Surcharge removed for European TiO2 buyers

29 January 2009 15:43  [Source: ICIS news]

LONDON (ICIS news)--Buyers in the European titanium dioxide (TiO2) market saw some relief on January and first-quarter contract prices as the majority of energy surcharges were finally scrapped from invoices, sources confirmed on Thursday.

Initially implemented in the third quarter of 2008 as a result of record high crude oil prices of up to $147/bbl and rocketing freight, feedstock and energy costs, the surcharge remained in force for many consumers until January.

While the majority of buyers expressed their satisfaction with numerous suppliers’ decisions to eliminate the charge, some maintained that it was unfair of suppliers to keep the surcharge in place towards the end of the fourth quarter, when oil and feedstock prices began to come off sharply.

“The energy surcharge argument was a complete fallacy,” said one consumer.  

Sellers, however, rebuffed these arguments

“The cost of energy remained high and our feedstock prices were not directly tied to oil values,” said one manufacturer.

“At current [TiO2] price levels we are still biting into our margins as raw materials are still costly,” said another seller.

The surcharge was pegged at an average of €30/tonne ($40/tonne) by most sources in the market, although others said it was closer to €50/tonne, depending on location.

($1 = €0.76)

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By: Stephanie Wilson
+44 20 8652 3214

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