FocusAsia’s TiO2 prices likely to remain stable in Q2 – sources

23 April 2013 08:50  [Source: ICIS news]

By Christina Siantar

Asia’s TiO2 prices likely to remain stable in Q2SINGAPORE (ICIS)--Asia’s rutile-grade titanium dioxide (TiO2) prices are likely to remain stable in the second quarter on the back of range-bound discussions as prices are expected to have bottomed out after a year of decline, market sources said on Tuesday.

Prices have fallen by approximately 30% year on year, from an average of $4,150/tonne (€3,196/tonne) CFR (cost & freight) Asia to $2,900/tonne CFR Asia currently, according to ICIS. TiO2 prices were assessed at $2,700-$3,100/tonne CFR Asia on 19 April.

The price decline was due to abundant supply brought about by poor downstream demand given the weak global economy, the sources said.

In 2012, China’s total import volume is estimated to be around 160,340 tonnes, down by 30% from 228,600 tonnes in 2011, according to data released by the China Customs.

The long supply that Asia’s TiO2 market faced in 2012 was aggravated by capacity expansions in the key China market, industry sources said.

The estimated production growth in China from 2011 to 2012 is around 160,000 tonnes/year and additional capacities estimated at 1m tonnes/year will start coming on stream from 2013, according to Chemease, an ICIS service in China. China’s total TiO2 production capacity is estimated at 2.78m tonnes/year at present.

Suppliers are facing squeezed margins after the persistent price declines since the second quarter of 2012, and are reluctant to cut their prices further, they said.

The typical seasonal demand peak period in Asia for the downstream paints and coatings industries in June is likely to support TiO2 prices in the region, sources said.

“Sellers are firm on their pricing. Demand for paints is improving and I think [prices are already bottoming out],” said a southeast Asian buyer.

“The India market is flat. In general, it is difficult to increase prices, but prices won’t go down as well,” said an Indian seller.

Locally-produced TiO2 in India were offered at around Indian rupees (Rs)165/kg ($3/kg) EXW (ex-works), with discounts of Rs7-20/kg given to some buyers, depending on the volume purchased.

In the key domestic China market, industry players held a bearish sentiment because the prices of locally-produced TiO2 are falling as sellers have inventory pressure, sources said.

Locally-produced rutile-grade TiO2 in China was priced at around yuan (CNY) 14,400-15,000/tonne ($2,330-2,427/tonne) EXWH (ex-warehouse) during the week ended 19 April.

Despite falling domestic prices, China-based market participants feel that import prices will be largely stable as regional suppliers are reluctant to reduce their prices into China on the back of eroded margins and improved demand expected in other Asian regions.

TiO2 is a colourless-to-white crystalline powder pigment used in products such as paints, coatings, plastics, paper, food and cosmetics.

($1 = €0.77, $1 = Rs54.22, $1 = CNY6.18)

Additional reporting: Yu Xiao Hui

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Christina Siantar
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