US TiO2 price-fixing suit gets class status, seeks more buyers

21 December 2012 21:07  [Source: ICIS news]

US TiO2 price-fixing suit gets class status, seeks more plaintiffsHOUSTON (ICIS)--US titanium dioxide (TiO2) buyers are seeking more companies to join their price-fixing lawsuit, to which a judge recently granted class-action status.

Given the number of TiO2 customers, the number of companies that could join the lawsuit is huge, according to court documents. At least 700 TiO2 buyers were affected by the alleged price fixing.

The lawsuit was initially filed in February 2010 by Haley Paint in US District Court, Maryland District.

Haley sued DuPont, Huntsman Kronos and Millennium Inorganic Chemicals, accusing them of fixing TiO2 prices from 1 February 2003 to the present.

A fifth TiO2 producer, Tronox, was not named in the lawsuit because, at the time, it was operating under Chapter 11 bankruptcy protection. Tronox has since emerged from bankruptcy protection.

Regardless, Haley still alleged that Tronox cooperated with the other producers.

TiO2 producer Huntsman said "there is absolutely no merit to the case. There was no conspiracy to fix TiO2 prices".

TiO2 producers Millennium Inorganic Chemicals did not immediately respond to a request for comment. Millennium is owned by Cristal Global.

Other producers declined to comment as they typically do not discuss pending litigation.

Altogether, Tronox and the other producers control about 70% of global production capacity, Haley said in its lawsuit. The companies controlled all capacity in North America and nearly all capacity in western Europe.

Such command of the market helped the companies fix prices, Haley alleged.

The producers were also helped by the high cost of entering the TiO2 market, Haley alleged. A new plant costs $450m-500m (€342m-380m) and requires three to five years to build.

Haley alleged that the TiO2 industry had many characteristics that made it conducive to price fixing, such as a small number of producers and a product that is similar regardless of who makes it.

In addition, many customers buy TiO2, Haley said. The pigment is a product that makes up a small portion of their costs, and it does not have a practical substitute, Haley alleged.

During the time of the lawsuit, Haley accused the producers of raising prices in spite of flat demand, lower costs and excess capacity

Haley alleged that the TiO2 producers coordinated their price increases through announcements and during industry meetings.

As a result, customers paid higher prices for TiO2 than they would have paid in a competitive market, Haley alleged.

($1 = €0.76)


By: Al Greenwood
+1 713 525 2645



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