Europe TiO2 producers target €300/tonne January hike

01 December 2011 14:51  [Source: ICIS news]

LONDON (ICIS)--Tronox is targeting a €300/tonne hike on titanium dioxide (TiO2), effective 1 January, based on soaring upstream ilmenite costs, a company source said on Thursday.

This follows a similar announcement by another US-headquartered manufacturer, Huntsman, last week, as TiO2 producers bemoan raw material costs at least doubling year on year heading into 2012.

“It [the raw material increase] looks nasty,” said one manufacturer. “This increase is a necessity.”

However, TiO2 buyers and traders are more sceptical that these increases will go through in January, as demand is lacklustre amid the precarious economic situation and a traditional lull during the downstream coatings low season.

Buyers maintain that TiO2 values are most likely to roll over in January, before probably rising around March, when the coatings season usually starts.

It may be the case that buyers that received smaller increases in the fourth quarter of 2011 will be required to take on rises in January.

Producers had targeted hikes of up to €500/tonne ($676/tonne) for the fourth quarter, but several customers were able to negotiate increases of just €200–300/tonne increases. These are the buyers that may be most susceptible to the targeted increases in January, suggested one consumer.

European prices are currently pegged at €2,950–3,300/tonne FD (free delivered) NWE (northwest Europe).

Tronox is also targeting hikes of $300/tonne and $350/tonne in Asia and Latin America, respectively.

($1 = €0.74)

For more on TiO2, visit ICIS chemical intelligence
By: Amandeep Parmar
+44 208 652 3214

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