US Kronos sees tight supply, raw materials driving TiO2 prices

09 May 2012 17:12  [Source: ICIS news]

HOUSTON (ICIS)--Kronos expects tight supplies and high raw material costs to further drive up titanium dioxide (TiO2) product prices, the CEO of the US-based producer said on Wednesday.

In the 2012 first quarter, Kronos’s average TiO2 selling prices were up 31% year on year from the same period a year ago.

“We believe very strongly that we are going to see much more significant price increases for TiO2 products,” CEO Steven Watson told analysts during Kronos's first-quarter results conference call.

Prices will be supported by the fact that there will be only limited industry capacity additions, given the high cost of additional investments and the closely-held rights for chloride-based TiO2 production technology, Watson said.

At the same time, high raw material costs are driving TiO2 selling prices, but they also add pressure to industry margins, which are not at a level that would justify the $1bn-plus cost for a new state-of-the-art TiO2 plant, he said.

“Without [large price increases], we doubt very much that anyone would be looking at putting major capacity expansions in,” he added.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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