More closures likely in titanium dioxide sector - consultant

17 December 2009 12:30  [Source: ICIS news]

LONDON (ICIS news)--Further restructuring of the global titanium dioxide (TiO2) industry is inevitable, Reg Adams of UK consultancy Artikol told ICIS news on Thursday.

Three plants in Spain, France and Italy could be candidates for closure, Adams said, particularly if Huntsman emerges as the winner for Tronox’s TiO2 plants, which are due to go up for auction on 21 December. “The move will affect the shape of the global industry in the future,” Adams added.

Huntsman has put in a stalking-horse bid for three plants, namely Hamilton, Mississippi, US; Kwinana, Australia; and Botlek, the Netherlands.

A stalking-horse bid sets a price floor for the subsequent auction. Huntsman could acquire the plants if no one makes a higher bid and if its offer is approved by the court.

Plants have already closed in the UK and France in the past two years and three facilities have been idled in France and the US.     

Adams said that there was an improvement in demand for TiO2 in late 2009 and he predicted that the industry would rebound in 2011, perhaps seeing growth of 3.5%.

He estimated that global demand growth will average 2.7%/year in the 10 years to 2019. “There is a lot of potential in India in the next 10 years and China will continue to grow at an estimated 5%/year,” said Adams.

China would remain a significant import market, particularly for chloride-based pigment to serve the automotive industry. The country imported 250,000 tonnes of top-quality chloride pigment in 2009, according to Adams.

Current production capacity in China is 1.1m tonnes/year and Adams said the Chinese government wanted to reach 1.6m tonnes/year by the end of 2012.

Several expansions are planned in China and two greenfield joint venture projects are planned by US major DuPont and Australia’s Astron.

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By: Elaine Burridge
+44 20 8652 3214

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