TiO2 capacity reductions possible - industry expert

30 April 2013 19:08  [Source: ICIS news]

LONDON (ICIS)--There is potential for capacity reductions in the North American and western European titanium dioxide (TiO2) markets as a result of oversupply and low consumption rates, the CEO of business management company IBMA said on Tuesday. 

"Smaller sulphate-process plants will shut down as producers will try to reduce overcapacity," Jim Fisher said while speaking at the Barcelona TiO2 summit. 

The global TiO2 industry has been through a rollercoaster ride in the past two years with huge reductions in prices and consumption and high raw material costs squeezing producers. 

"There are several issues affecting the TiO2 industry globally," Fisher said. "There is too much pigment capacity; it costs more to shut a plant down than to keep it running; and capacity utilisation rates are low at 75%, which is where they are likely to remain in the near-term."

TiO2 sales in Europe dropped sharply during 2012 because of a decrease in demand from the downstream construction, coatings, automotive, paper and plastics industries. 

As a result, European TiO2 prices dropped from €3.00-3.40/kg ($1.79-2.03/lb) FD (free delivered) NWE (northwest Europe) in March 2012 to €2.35-2.50/kg FD NWE in April 2013. 

TiO2 prices increased during 2011 as supply was short and feedstock costs skyrocketed, making the market tight and prices high. 

This changed in 2012 when demand dropped sharply and market participants began to destock and wait for further price reductions.

There is little hope for demand to increase as even the arrival of warmer weather has helped little to improve sales. This is because construction output across Europe has been declining in recent months as a result of the ongoing macroeconomic slowdown.  

Some delegates at the conference expect that demand will slowly start to increase during the second half of 2013. 

The conference runs from 30 April to 2 May. 

($1 = €0.76) 

Follow Janos Gal on Twitter @janosgalICIS 


By: Janos Gal
+44 208 652 3214



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