Europe Q2 TiO2 prices rise to €2.50–2.75/kg on tightness

01 April 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European titanium dioxide (TiO2) second-quarter contract prices spiked by an average of €0.20/kg ($0.29/kg) due to structural shortages in the market, buyers and sellers said on Friday..

Increases of €0.15–0.25/kg were announced, depending on the manufacturer, and they all claimed success in obtaining these targets in full as customers were desperate for material.

Buyers said there was little room to negotiate and few can see the situation improving as the market is set to remain chronically short, particularly with the traditional peak season in the coatings sector getting underway.

TiO2 prices are now set at €2.50–2.75/kg FD (free delivered) NWE (northwest Europe), meaning prices have spiked by 29% since the first quarter of 2010, according to ICIS

The amount customers paid largely depended on their size and end-use segment. Paints and coatings producers charged a little less, while paper manufacturers were at the higher end of the range.

With a couple of European plants shut down indefinitely during the recession, there has not been enough capacity to satisfy demand as the economy recovers.

Domestic manufacturers are also reluctant to commit to building new capacity, given shortages in feedstock titanium ore. One TiO2 producer was said to be operating at just 50% of capacity due to these upstream issues, according to sources.

Players said it was therefore likely that prices will continue to rise until at least the fourth quarter, when the coatings season usually quietens down due to the weather.

($1 = €0.70)

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By: Amandeep Parmar
+44 208 652 3214

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