Kronos seeks domestic Q3 TiO2 increase, buyers doubtful

09 May 2013 21:25  [Source: ICIS news]

HOUSTON (ICIS)--Third-quarter North American titanium dioxide (TiO2) price-increase efforts are unlikely to succeed, buyers said on Thursday.

At least two producers have announced plans to raise prices by 10 cents/lb ($220/tonne, €168/tonne) during the period - the most recent being Kronos, which seeks a 10 cent/lb hike effective 1 June. With 90-day price protection common in the domestic market, a successful effort would not be implemented until 1 September.

Cristal previously announced its plan to increase third-quarter prices similarly in North America.

Buyers are sceptical, at best.

“The third-quarter increase… is pretty much a non-issue,” a buyer said. “Even though [producers] will tell you it isn’t.”

“I do not see any price changes for the third quarter,” another buyer insisted.

Although customers agree among themselves that typical spring demand for coatings has yet to surface, some say there has been incremental improvement as summer approaches - just not enough to warrant near-term price increases.

Producers were mostly quiet on the subject of price-hike efforts, but first-quarter earnings news did not bolster their positions.

Tronox recently reported a first-quarter net loss of $57m, compared with a net income of $86m in the same quarter a year ago.

Higher cost of sales sharply diminished gross margins, but Tronox said it has seen volume increases for two consecutive quarters and believes this may signal recovery in the second half of the year.

Kronos also posted a net loss of $41.1m for the first quarter of 2013 because of lower pigment prices and higher raw materials costs.

Kronos’ CEO Steven Watson said the company’s inventory is shrinking, that supply of some grades of TiO2 has begun to tighten and that delivery lead times are increasing. These are all signs that the market is improving, he said.

North American contract values are in a range of $1.55-1.70/lb, as assessed by ICIS.

Other North American TiO2 producers include DuPont and Huntsman.

($1 = €0.76)

By: Larry Terry
1 713 525 2653

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