement is right because it matches the traditional buying season and the expected improvement in demand in quarter two. Price protection clauses mean that it would take at least one month before the actual rise becomes effective.

Producers believe the market has bottomed out and say stocks at consumers are low following a sustained period of destocking in anticipation of lower prices. During 2001, two attempts to lift prices met stiff resistance from buyers and prices continued to slide as the slowdown deepened, eventually falling below the last increase achieved in 2000.

European prices are the lowest in the world and are still way behind their US counterparts. At present, there is a gap of about $300/tonne against US levels which are reported at an average $2150-2200/tonne. To re-address this, producers say larger and faster price increases will have to be implemented in Europe once the market turns around.

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