US buyers reticent on new TiO2 price-hike initiatives

10 September 2010 08:29  [Source: ICIS news]

HOUSTON (ICIS)--Some titanium dioxide (TiO2) buyers were at a rare loss for words on Thursday when asked about the recent spate of North American price-hike initiatives, including the latest announcement from Kronos and an amended proposal from Cristal.

On Wednesday, Kronos announced its plan to raise North American prices by 8 cents/lb ($176/tonne, €139/tonne) effective 1 October.

Cristal announced price increases in Asia Pacific and Australia and amended its latest North American price push to bring it in line with domestic gains sought by other major producers.

The other major producers - Huntsman, Tronox and DuPont - announced similar initiatives for North American product effective in September or October, citing tight supply and steady demand.

All the producers had sought similarly-timed hikes in regions around the world, as well.

"I haven't had time to digest that yet," one buyer said of the new round of North American initiatives, noting that he was still completing price talks over June increase proposals of 8 cents/lb.

But other buyers were adamant that further hikes were not justified, given export levels from the US to supply-constrained destinations such as Asia.

"We're going to argue for no increase, but I don't yet know where we'll end up," a customer said.

But supply was the crux of the matter. "Despite the coming seasonal slow-down," one producer said, "there is
simply not enough pigment in inventory, and the output will not even cover the backlog of orders."

As the current 8 cent/lb increases were being implemented easily enough, participants who were unsure about the market situation in the fourth quarter had decided to review their pricing, hence the September and October efforts, the producer said explaining the current situation.

Some buyers said they had accepted the full increase from June, but other buyers were not yet conceding full acceptance.

Several buyers said demand could remain steady and keep pressure on supply through the end of the year as customers were likely to continue efforts to rebuild vital inventories ahead of next spring's coatings season.

But several buyers said repaints, rather than new-home construction, were primarily driving demand in the relatively soft architectural coatings end market.

Current domestic TiO2 prices were in a range of $1.22-1.39 cents/lb. US TiO2 suppliers include Cristal, Huntsman, Kronos, Tronox and DuPont.

($1 = €0.79)

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By: Larry Terry
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