Price and market trends: North American Q2 TiO2 initiative given low odds of success

01 March 2013 09:08  [Source: ICB]

North American titanium dioxide (TiO2) buyers on 19 February panned a producer's announced effort to get a second-quarter price increase within the tepid and oversupplied domestic pigment market.

Kronos said it plans to raise its North American TiO2 prices by 10 cents/lb ($220/tonne, €165/tonne), effective 1 March. Most buyers have 90-day price protection, meaning increases would not likely be implemented until 1 June.

The company also announced plans to increase its prices in Europe by at least €200/tonne and by $250/tonne in Europe's dollar markets and other regions outside Europe and North America.

CRITICAL BUYERS

"Dead on arrival," a buyer said when asked about the North American initiative's chance of success.

Another buyer said: "My take is that they are trying to stop the decline, and that prices will not actually increase."

A third buyer agreed the effort was probably designed to halt weakness in domestic TiO2 prices, which slipped by 20 cents/lb in the fourth quarter of 2012 alone.

"There is no reason for an increase now," another buyer said. "I think they are just trying to make it interesting."

Although first-quarter decreases of 10-13 cents/lb have been heard, the first-quarter range has not yet been settled. Prices remain at the fourth-quarter level of $1.55-1.70/lb, as assessed by ICIS.

Although most producers remain reticent, most sources expect price-hike efforts to become more prevalent in the second half of the year.

A buyer also said it believes producers are sitting on three to four months of inventory. Producers have neither confirmed nor denied this assertion.

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


By: Larry Terry
1 713 525 2653



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