09 February 2012 15:20 [Source: ICIS news]
LONDON (ICIS)--A safety report on Cristal Global’s downed titanium dioxide (TiO2) plant in the UK is due this week, which will determine when it will be able to resume production, players said on Thursday.
The 150,000 tonne/year facility went off line following a titanium tetrachloride (TiCl4) leak on 2 November last year, and this is not the first time in recent memory this has happened.
The Saudi Arabia-headquartered producer also suspended operations at the site near Stallingborough between March and August 2010 when one of the pressurised containers ruptured and started leaking TiCl4.
The UK's Health and Safety Executive has been investigating the leaks and, depending on the outcome of its report, the plant could be back on line by the end of February, TiO2 players said.
However, one TiO2 buyer said that while the plant could be back up and running in two weeks, it will take another couple of weeks for them to clear the order backlog and start producing normally again.
Fortunately, the outage has come at a time when demand is low, and so hasn’t caused much disruption to the market.
A combination of seasonal factors, end-users destocking towards the end of last year, and cautious sentiment amid the eurozone debt crisis, has meant other TiO2 producers have been able to pick up any shortfall in supply.
However, one buyer said that, despite there being no shortage, the outage has propped up TiO2 values somewhat.
Cristal has been forced to import product from Australia and other regions at high cost to supply contracted customers, but once the plant is back on line it will have the volumes to compete on price and bring numbers down, the buyer said.
TiO2 prices in Europe went up by €0.05-0.10/kg ($0.07-0.13/kg) in the first quarter of 2012, to €3.00-3.40/kg FD (free delivered) NWE (northwest Europe) because of soaring upstream rutile and ilmenite costs.
Cristal was not immediately available to comment.
($1 = €0.75)
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