15 October 2007 00:00 [Source: ICB]
Titanium dioxide (TiO2) is used as a pigment to provide brightness, whiteness and opacity to paints and coatings, plastics, paper, inks, fibers, food and cosmetics. The largest consumer is paints, then plastics and paper. TiO2 is available in two crystal forms: rutile and anatase.
Global demand is expected to rise by 2-3% this year, despite weaker-than-expected demand in the US, caused by uncertainties in the region's housing market. US TiO2 producers have been sending additional volumes to Europe and Asia, contributing to a fall in European prices this year. Demand is healthy in Asia, where strong economic growth in countries such as China and India is boosting downstream sectors.
TiO2 prices are expected to remain stable in Europe and the US for the fourth quarter (Q4), despite producers' attempts to introduce increases in response to low returns this year. Producers say prices have fallen behind rising energy costs in recent years, and the resulting margin squeeze is adding urgency to price hike initiatives. In Asia, negotiations are under way after major producers announced price increases by $100/tonne (€70.66/tonne) for Q4.
TiO2 is produced from either ilmenite, rutile or titanium slag. The pigment is extracted by using chlorine (gas-phase chloride route) or sulfuric acid (liquid-phase sulfate process). The chloride route enables higher productivity gains, and produces a purer product with a tighter range of particle size. The sulfate route uses simpler technology and can use lower grade, cheaper ores. Rutile TiO2 can be produced using both processes, but anatase pigments, used mainly in fibers, can only be produced by the sulfate route. Failed attempts this year by Kemira and Tronox to divest sulfate process plants indicate a long-term preference for the chloride route, which accounts for about 3.25m tonnes/year of the world's estimated 5.75m tonne/year TiO2 capacity.
Uncertainties surround the unstable housing recovery in the US, with improvements expected in mid-2008 or early 2009. Economic growth in Asia, Russia and Eastern Europe is boosting TiO2 demand in those regions, and producers are confident they will be able to implement price increases in Europe next year. The global trend is for TiO2 demand to grow in line with gross domestic product (GDP).
Cristal, which acquired Lyondell's TiO2 business this year, plans to expand its Saudi plant to 300,000 tonnes/year by 2010. It is also planning a $20m expansion of ultrafine TiO2 in Thann, France. Huntsman, which is being acquired by Hexion, plans to add 50,000 tonnes/year of capacity in the UK.
Major global titanium dioxide capacity, '000 tonnes/year
|DeLisle, Mississippi, US||300|
|Edgemoor, Delaware, US||155|
|Kwan Yin, Taiwan||125|
|New Johnsonville, Tennessee, US||380|
|Huntsman Tioxide||Calais, France||100|
|Teluk Kalung, Malaysia||56|
|Umbogintwini, South Africa||25|
|Varennes, Quebec, Canada||90|
|Louisiana Pigments||Lake Charles, Louisiana, US||146|
|National Titanium Dioxide (Cristal)||Ashtabula, Ohio, US||215|
|Baltimore, Maryland, US||50|
|Le Havre, France||65|
|Yanbu, Saudi Arabia||120|
|Tiwest||Kwinana, Western Australia||110|
|Tronox||Botlek, the Netherlands||90|
|Hamilton, Mississippi, US||225|
|Savannah, Georgia, US||110|
|Uerdingen, Germany||107SOURCE: ICIS|
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