DuPont seeks 15 cent/lb N America TiO2 April increase on supply

24 February 2011 23:43  [Source: ICIS news]

HOUSTON (ICIS)--DuPont announced on Thursday that it would raise its North American titanium dioxide (TiO2) price by 15 cents/lb ($331/tonne, €241/tonne) effective 1 April, drawing scoffs from some buyers despite tight supply and raw material cost pressure.

The new price initiatives, if successful, would be implemented on 1 July.

Buyers were shocked by the announcement from DuPont, although analysts and other market sources have said producers are likely to maintain their market advantage for the near term, given tight supply and pressure on some raw materials.

“I just can’t see it. I can’t believe all of this one is going to stick,” a buyer in the architectural coating segments said. “If people have been smart, they’ve been producing paint, so in July they won’t need to buy much TiO2 or take this increase.”

He predicted sellers would have a difficult time pushing the price increase through unless they are finding more competitive foreign markets for their TiO2.

Another buyer predicted a soft spring coatings season this year, which would give buyers more leverage at the negotiating table this summer. He also said all the price gains of the past two or three quarters have been margin enhancement because “this is the producers’ time to make money".

Asked if the pricing run-up would diminish demand, one buyer said, “Yes, these small guys that buy pallet quantities - they’re getting gouged, and sooner or later it’s going to take its toll.”

Current initiatives from major domestic producers seeking hikes of 10 cents/lb effective 1 January will be implemented on 1 April, but several buyers said they are fighting to reduce those anticipated increases by 1-2 cents/lb.

North American prices TiO2 were assessed by ICIS at $1.30-1.44/lb.

Other major North American TiO2 producers include Huntsman, Cristal, Kronos and Tronox.

($1 = €0.73)

For more on TiO2 visit ICIS chemical intelligence
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By: Larry Terry
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