08 July 2010 22:47 [Source: ICIS news]
HOUSTON (ICIS news)--The latest titanium dioxide (TiO2) price-increase initiative for 1 August from Kronos for material sold outside of North America and Europe will also pressure domestic prices upwards, buyers said on Thursday.
Kronos recently announced the price hike of $200/tonne (€158/tonne) for its TiO2 sold in Asia, Latin America, the Middle East and Africa, citing faster-growing demand in those areas. At least two other producers had proposed increases of $150-$175/tonne in those and other regions, effective 1 June or 1 July.
Demand for exports to Asia makes supply tighter in the US, a domestic paintmaker said. Short supply and the fact that some of the paintmaker’s suppliers are importing higher-priced acrylics and other raw materials also means its paint prices will have to rise, the source said.
Although the paint producer would not comment on the size of its price increases, an industry analyst has predicted that paint prices could rise by as much as 5% by year’s end because of upstream supply tightness and cost pressure.
Kronos previously announced a $150/tonne effort for the same regions, effective 15 April, which was fully implemented before the end of the second quarter, the producer said.
Meanwhile, prices have continued to rise in Asia amid stronger sales and tight supply.
“TiO2 demand has been growing at a much faster pace in Asia, Near East and Latin America than in Europe or North America,” a producer said. “TiO2 users (in Asia) are concerned about future supply and, as a result, when prices are discussed, an agreement is reached very soon.”
Supply constraints continue in North America, and producers say they cannot yet build inventory despite running at full rates.
Domestic TiO2 capacity was severely reduced by as much as 400,000 tonnes in 2009, by some estimates, during prevailing poor market conditions last year as production was idled and product was increasingly exported amid predictions of a weak 2010.
North American TiO2 prices recently moved up by 5 cents/lb on tight supply and unexpected demand. One buyer said its supplier asked to postpone a recent truckload order until late August, a lead time of nearly two months.
However, most buyers said only 3-5 cents/lb of June initiatives of 8 cents/lb from the major producers was likely to be achieved by 1 September because most predicted a softening of domestic TiO2 demand and easing of supply constraints by that time.
The current TiO2 price range in North America was $1.22-1.39/lb, as assessed by ICIS.
Other US suppliers of TiO2 including DuPont, Cristal, Huntsman and Tronox.
($1 = €0.79)
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