PPG anticipating flat to moderately higher TiO2 pricing in 2013

15 January 2013 00:01  [Source: ICIS news]

HOUSTON (ICIS)--PPG Industries expects flat to moderately higher North American titanium dioxide (TiO2) pricing in 2013, the US-based chemicals and coatings firm said on Monday.

“We’re looking for a more balanced outlook for raw materials as we look ahead,” CEO Charles Bunch said during an earnings call.

“Even though we’re seeing a declining trend in TiO2 pricing, it’s being offset by continued inflation,” he added. “We have seen TiO2 declines since the beginning of the second quarter of last year when they hit a peak.”

The company is looking at more balanced or flat raw materials, with declines in TiO2 offset by what appears in the first quarter of 2013 to be some pressure on the organic side of the raw material basket, he said.

Sources said January propylene contracts are poised to increase by as much as 15 cents/lb. And Bunch said PPG likely will implement some price increases this year to recoup upstream gains.

The company reported that its fourth-quarter 2012 net income rose 5.1% year on year to $227m (€170m) on strong coatings business performance.

PPG said it will also continue to reduce its dependence upon TiO2.

“When we made those announcements regarding improvements in using TiO2 more efficiently in 2012, we said 4-6%,” Bunch said. “In 2012, we accomplished that at the lower end of the range, and we think we still have in 2013, an opportunity to improve our utilisation at the lower single-digit target level.”

For the full year, the company is optimistic that positive trends are going to continue in 2013, including housing and construction data, Bunch added.

“We’re seeing a lot of anecdotal information about certain markets,” he added. “The housing resale market is strengthening, and there is an increase in new-home construction permits and starts. Overall, I’d say we’re pretty optimistic.”

($1 = €0.75)

By: Larry Terry
1 713 525 2653

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