17 February 2011 14:05 [Source: ICIS news]
LONDON (ICIS)--Huntsman announced a €175/tonne ($236/tonne) hike on European titanium dioxide (TiO2) second-quarter contracts on Thursday, amid tight supply and feedstock shortages.
Huntsman's move follows Cristal Global’s €150/tonne price initiative declared on 9 February, and although other producers were yet to offer concrete figures, many felt they would aim for similar levels.
“All producers will be looking to follow after Cristal,” said one trader.
A multitude of factors were cited for the price rises, including the long-term tightness seen in the market, due to strong demand and capacities having been reduced during the recession.
Buyers and sellers said they feared that the tightness was only likely to get worse due to recovery in the downstream construction and manufacturing sectors, and 1.5% growth was predicted in European TiO2 demand by one producer.
In the short term, customers were already gearing up for the traditional peak season in the downstream paints and coatings industry, which was set to get underway towards the end of March.
“It is very tight and looks like it will only get worse,” said one buyer.
TiO2 feedstock costs were also rising, particularly for smaller producers using the sulphate process to manufacture the product, as upstream ilmenite and slag were both in short supply.
($1 = €0.74)
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