28 March 2013 16:48 [Source: ICIS news]
LONDON (ICIS)--European titanium dioxide (TiO2) demand could improve during the second quarter of 2013 and as a result price increases are likely in the third quarter, but not before, sources said on Thursday.
Although most European producers have announced price increase targets in March, they are unlikely to be passed on in the second quarter because demand is still poor and supply is plentiful.
Traders agreed prices during the second quarter will roll over as it is still a buyers' market with plentiful supplies and low prices. However, the third quarter could bring small increases on the back of improved demand.
Producers have reduced operating rates and inventory levels have steadily declined since the beginning of the year. Currently sellers hold enough stocks for about 70 days, down from 90-120 days last year.
Demand in southern Europe is particularly poor, however, one producer was hopeful the situation will improve in Europe during the second half of the year.
A coatings producer was certain that during the second quarter there will not be a price increase and the recent announcements by sellers were only to stop further price erosion. Prices could increase during the third quarter, but even then it will not be anywhere near the €0.20/kg ($0.26/kg) targeted by suppliers in March.
Contract negotiations will continue next week.
($1 = €0.78)
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