02 March 2011 23:29 [Source: ICIS news]
HOUSTON (ICIS)--North American titanium dioxide (TiO2) price-hike initiatives of 15 cents/lb ($331/tonne, €242/tonne) from most major domestic producers prompted buyers to warn on Wednesday that the architectural-coatings market will weaken beneath the pressure of escalating prices.
“It’s insane,” a buyer said of the latest round of price-hike efforts that first surfaced from DuPont during the last week of February. “It’s definitely going to slow down the housing market.”
US architectural coatings demand stems largely from the already weak home construction and repaint market, but it is also commonly used in plastics, paper, inks, fibres, foods, pharmaceuticals and products such as cosmetics and toothpaste.
Major TiO2 producers Cristal, Kronos and Huntsman announced identical increases for ?xml:namespace>
There was not yet confirmation of a domestic price-hike effort from Tronox, though the company recently announced increases of €225/tonne or $300/tonne in the dollar markets of Europe, Africa and the Middle East, $300/tonne in Asia Pacific and Latin America, Australian dollar (A$)300/tonne in Australia and yen (Y)40/kg in Japan.
Some buyers insisted they could not pass along continually rising costs, but one TiO2 customer said it had already sent its sales staff out seeking higher prices for its products because of higher TiO2 costs.
“Everybody can use more TiO2,” another buyer said. “It just depends on how much customers are willing to pay. And if they’re not willing, then business will slow down.”
The buyer suggested the newest price efforts, which would be implemented on 1 July, would be fully successful or perhaps slip by as little as 5 cents/lb only because customers still have few sourcing options.
Meanwhile, current January initiatives of plus 10 cents/lb are poised to be implemented on April 1 at the full increase, though several buyers are still attempting to negotiate reductions of 1-2 cents/lb.
Current North American prices TiO2 were assessed by ICIS at $1.30-1.44/lb.
($1 = €0.73)
For more on TiO2, visit ICIS chemical intelligence
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