12 January 2012 15:31 [Source: ICIS news]
LONDON (ICIS)--European titanium dioxide (TiO2) producers are hoping that the mild winter will entice downstream paints and coatings manufacturers back into the market earlier than usual, they said on Thursday.
The outdoor coatings season usually starts around April when the weather improves, but the unusually high temperatures seen this winter could see demand pick up as soon as late February/early March, according to some buyers and sellers.
Also, some downstream sectors such as road marking coincide the beginning of their season with Easter, which is early this year – on 8 April – compared to 24 April in 2011, according to one TiO2 buyer.
“For sure it [the season] will start earlier than last year,” the buyer said.
TiO2 manufacturers increased prices by €200-300/tonne ($253-380/tonne) in the fourth quarter of 2011, but because of weak demand this was still short of their plus- €500/tonne targets in order to keep up with the almost doubling of upstream ilmenite and rutile costs heading into 2012.
They are therefore looking for a swift recovery to help bring revenues back up.
However, several TiO2 producers and customers are not so sure things will improve so soon, as buying interest remains lacklustre amid ongoing concerns over the debt crisis in southern Europe.
This uncertainty is causing end-users to refrain from spending any more than is absolutely necessary, and few expect the situation to significantly improve in the first quarter of this year at least.
“We have had a mild winter so far but if you’ve not got enough money to build or paint your house then why should it [demand] increase?” said one TiO2 manufacturer.
TiO2 prices for the fourth quarter of 2011 were at €2,950-3,300/tonne FD (free delivered) NWE (northwest Europe).
($1 = €0.79)
For more on TiO2 visit ICIS chemical intelligence
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