North America Q2 TiO2 prices rise amid concessions

30 March 2012 19:47  [Source: ICIS news]

HOUSTON (ICIS)--North American TiO2 contract values rose by about 10 cents/lb ($220/tonne, €165/tonne) for the second quarter, market sources said on Friday.

But sellers conceded 5 cents/lb of the total 15 cents/lb they had sought for the period. Producers did not comment on the reduction, but it was the second 5 cent/lb concession within the first half of 2012.

First-quarter initiatives of 15 cents/lb were held to gains of 10 cents/lb, despite producers citing pressure from rising ilmenite ore costs.

The increase takes North American TiO2 prices to a new range of $2.00-2.12/lb, as assessed by ICIS. Sources said the 10 cents/lb was fully applied at the low end of the range, with an average of 8 cents/lb applied at the top end.

Citing ongoing pressure from rising ore prices, producers also have announced plans to raise third-quarter prices by 20 cents/lb. The effective date for those proposals is 1 April, which means any increases would be implemented on 1 July after typical 90-day price protection.

Buyers said the latest compromise reflected weak market fundamentals including soft demand, ample supply and an improved-but-not-robust outlook for the spring coatings season.

“I still think the 10 cents is too much,” a buyer said. “I was hoping they’d come off more or push it out altogether. They just couldn’t justify the full 15 cents with current market conditions.”

Customers also insisted that ore costs are not pressuring what they perceive as healthy margins for TiO2 producers. However, a buyer said producers have contended that with ore costs escalating, they are back to “just breaking even”.

Last year at this time, supply constraints were feeding frequent and sharp price increases, and producers said the priority among buyers was obtaining needed volume, with price a secondary consideration.

North American TiO2 producers include DuPont, Cristal, Kronos, Huntsman and Tronox.

($1 = €0.75)

For more on TiO2, visit the ICIS Plants & Projects database

By: Larry Terry
1 713 525 2653

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