High TiO2 prices may raise demand for substitutes - Dow CEO

28 October 2010 21:12  [Source: ICIS news]

HOUSTON (ICIS)--Record-high prices for titanium dioxide (TiO2) could cause paint producers to develop new formulations that use substitutes for the pigment, Dow Chemical chief executive Andrew Liveris said on Thursday.

Dow produces such a TiO2 substitute, Ropaque - a hollow-sphere polymeric pigment that is made with a styrene-acrylic copolymer.

"We at Dow have innovations that can help them," Liveris said during a third-quarter earnings conference call.

"They can reformulate, and we actually have substitutes for TiO2 out there already that will be very beneficial for them to get away from what's going on in the TiO2 area," he said.

TiO2 already has reached record highs, and it could rise by 20-30% in 2011.

Moreover, TiO2 is a major component of paint, making up 21-22% of the total raw material costs for US producer Sherwin-Williams.

Paint producers are also contending with a shortage of acrylics, which should continue for some time, Liveris said.

Also, the US housing market will likely remain weak well into 2011, he said.

"Our customers are under a lot of pressure, and their margins are being compressed," Liveris said.

"What you are going to see is a lot of companies working harder with their suppliers like us to do reformulates, to do different types of ingredient mixes to accommodate what is tightness in the upstream," he said.

For more on Dow Chemical visit ICIS company intelligence
For more on TiO2 visit ICIS chemical intelligence
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By: Al Greenwood
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