TiO2 industry need to adapt and become more agile - MD

30 April 2013 19:59  [Source: ICIS news]

LONDON (ICIS)--The global titanium dioxide (TiO2) industry will need to adapt and become more agile as Chinese demand is expected to increase, a director for the miner Rio Tinto said on Tuesday.

"The industry needs to adapt by improving efficiency, technology and competitiveness," said Jean-Francois Turgeon, managing director at Rio Tinto Iron & Titanium.

He made his comments at the Barcelona TiO2 summit, and they came in response to increasing demand from China.

"China is importing more and more raw materials, so if you are a raw material supplier, you will want to have a strategy to tackle China," Turgeon said.

He added: "You will want to be an important player in the future of China, and that is our intention at Rio Tinto to remain an important participant."

China consumes 33% of global TiO2 output, and it has a little more than 33% of global TiO2 production capacity. This is expected to rise in the next five to 10 years.

Chinese TiO2 manufacturers use the sulphate manufacturing process, which is lower in cost and which produces somewhat lower-quality material than the alternative chloride-process, mostly used in North America and parts of Europe.

During the past 18 months, high feedstock costs put the global TiO2 industry under a lot of pressure. At the same time, TiO2 prices and consumption dropped significantly.

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. 

This was preceded by sharp price increases during 2011, when supply was short and feedstock costs skyrocketed, making the market tight and the prices high. 

Supply normalised and offtake reduced during 2012 as buyers began to destock and waited for further price reductions. Buying interest failed to improve ever since.

There is little hope for demand to increase in the near-term as even the arrival of warmer weather has helped little to improve sales, market participants said. This is because construction and automotive 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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