TiO2 players fear for Tronox on delisting move

25 September 2008 16:56  [Source: ICIS news]

LONDON (ICIS news)--Players in the titanium dioxide (TiO2) market are concerned for the future of US-based Tronox after New York Stock Exchange (NYSE) Regulation Inc said it will suspend its listing on 30 September, market sources said on Thursday.

Higher manufacturing costs and production issues were the main cause of Tronox's recent negative performance, which had seen the value of its share plummet, said market sources.

“Tronox is a victim of inflation and highlights the problems that all producers are facing,” said a producer. "Many in the industry are writing red figures, only the major suppliers can afford to absorb the extra costs."

Said a trader: “This is bad news for everyone in the industry.

“Customers are concerned with securing volumes, weak producers are not something that many want to ally themselves with as there is no security,” added the trader, who speculated that the weak dollar rate was also behind the fall of Tronox.

While producers continued to push for further hikes in the European market, one supplier reflected that many “hadn’t been able to push through the increases [producers] need and this is the result”.

Added a buyer: “If Tronox continues to experience problems it will have a significant effect on the market.

“There is still a big call for sulphur-process TiO2. Declines in production will create a significant shortfall in the market,” added the buyer.

Tronox was unavailable for comment but earlier this week announced its plans to implement further hikes of $150/tonne for all TiO2 grades in Latin America.

NYSE Regulation Inc said that Tronox’s common Class A and B stock could be removed from the exchange after it fell below the NYSE’s $25m threshold for a company’s average global market capitalisation in a 30-day trading period.

As of 19 September, the total average market capitalisation of both Tronox’s Class A and B stock stood at approximately $22.2m, with the average closing price falling below $1 a share over a consecutive 30-day trading period.

The company had already been given a 45-day notice period to provide the exchange with a business plan that demonstrated it could restore its stock value within 18 months after its worth fell below $75m during a 30-day period ending August 2008.

The latest blow to the ailing company comes just after it was faced with a $280m bill from the US Environmental Protection Agency (EPA) which claimed that the company was responsible for the costs of cleaning up a wood treatment plant in New Jersey that closed more than 50 years ago.

For more on TiO2 visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stephanie Wilson
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly