Lyondell Ti02 sale could firm up Europe prices

01 March 2007 14:17  [Source: ICIS news]

LONDON (ICIS news)--Lyondell Chemical’s sale of its titanium dioxide (Ti02) business to Cristal could lead to firmer prices in the European market, producers said on Thursday.

 

A producer said Cristal would have to make some tough decisions regarding plant profitability that could lead to shutdowns and capacity reduction. This could restore margins in the Ti02 sector, the source said.

 

Saudi Arabian firm Cristal, a subsidiary of National Industrialisation Co (Tasnee), announced plans to buy the assets for $1.2bn (€912m) on Monday.

 

The deal is expected to be completed in the first half of 2007. The announced sale includes all of Lyondell’s TiO2 manufacturing assets, mining operations and research facilities.

 

European Ti02 prices came under pressure in recent weeks with some producers removing increases implemented on some accounts since the fourth quarter of 2006.

 

Ti02 FD (free delivered) NWE (northwest Europe) prices were assessed at €2.07-2.31/kg last week, according to global chemical market intelligence service ICIS pricing. This compares with €2.12-2.36 four weeks earlier.

 

One buyer said it was too soon to tell what impact, if any, the acquisition would have on the market. Meanwhile, US Ti02 pigment buyers said they did not anticipate much change as a result of the acquisition.

 

($1 = €0.76)

By: William Lemos
+1 713 525 2653

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